GreenRoc Accelerates their World Class Project to Production as Early as 2028. Watch the full video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
I hope I am doing this corretly.
From Oct26th CPR the assets of the SGF gas fieldwas assets were reported s follows:
P90 sum of future cashflows to Angus of £31.7 million
P50, sum of future cashflows to Angus of £55.9 million
But these data were based on gas price of 64p/therm. On last Friday the gas price passed 220p/therm. So the above numbers becomes as follows:
P90 31.7x220/64= £108.9
P50 55.9x220/64= £192.15
You add AAOG tax allowance of £42m and Angus £17m. Also Lidsey and Brokham value t be added.
The final share price will depend the final nmber shares in ciculation.
petroleum1: the CPR assumes the beginning of production in March. However, Angus are way behind the CPR schedule and way above the CPR budget. Lots of pieces of kit have still not been delivered to the site. Angus needs more cash too. The wells haven't been tested, there’s a sidetrack to be drilled once the gas has been flowing at a reliable rate. .
Any gas they can produce before July can be sold to Shell at close to the market price. After 1 July, the hedge sale prices are in the 40s. The hedges commit Angus to selling fixed volumes at these prices for three years. You have to decide whether they’ll produce enough gas by May to meet the £4.4mm+ that they have to pay the Debenture holders in May (probably, we don’t know the payment date) and whether by July they’ll be able to meet the hedge requirements. If they don’t do either of these things, the Debenture holders can take over Angus’s assets. The potential losses on the hedges if current gas prices stay near or above current levels are very large.
If you think Angus will get the asset into production by April and that production thereafter will meet the hedge requirements, Angus will be an excellent investment. They may have to raise quite a lot more money if they’re to have a chance of doing so, but they're a long way behind schedule and, as I’ve said, some of the kit they ordered last summer is not yet there. It’s not clear that the Sound Energy proposals bring anything to the table in respect of meeting bills as they fall due - or in any other way. There’s a lot of scepticism among more knowledgeable and long term observers of Angus and its management as to their ability to get them over the line.
It boils down to the same thing - Angus and Saltfleetby are different entities. There’s value in the gas. There may not be value in Angus. Saltfleetby may belong to the Lenders in the summer.
Thankyou Oofyprosser for your valuable summaries highlighting the funding risks for ANGS over the next 6 months. They can get production going at Saltfleetby by April if they have all the equipment and long-lead items in place. As you say, they havent. I think SOUND energy have noted their vulnerability and put in some low-ball punts, but they somehow have 1 in 7 shares sewn up (just under 14% pledged)
If you combine all these assets this will become Mid Cap company. All you need to do is to emove the hedge. There must be somebody who is able to that.
Zaphod: I can’t find this company on the Companies House website. Where can I find these data, please?
petroleum1: forward contracts are legally enforceable instruments and commit you to meeting their terms, though they’re normally settled in cash, not in the physical commodity. Angus’s gas is contracted for sale to Shell. They get cash from the latter. If Angus can’t sell enough gas to Shell to cover their financial obligations under the hedges, they’ll have to find money elsewhere. They can’t borrow more under the terms of the charge. The sums will be far too large for shareholders to finance every month. Yes, the Lenders, who are their counterparties in the hedges, might be willing to negotiate a price but it would be 36 months worth of the difference between gas at 40-something and the prevailing market price - did you say 212? x the volume of gas per month specified in the contracts. 50-70% of the expected volume of gas over 36 of its expected most productive 48 months at Saltfleetby is pre-sold at 40-something. It’s in the CPR, page 48 or 49, I think. The proposed bid by Sound Energy doesn’t seem to offer any advantages as far as these factors are concerned and I’ll be surprised if the bid goes through,
If they get the project working in time and gas flows as predicted, it will be a really good investment - and a first on both counts for this management, which has never got anywhere near meeting a single one of their forecasts.
Zaphod: I’ve found a link to it.
Unless someone can get out of the hedge in it’s present terms I can’t see anyone buying out Angus unless zenith take it (:-)
SOU market cap is £35m and they already made an unacceptable offer for ANGS. A hedge of £12
is not that much.
Petroleum1: what do you mean by a hedge of £12 is not that much?
Irishmouse: if you were on the right side of binding contracts which look like making you millions, would you accept much less than the present value of the contracts to settle them early? I wouldn’t.
Oofy no I wouldn’t, that’s my point.
OofyProsser
Sound Energy, a small player, surely must know all those problems you have highlighted and yet they made an accepted offer. I beleive the management when they say there are four more bidders to come. Angus said they can come out of the hedge anytime and who ever buy the company can provide (loan) the hedge value of £12m.
At this stage anything one say will speculation and I will stop posting until the picture become much clearer.
Irishmouse: yes, and it’s well taken!
Petroleum1: I think the Angus statement referred to six bids, not six bidders. They’ve now had four from Sound Energy, that leaves two more. What do you think - Forum and SEL? If so, they can’t afford it either. And they know the situation Angus is in. The Sound bid has not been accepted, it’s gone into the pot along with whatever other indications of interest they’ve had from the remaining two parties.
The hedges are not valued at £12mm. The loan is for £12mm. There’s no relationship between the two, other than that the inability of Angus to meet the terms of the hedges may result in the Lenders taking over Angus’s assets. The hedges are open-ended. Angus has contracted to sell all the oil it produces to Shell. It has also taken on forward sales contracts, on a monthly basis for 36 months at fixed prices. If the market price of gas on the monthly settlement date is higher than the price they’ve paid for it, Angus will have sold forward for 43 (or whatever the monthly price is) and, being unable to deliver gas, will have to buy it in the market at whatever price then prevails. The gas price a lot higher now, and looks like staying higher for a fair while. It’s OK if they’re producing gas in quantities sufficient to meet the forward sales contracts. They just use the cash that Shell pays them every month to buy the gas at a similar price in the market. So they’ll get the hedged price for it. If they produce more than they’ve hedged, they’re fine, they’ll sell the excess at market prices and make lots of money. The issue is, if they can’t produce enough gas to cover the amount contracted for in the hedges, they’ll have to buy the shortfall at market prices for it, and subtract the 43 from that for their net payment. This could amount to a huge amount of money every month and it starts on 1 July. They’re not allowed to borrow more money, unless they’ve paid off the £12mm. loan and the interest for one year at 12%. There’s no chance of this, unless a bidder with deep pockets pays it off. So if this rich bidder paid Angus shareholders out at the current share price, that’s £13mm-odd, plus £13.4mm. for the loan and interest, and they’re still left with the risk on the hedges. And the thing isn’t finished, it’s late, over budget and untested. And the sidetrack, predicted in the CPR to be drilled in January, has been put off until some weeks after they’ve got gas flowing. The CPR predicted that the two existing wells would flow at 5mmcfd. The author of it expected a sidetrack to meet the small deficit from September/October in the amount they’ll produce from the two existing wells vs. the volumes contracted in the hedges. And they’re still missing a vital part of the sidetrack drilling rig. The time it will take to drill and achieve production is anyone’s guess and all previous attempts at a sidetrack from that well have failed. And the OGA may not approve a takeover anyway.Pump and dump, anyone?
Sounds like Angus are in a pickle of their own making regarding the hedges. Operational overruns are pretty common, especially when project management isn't a core competency in a company like Angus.
Glad you found the link to THE ORWELL GROUP LTD documents, under filing history.
https://find-and-update.company-information.service.gov.uk/company/11588582
He’s a bit like the Scarlet Pimpernel is our Paul Forrest.
As an accountant, the Grey Pimpernel may be more appropriate.
Zaphod: I found two or three defunct companies with very similar names, but this one didn’t come up at all until someone posted a link to it. It’s miniscule in any case. Still, Tidswell, Carlos Fernandes and your man Forrest, all at the same registered office as Lucan Fashion. Forrest was in an adjacent office to the other three three years ago, in Chiswick, when the Wingas/SEL/Angus/Saltfleetby deals took place. All very odd. None of them is exactly Warren Buffet though.
correction.......
In my previous post I reported Angus share of 51% only under the thread headingTotal Assets for the saltfleetby gas reservoir:
The Angus share of 51%:
P90 = £108.9m
P50 = £192.15m
While the SEMshare of 49% is:
P90=£104.6m
P50=£184.6m
Therefore to correct the number for the whole field you add Angus share of 51% to SEM share of 49%.
The total assets for the field will be:
P90= £213.5m
P50=£376.75
You also add AAOG tax allowance of £42m and Angus £17m. Also Lidsey and Brokham value to be added.
If this not Mid Cap enterprise, what is?
Any one is welcome to sheck the figures above.
I will still not post anymore until the picture become more clear.
The title of the thread is total assets, therefore I will include SEM share of 49%
Petroleum1: these figures appear to be well in excess of those in the CPR. Have you removed the hedges?
OofyProsser
Original CPR numbers were based on gas price of 64p/therm at the time. The CPR numbers I calculated are based on existing gas price of 220p/therm.
OofyProsser
With the existing CPR values based on gas price of 220p/therm, raising finance to remove the hedge should not be a problem.
Yes, but the new CPR updated them on 1 October. On p. 50. Not as high as 220, but to assume that gas prices will remain at 220 over the whole life of the project is naive. Probably! It’s certainly not in line with the futures market prices, which the CPR uses as its benchmark.
Re Mr. Forrest’s sale: he knows more about what’s going on than anyone except the Angus Directors, and, since he owns a large no. of shares in Orwell Group, which shares its registered office address with Lucan Fashion and is co-owned by Carlos Fernandes ( the Angus FD), and Jonathan Tidswell, I think it’s safe to say he probably knows roughly what’s going on too.
Petroleum1: removing the hedges would require a cash payment up-front of the present value of 36 monthly contracts. Many, many millions at these prices. As has been observed elsewhere, Angus struggled to get a small, under-subscribed placing away last month and the Debenture terms preclude further borrowings. Where would Angus get the money to get out of their forward contracts?
Natural gas price trend is upward since original CPR was made.
https://tradingeconomics.com/commodity/uk-natural-gas