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Ocelot - your comment for a start requires the company to be making a profit "If you're planning to make taxable profits, then it is better to start with tax losses to offset against those profits than to suffer the full impact of the total tax rate of 40% on those profits."
And the Saltfleetby CPR / Annual Accounts 2018-2019 show that Angus won't be making a profit at Saltfleetby even with an average of 40pence/therm....and this is before Corvid / Gas price crash hit.
Angus fail the stress test and that is even without the Holmwood £1 million commitment to pay for a well.
Just the costs of getting to First Gas, salaries places an immense strain on the companies cash reserve.
Angus have predicted it will cost £2.79million to get to first gas, so deducting the £2.5 million leaves them £290,000 short.
Angus annual wage bill £1 million and rising.
A sidetrack is planned Q1, 2021 and it is costed at £2.36million (which is a perfect well and no issues encountered).
Angus share of the costs (51%) = £1.2million
As well as having to pay for all the Balcombe applications after screwing up the permit they already had in place.
Angus are also liable for all the EWT costs for Balcombe and pay for the FDP.
Being generous and saying 40pence/therm minus 2.5pence = 37.5pence.
Over 10 years that is circa £37.5 million.
Subtract £2 million for decommissioning = £35.5 million.
Angus share = £18.1 million over 10 years.
1 year equates to £1.81 million
Subtract £0.97million
Subtract £1million
Leaves you owing £160,000 a year.
And that doesn't even include the £1.29 million for the sidetrack or the £290,000 missing to get to first oil........
And that is with 40 pence/therm
The cookie pot is well and truly empty.....
And thats before the missing £1 million for Holmwood.
Angus will have to start taking any profit (from whichever year that is) at the start of the project ....ring fenced (just as they did at Lidsey and Brockham).
Angus raised £2million for Holmwood and £5 million for Balcombe.....and its all gone without actually doing the projects. At some point tomorrow has to come and you can't keep putting off your commitments....which means more share dilution.
1/ Without tax: 100
2/ With tax: 60
1/ is 1.67x higher than 2/
If you're planning to make taxable profits, then it is better to start with tax losses to offset against those profits than to suffer the full impact of the total tax rate of 40% on those profits.
gkb47,
I'm sure the BoD is fully aware of Angus's exciting prospects, given that they are the ones responsible for them.
As for the employment of their own cash, that is their personal affair.
gkb47,
There is no need to be sarcastic - it takes considerable skill to create valuable tax assets.
The effect is to multiply the "front-loading" of the project, generating significant cash which ANGS will then need to employ elsewhere.
If you look at the mid-case forecasts on p52 of the Saltfleetby CPR, you can see that revenues are forecast to be completely tax free in 2021 (£2.1m), 2022 (£6.6m) and 2023 (£7.2m).
The losses remain losses until they can be offset against taxable profits, so it's a question of identifying AIM companies with tax losses which are likely to be generating taxable profits in the future ...
Step forward ANGS.
But the company needs to deliver projects in a timely manner. balcombe application late. gas off take agreement late. Brockham still awaiting clearance from EA. Not everything is down to covid19 . any way these are minor delays and must be addressed immediately and unconditionally. I want the SP at 2P now.
AEWB No.3 Limited's tax losses are , therefore, the part of the CPR which exist already.
£15.64m at 40% = £6.256m = 1.07p per share.
Re tax losses:
at 30/09/19, in total £18.533m which are indefinitely available (see note 9 of the 18/19 accounts) and of which:
£15.64m are located within AEWB No.3 Limited and form part of the Saltfleetby CPR's post-tax future net revenue forecasts (see the CPR's p47 and the forecasts - the mid-case forecast is on pp52, 53)
Reminder: because of ANGS's high total tax rate of 40% (p47 of the CPR), these tax losses are particularly valuable to Angus.
they have 18 million that they can claim against over quit a few years on all their profits,so they will pay no tax for years.