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Tthe Net Present Value (NPV) for Saltfleetby reservoir(ANGS+SEM), based on gas price of £2.24/therm,was calculated to be £250m.
A discount factor was used in the original CPR on each year of future production ( about 10%) to arrive at the above NPV. Therefore the future cash flow is a lot highrt than above NPV of £250m. So Paul Forest must think it was worth hiding AAOG for its tax losses of £42m in spite of the fact that ANGS and SEM have £22m and £27m of tax losses respectively.
AAOG tax losses of £42m could have been reversed in any entity that generate cash flow.
Yes, Petroleum1, I agree that this is a very valid explanation of the latest dilutive efforts on the part of the Anguish Board. It’s also possible that the £3mm. placing with Aleph has cost the latter nothing. The volume of shares traded this week has been massive. It seems likely that either or both of Forum and Aleph have pre-sold all or part of their new shares. It’s also possible, if Anguish can’t assure Aleph by the date of the EGM that Saltfleetby will be ready to pipe gas for sale to Shell by July, and/or that they don’t know when the overdue permission from the EA will arrive, and/or that they won’t be allowed to drill a sidetrack while gas is flowing in the surrounding pipes (with gas engine generators operating and a flare with a permanent pilot light just yards away), that Aleph will not take up the next £3mm. of Anguish shares. In which case, the initial £3mm. may not last long. There’s an IQ answerable by 31 May on the sidetrack which is absolutely to the point. In the absence of other news, that’s the thing to look out for. If they dodge the question altogether, or choose to answer instead just the other question re the sidetrack, I think it will mean the situation doesn’t look very promising.
Also the deliverability of the two wells for the following 3 years might be impaired (for some reason) and fail to meet hedge requirement thereby loosing the whole the field. Drilling a sidetrack will hedge against that as it is life and death situation. This is mere speculation.
IMO..... The existing two gas wells belong to Mercuria for the following 3 years. Lugan wants to
drill a horizontal well, expensive and twice as productive as a vertical well, for the new combined
entity ANGS+SEL and hence the massive share dilution. He could not risk waiting for the field revenues to enable him to do this.
Oofy I am tired of watching this space because nothing seems to be happening.
George Lucan has just given a talk to Zak Mir, in which I think I heard him say that Angus has £22mm of tax losses, SEL, which they’re taking over, has £27mm. of tax losses. There doesn’t seem to be an immediate need for AAOG’s tax losses, does there?
This deal looks like a sweet one for Paul Forrest. And Angus are raising £3mm in a placing with Aleph at just under 1.1p to enable them to meet their further substantial cash shortfall in completing the Poundland project. Plus a possible further £3mm. in order to meet the loan charge requirements re cash levels. Lucan is now projecting first gas on about 15 June, the date of the EGM to approve the proposed increase in the number of authorised shares, required for the second tranche of £3mm. worth of shares to be issued to Aleph. So this second tranche may go ahead, or, if the start date at Poundland is deferred again, it may be cancelled.
There’s a lot of large share deals going through the market currently, including one of 91mm. last evening (the number being given immediately to Forum), another of 82mm. and two or three of 5mm. each last evening, plus another of 10mm this morning, all apparently at the Aleph purchase price. Make of that what you will. There’s only one other existing shareholder with a holding of this size.
Frazer Lang got out recently at the 1.3-1.4p level then prevailing. He had 12%. Make of that what you will. Watch this space.
ANGS could spin off Saltfleetby and RTO into AAOG.
If Paul Forrest lands on the ANGS board that would not surprise me.
But as oofyprof has said, there is a risky amount of debt, although the incoming ivestors to ANGS, Aleph, include some folks who lent alongside Mercuria. Would have to do more digging. But who knows what is in the mind of Gazprom? Sorry, I mean Paul Forrest :-)
I posted on 12th Apr 2022 (Post no 146 ) the following:
“I re-calculated the Net Present Value (NPV) for Saltfleetby reservoir, based on gas price of £2.24/therm, to be £250m. That will make the interest of ANGS and AAOG to be £127.5m and £122.5m respctively. To me it seems that the AAOG £42m tax allowance can only be used efficiently if applied on both ANGS and AAOG"
With gas price now below £2/therm the above conclusion is more valid.
Think it's sll speculation but I don't think a company with these Tax writes offs (shell company) will go unnoticed for long.
Dutch
Back into hibernation again.
Then all that is left is to remain optimistic that all our AAOG tax write offs do not go to waste.
Hi Z .
They are under no obligation at all to inform us of anything as we are no longer listed.
Hi im
Paul is a director, but has appointed at least two of the other directors, from memory, one of whom had a mining background I seem to recall.
Would we not expect to hear something from Sarah Cope if not Paul Forrest stating what has happened to the option of the SEL buyout and the path forward. We should if they took their director responsibilities to their shareholders seriously.
Paul Forrest does not have control of AAOG he is just a director as far as we know, I wonder if he will now resign or stay on and take us to pastures new.
So pleased you enjoyed the previous post…. Was fun wasn’t it (:-)
My personal suspicion is that Paul Forrest may have found some sanctions-stranded Russian oil/gas or mining assets to reverse AAOG into. There must be quite a choice at the moment.
Just to remind everyone of what an operator Forrest is, here is Skittishs brilliant summary from February this year.
RE: Paul Forrest05 Feb 2022 16:24
I know that some on here do not seem to rate Paul Forrest much in terms of financial acumen, and he does seem to present as as something of a provincial accountant of likely modest means, however it appears to me that he may have hidden talents.
For example, on 17-6-2019 he acquired the stranded Saltfleetby Gas Field via ownership of Saltfleetby Energy Limited (SEL) from Gazprom. We have never been told how much he paid (bearing in mind his limited means), but I'd hazard it was £1.00.
Whatever he paid, SEL was the recipient of not only the gas field but also £14M in cash inherited from Gazprom as "decommissioning costs", as at that time it was apparently intended the field would never be brought back into operation; and also £61M in tax losses.
On 19-6-2019 SEL sells, for £1.00, 51% of the gas field to ANGS, paying them £2.5M in decommissioning costs for the liability they were now taking on - in the short space of 48 hours the field is now viable once more.
ANGS is co-opted to resurrect the Saltfleetby field, tapping its own shareholders as required.
So over the space of two days (17-9-2019 to 19-9-2019) Mr Forrest turns a £9M profit, via the suddenly reduced decommissioning costs - and later ANGS says that even the £2.5M was too high! And SEL's 49% share of such decommissioning costs is now shown as £700K in their accounts.
Not only that, but SEL's latest accounts (1-1-2019 to 31-5-2020) show that it made £12M profit - we don't have access to the P&L, just the balance sheet showing accumulated losses falling from £61M to £49M - probably by shifting the worthless "abandoned assets" into the valuable "soon to be producing assets" column.
He then uses some of the £14M given on the sale by Gazprom to buy up 25% of AAOG for £500K and acquire effective control of a company which has a further £42M of accumulated losses against with future profits can be written off. Not satisfied with that, SEL grants AAOG an option for a mere £8M in shares to buy 25% of the previously worthless Saltfleetby. Last week he was sufficiently influential to be appointed a director of AAOG.
So, in the space of 3 years Mr Forrest, with no visible major means of support,
acquires a stranded gas field,
achieves control of SEL and AAOG, is appointed a director to both
co-opts ANGS into resurrecting Saltfleetby,
"pockets" (not personally) £9M+ from Gazprom which is then used to pay for SEL's share of the resurrection,
grants AAOG an £8M option to acquire 25% of the previously worthless Saltflletby
makes a £12M profit in the SEL accounts,
and acquires effective control of company losses to be set against otherwise taxable pro
Dear irishmouse
Am back on the board after a few months after seeing the Angus RNS today. 2 years ago or so Sarah Cope had arranged the option for AAOG to take half of SELs 49% of Saltfleetby Field, for £8m in shares and £1m cash. Now that is out the window.
Paul Forrest controls AAOG, Forum Energy and SEL.
Today's Angus RNS says he is likely to take a board seat at Angus:
"Under the terms of the SPA, Forum will also have the right to appoint one director to the Board of Angus Energy which, subject to regulatory checks by the Company's Nominated Adviser, is expected to be Paul Forrest, the beneficial owner of Forum. "
The total consideration for the buyout of SEL is £14 million.
If my memory serves me right, isnt £14m what Gazprom gave Forum Energy (aka Paul Forrest) to pay for decommisioning costs etc when they sold Saltfleetby in 2019? Seems a bit of a coincidental number.
@Skittish needs to do an updated summary of Paul Forrest and his manouverings.
Regards
Z
PS I enjoyed your April news on ATOGs tribulations in Tunisia.
Acquisition of remaining 49% interest in the Saltfleetby Project
Subscription of £3,000,000
Conditional Subscription of up to a further £3,000,000
Angus Energy Plc (AIM:ANGS) is pleased to announce that it has executed a share purchase agreement ("SPA") to acquire the entire issued share capital of the Company's current joint venture partner in the Saltfleetby Project (the "Project"), Saltfleetby Energy Limited, ("SEL" or the "Target") which owns a 49% working interest in the Project (the "Acquisition") thereby giving Angus Energy a 100% interest in the Project. To fund the Acquisition and other working capital requirements, the Company has concurrently arranged a direct subscription with affiliates of Aleph International Holdings (UK) Limited ("Aleph") pursuant to which Aleph has subscribed for a total of 546,000,000 Ordinary Shares in the Company at a price of 1.09896011 pence, being £6,000,000 (Direct Subscription) split into an initial unconditional tranche of £3,000,000 and a second tranche of £3,000,000 conditional on Shareholder approval.
Summary of the Acquisition
The Company has executed a share purchase agreement to acquire the entire issued share capital of the Target from Forum Energy Services Limited ("Forum" or the "Seller"). The total effective consideration payable pursuant to the SPA is the sum of £14,052,000, which comprises:
· £250,000 to be paid in cash at Completion;
· the issue of 91 million Ordinary Shares at 1.09896011 pence per share (the "Funding Price") at Completion (the "Initial Consideration Shares");
· the issue and allotment of the 546,000,000 Ordinary Shares at a price of 1.2 pence per Ordinary Share (the ("Acquisition Price") at Completion (the "Additional Consideration Shares") which are subject to lock-up provisions detailed below; and
· up to £6,250,000 deferred consideration to be paid in instalments from net cash payments to Angus Energy from the Project through to 31 March 2025 (and subject to an upward or downward net cash adjustment) as and when those payments would have been available to SEL under the Company's Senior Debt Facility of May 2021.
Following completion of the Acquisition, the Group would own a 100% working interest in, and would continue to be operator of, the Saltfleetby Licence.
As a result of the issue of the Initial Consideration Shares and Additional Consideration Shares and following the issue of the Initial Subscription Shares detailed below, Forum, will hold 637,000,000 Ordinary Shares in Angus representing approximately 28% of the Enlarged Issued Share Capital and just under 25% of the Enlarged Issued Share Capital following the issue of the Secondary Subscription Shares below.
Under the terms of the SPA, Forum will also have the right to appoint one director to the Board of Angus Energy which, subject to regulatory checks by the Company's Nominated Adviser, is expected to be Paul Forrest, the beneficial owner of Forum.
Paul Forrest own’s SEL and is finance director at AAOG, he obviously could see no future for us there. We all want to see AAOG trading again so we will have to sit on the side line a tad longer for something better to come along.
Any chance of AAOG buying 25% of SEL have now gone as Angus have just announced that they intend to buy SEL’s 49%. I hope AAOG are exploring other avenues.
So where does selling of 49 percent to Angus leave AAOG
https://www.angusenergy.co.uk/wp-content/uploads/2021/10/Angus-Energy-Saltfleetby-Reserves-Valuation-Report.pdf
This CPR Dated 22nd Oct 2021 was posted yesterday by oselot on Angus bulletin board..
In page 7 they are talking about the sidetrack to be horizontal. This will increase the chances of success for the well to be a producer even if poor reservoir quality is encountered due to hetrogeniety .
Also they are mentioning “Condensate banking may increase the skin (excess pressure drop) of the wells, reducing the gas productivity index …”
and hence the sidetrack.
I really cannot see how they will fail given that they have 17 years of production history in SFB.
I am trying to determine whether I should bail out after getting my money back or stay on for the long run.
Does anyone know if SEM only own 49% of SFB or share in the ownership of other assets with Angus.
What is happennig here ...anyone really know what's going on ??
Dutch
I still have not received a reply from SEL but didn’t really expect one.
If we are to complete the agreement with SEL I would expect it to be announced very soon after Angus produce first gas which is expected during May. So a bit more waiting with fingers crossed.
I bought into AAOG at 10p. I averaged down to 3p while going down before going bust. Now I am waiting to get my money back.
Also I bought into RMP(Red emperor) which went bust after drilling a dry hole in Greenland. It re-emerged again as FME. So far I am got back 1/3rd of my investment. I made a mistake by not averaging down .
I am watching the following AIM listed companies in case any of them fall in the above category.
UJO,JOG,MATD,88E,AMOI,ARG,AST,CCZ, EOG,I3E,IGAS,MSMN,PTAL,RBD,SDX, ZEN , RKH,RBD,NTOG,EOG,EME, CLON, AEX …etc
Averaging down will not work in the following cases:
-ANGS it is under loan and hedging obligations.
- COPLis also under loan obligatios
- PCI who was taken out by a major investor through a court case.
-Tuskar went bust as they did not have legal ownership of the field they worked on and their Nigerian partner pulled the mat from underneath their feet.
The answer to headline question Is:
Averaging down before going bust is a good trading pracise but also depends on circumstances of each individual case. Sharing detailed information about each case is vital.