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Where did you get this? Maybe a good sign that we are still alive
cloves: that’s interesting, I’ll have a look at those when I have some time, though I had a cursory glance at Egdon and UJO reasonably recently and wasn’t very impressed. . Igas has had a lot of planning applications in with LCC, I think, re work at its own sites. You’re right, I agree, there’s at least six indications of interest. Sound has to announce its intentions by 15 February.
cloves: a few million won’t do it. It’s too risky. It could all be gone within five months.
These are just my views, based on a reading of all the published data I can find. It’s possible I’ve missed or misinterpreted something and there may be something going on behind the scenes between related parties. I can’t see any sign of such a thing yet, though.
cloves: I don’t cover the whole sector but don’t know any small oil/gas companies with cash/borrowing capability of £20mm+ and an appetite for short term risk. If there are any like this, would you let me know? I’d like to take a look at them.
cloves: I’m a sceptic, my comments need to be judged with this in mind. I may be completely wrong, but the loan repayment and interest due in June are onerous and the hedges starting in July are potentially ruinous, unless the gas flow is sufficient to meet them. The big returns in Saltfleetby for up to three years are likely to be made by the people who are on the other side of the hedge contracts. People conflate Saltfleetby with Angus all the time. They’re not the same thing. Saltfleetby has been transformed by the soaring gas price. Angus may or may not own it this summer if they can’t meet the debt requirements or if the gas fails to flow enough to meet the hedged volume. A bid by any number of small companies without substantial cash resources won’t help Anguish. A big company will understand the risk in the hedges and factor this into their calculations. There’s no way of knowing whether the project will come in in time or with enough gas. And there’s little a better-resourced company can do at this late stage to finish the project more quickly - it’s the delivery of vital pieces of kit that is the cause of the latest forecast delays.
A placing adds some cash but increases the number of shares. Anyone serious about a bid and with the resources to mount one will prioritise getting the project working ASAP, so I shouldn’t think a placing would be a big issue if the money raised is to be spent on this.
I don’t think many small companies have the cash required to make a successful bid and if they did and it were recommended, the future of the combined entity would be as doubtful as the future of Angus on its own. A bid by a well-resourced company, whether friendly or hostile, would be the best outcome. I suspect that, if such a bid comes, it might be from someone who thinks Saltfleetby’s ultimate storage capacity is worth taking on the financial burden. I’ve no idea whether such a company exists. None of AAOG, SEL, Forum or Sound seems to have the resources to mount a serious bid.
Cloves: I’m sorry, I misinterpreted your post., I think. Yes, the shareholders voted in favour of a massive rise in the authorised share capital at the EGM last month. Odd timing, in that the normal date for the AGM is late March and an increase in authorised shares is normally a housekeeping agenda item. So there’s some expectation of a share issue before late March, otherwise why have an EGM in January to approve the increase?
cloves: I don’t understand your point. Shareholders nearly always approve these placings. They raised a gross £750,000 - before expenses. If this is a pointer to future investor appetite for Angus paper, they’re not going to be able to raise enough money without a very sharp rise in the share price.
petroleum1: it’s not a hedge fund that’s lent them the money. It’s an international, privately-owned commodity trading firm, and another, small, commodity firm investing clients’ money (apparently). The former has organised the hedges on the gas produced from Saltfleetby for the first three years. They’re getting an interest rate of 12% over LIBOR (SONIA). Plus shares. Plus a royalty of 8% of revenue over the life of the asset once the loan is repaid. There is a charge on the loan which gives them the right to take over Angus’s assets in the event of a default by Angus on its loan interest and annual (presumably, we haven’t been told the repayment schedule, just that it’s an amortising loan) repayments over the next three years. £4.5mm in total this summer, it’s believed.
Sound is in a not much better position. Over-borrowed. They’re offering shares, not cash and they’ve gone up from 1.3p to the bid valuation of 2.2p in the past eight weeks. They’re at 1.96 now, which values the bid at about 1.33p. Both companies need cash. The bid does nothing for either company in this respect. Angus’s report and accounts is due within five weeks. They must have very little cash left. Their going concern status may be highlighted in the report. If the Sound bid is withdrawn or its share price falls significantly, one can expect a commensurate fall in Angus shares. Sound’s is the only bid at the moment.
As for the Saltfleetby asset, there’s some dispute as to the reduced rate of production in the last year or so of production. It may have been due to problems at the Theddlethorpe refinery, it’s true. But the previous owner didn’t fancy building the plant that Angus is building to replace the gas refining facilities that existed at Theddlethorpe. Lord Lucan said at the time that this was because it would cost them £15mm, while Angus could do it for £2.5mm. In the event, Angus is spending more than £15mm in total, and it’s two years late. The economics of the asset have been transformed by the unforeseen huge rise in gas prices. However, with the loan repayments due in June and the hedges to meet in July, it’s quite unclear whether Angus will still own it by then. At the least, if Angus can’t meet either requirement and have to ask for a renegotiation of the loan terms, the Lenders will be able to nail Angus down to much worse terms than in the existing loan.
The project is very late and substantially above each successive budget. Angus needs cash. The December placing, which raised less than £700,000 net, was under-subscribed. They’re not allowed further borrowings or a rights issue, or to sell assets, without the approval of the Lenders. A few days in the data room should reveal all this to potential bidders. There’s no business rationale for the Sound bid. Yes, it looks a bit like a pump and dump.
Irish
Good post . It does not look like we will be loosing our investment in AAOG. What I would like to know is whether I should keep my investment running or sell and get my money back. For this reason I would like to know why they need compressor on wellsite. They do not mention wellhead pressure exept that it had built up slightly over the shutdown period.
Paul Forrest joined the board of directors of AAOG , announced after hours this evening.
FORREST, Paul
Correspondence address
27/28, Eastcastle Street, London, W1W 8DH
Role ACTIVE
Director
Date of birth
September 1969
Appointed on
1 February 2022
Nationality
British
Country of residence
England
Occupation
Finance Director
OofyProsser
I disagree it is pump and dump. The hedge fund would not have given them £12m to spend. Also SOU would not have made an offer of 1.4p. Besides Saltfleetby reservoir was flowing for years prior to forced shutdown due to downstream reasons and not upstream causes.
petroleum1: and they need a successful sidetrack by the end of September, or they won’t be able to meet the quantum required in the hedges. That’s assuming that the two existing wells produce in time and to target levels by the end of June and that the HSE allows a sidetrack to be drilled on a site where gas is flowing.
Yes, your final sentence may be correct. Or they may be trying to twist the arm of the Lenders, who may be anxious that the hedge terms be met. Or it could be a pump and dump.
What is the actual worth of Angus share price?
CPR values on 26th Oct when gas price was 64p/therm was:
NPV P90 = £31.7m
NPV P50 = £55.4m
But the gas price has risen since then. If we take a gas price of 220 p/therm now the above NAV's
for Angus become as follows:
NPV P90 = £108.9m
NPV P50 = £192.15m
So as Angus total shares in issue is 1093m, the value of the share price for the above two cases becomes:
Share price for NPV P90 = 108.9mx100/1093m=9.96p
Share price for NPV P50 = 192.15mx100/1093m=17.58p
So SOU offer of 1.4p per share is not good.
As mentioned before the hedge fund may take over the field if Angus fails to deliver. So may be putting Angus for sale is a safe guards aganst this .
Sorry loft (ha ha) should read Oofy
Loft, I don’t think for one minute that SEL are looking to take over Angus, Paul Forrest has neither the cash or expertise to do that. If someone else buy out Angus it could put SEL in a very strong position and then we could be part of it. I could be totally wrong, let’s wait and see.
irishmouse: as I understand it, the only bid Angus have received is from Sound Energy. The others are expressions of interest. Sound and the four or five others now all have equal access to Angus’s data room. I don’t understand your comments on Mr. Forrest, his (SEL’s) 49% stage in Saltfleetby and AAOG. For all we know, Mr. Forrest could be one of the bidders, couldn’t he? And the “bid” from Sound is for Angus as I understand it, not for 100% of the Saltfleetby gas field. It’s a very odd situation altogether. Why would the Board of Angus put the company up for sale when they’re pointing to far higher (multiples, in fact) asset values than the current share price and are still predicting they’ll get the project producing gas in time to meet their financial commitments in the spring/summer? If they’re correct, why not reject all the “bids” and start raking in the cash from May, when they should have the plant finished and approved?
Meanwhile, the price of Sound shares went on a nice uptick from just before they started contacting Angus with their expressions of interest. And Angus has gone from 0.65p to Friday’s 0.98p on the news of the “bid”. Though Sound’s “bid” is all in shares at 2.20p and they are down from this level by 12% or so since the announcement of the “bid”.
I fear that, as a famous American lady once observed “there’s less to this than meets the eye”.
Angus have apparently five active bidders and only declared Sound Energy as one of them, the others for some reason remain anonymous. If they do sell their 49% stake it would make sense for Paul forest to transfer into AAOG which would require raising £8million in shares and £1 million in cash. Our shares would start trading again and hopefully we could have part of an asset worth having.
Looking into this further the more confusing it becomes, in some situations the tax relief is one year and in others it is indefinitely hence I can’t answer your question with any accuracy.
Can anyone else help ?
PJOHN.
As I am no tax expert I will except any qualified criticism but it looks like we can carry over our tax losses within the same business sector for 3 years.
Companies that cease to trade additionally have access to Terminal Loss relief (section 39 CTA10) which allows unlimited carry back of trading losses of the final accounting period to set off against profits of the previous 3 years (provided that the company was carrying on the trade in the accounting period or period(s) which fall in that 3-year period). Where an accounting period straddles the 3-year period, the profit is apportioned and loss can only be set off against profit falling within the 3-year period.
How long do we have to for someone to take advantage of our tax losses? How many years can you go back? Thanks guys
Firstly just wanted to say how sorry I was to hear of the death of Meatloaf, he was part of my youth and even to this day his music can boost you up even on the most depressing day , may he Rest In Peace.
Back to the subject.
My wish list would be a large player with cash and the technical ability buy out Angus and Forum and AAOG join up,realist and start trading.
If a company like Sound Energy take over Angus I would be happy to remain a shell until something better comes along. Just my thoughts.
You never know! Though Wingas may have sold Saltfleetby in the first place on consideration,of the Interets of the Russian State. I’m sure President Putin would prefer Europe to take peak gas from his new pipeline rather than from massive storage facilities under Lincolnshire.
Oofy, maybe some Russian roubles will come in to refinance the loan and give the time needed.
Irishmouse: I should think that with 49% of the Saltfleetby gas field, he probably thinks he’s got enough and needs to de-risk/diversify his investments a bit. Presumably he bought these shares in the first place with part of the money left to him by Wingas for a pipeline decommissioning reserve. I doubt there’s anything more sinister than that, though his timing may be influenced by certain short term considerations after a big rise in the Angus share price (as there was a month earlier in the Sound Energy price). I agree that as it stands the Sound Energy bid is a non-starter - if it was ever a starter. It’s already worth nowhere near 1.5p in any case at the current Sound share price. And think what would happen in the event of a successful bid to a combined Sound/Angus share price with nearly 40% of the shares in the hands of fed-up ex-Angus shareholders.
I don’t think Mr. Forrest would have an interest in beating down the Angus share price. As for goose and golden egg, there’s a chance they may make it across the line in time to gas production, and at the necessary scale, but there’s some pretty high hurdles to clear before June. I think you need to have a pretty high risk tolerance to invest in Angus. It’s more like a roulette chip than a stock market investment. Who knows, though?
SEL is in the same boat as Angus: the gas plant needs to be operating at forecast output levels by July or the ownership of their assets may change hands. And Angus are short of the money they need to finish it. It’s been suggested on another chat site that the most likely resolution to the requirements of all the parties in the £12mm. loan may be the provision of some more short-term finance by the Lenders to tide Angus over to full-scale production - though at a price.