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It’s undoubtedly true that the gas market remains on a knife edge, but prices usually tend to recover this time of year having reached a year low at the beginning of June. Moreover, gas prices were already high for the winter. This spike is affecting next month’s prices and brings with it an almost immediate cash boost.
The current gas price isn't significant, it's the fact that a transient issue has caused a spike suggesting the market is still very much on a knife edge.
Thanks for that info ocelot. However, I would think that this is only going to be a short blip in the gas price as these Norwegian outages will be sorted out soon enough and will not have a long-term impact. After seeing your post I think that this will just be a short-term spike and should not make any difference to the long-term gas price, so i don't think that we should assume that gas prices are going up.
I would rather they kept the geothermal on the boil too as long as it does not cost too much money. The world is constantly looking for fossil fuel alternatives and there is going to be more and more money available for such projects as time goes by both from governments, especially if Labour get in, and private enterprise. Geothermal can easily be un in parallel to gas as you say.
European natural gas futures rose sharply on Tuesday after outages were extended at three major Norwegian gas plants and fields.
Month-ahead Dutch benchmark futures rose as much as 16.6%, reversing earlier declines with the facilities now set to remain offline until the middle of July. The outages will affect major facilities including Ormen Lange, Nyhamna and Aasta Hansteen, according to notices posted by network operator Gassco AS.
The moves signal that the market still remains sensitive to supply shocks, with traders balancing out sluggish industrial demand and high inventory levels as the region prepares for the upcoming winter. Prices have been volatile in the past week amid an array of competing factors, including plant outages and the onset of unusually hot weather in Europe and Asia, which could raise cooling needs and competition for fuel imports ...
https://www.bloomberg.com/news/articles/2023-06-13/europe-gas-jumps-12-as-outages-extended-three-key-norway-sites?srnd=premium-europe&sref=Em01M8Hr
When I was wobbling this morning and thinking of selling the gas price was down 5% or so. I’d be kicking myself if I’d sold and seen the price now - up 12.38% to 85p and as high as almost 90p (it was 54p last week).
As per my 13:39 post, report that the Norwegian shutdown has been extended:
"EUROPE GAS – Prices rebound after Norwegian outage extended
14:44
(Updates story after outage extended at Nyhamna gas processing plant)
LONDON, June 13 (Reuters) – Wholesale British and Dutch gas prices rebounded on Tuesday afternoon, after earlier losses, after an outage at Norway's Nyhamna gas processing plant was extended.
The Dutch benchmark front-month contract was 3.88 euros higher at 34.10 euros per megawatt hour (MWh) by 1338 GMT, while the day-ahead price rose by 4.20 euros to 33.50 euros/MWh.
The British July price rose by 9.30 euros to 85.80 euros/MWh.
A maintenance outage at Norway's Nyhamna gas processing plant has been extended by almost a month to mid-July due to problems with the plant's cooling system, operator Shell said.
Shell extended the outage to July 15 from 21 June, according to an update via the transparency pages of Norwegian gas infrastructure operator Gassco.
Nyhamna processes gas from the Ormen Lange and Aasta Hansteen fields, with the outage cutting 79.8 million cubic metres (mcm) of export capacity per day.
"This has upturned the market as prices were lower this morning," a gas trader said.
Norway is carrying out several maintenance outages at gas infrastructure assets, which does carry the risk of extensions, the trader added. NSEA/AM"
I’m not sure that the actual amount has been publicised, but quite a lot of money (they’ve been acquiring seismic, preparing reports, working with landowners etc)) and time has gone into geothermal. I hope therefore that it doesn’t simply get abandoned. Geothermal also requires the drilling skills that a company such as Angus possess. There might be some sense in spinning geothermal off (with some sort of contract for Angus to provide drilling assistance). President Energy, now Molecular Energy, has had some success in spinning off alternative energy companies.
That is a massive change in the futures market in one afternoon. Is there anything major that has occurred that could have caused this?
Thanks ocelot.
Last time the July future was at 88 ish was around 2nd May when Angus share price was around 1.6p. What else is so different that it shouldn't be that now or higher?
https://www.barchart.com/futures/quotes/NFN23/overview
Https://www.theice.com/products/910/UK-Natural-Gas-Futures/data?marketId=5419492
Wow! Thank you for your posts anyoneforcricket and RedbullRJ.
SillyButtons. Any company has to develop new income streams in order to get bigger. Especially one that works in oil and gas like Angus whose assets will gradually deplete over the years. A small-scale visit into geothermal would be a good thing IMO as a hedge against anti-O&G legislation, but I certainly wouldn't be the whole company on it. Remember that Lucan is no longer running the show though, Richard Herbert is in charge now and he has Canadian and Latin American experience on his cv so I would not be surprised if Angus were to abandon geothermal altogether and spread their wings abroad. Whatever they do though, they have to expand into new licenses or areas or the share price will only represent the Saltfleetby revenues which are good but not life-changing.
MULTIPLIER 66,964
FIXED PRICE £0.7597
MERCURIA PAYMENT TO ANGUS = £50,870
MULTIPLIER 66,964
SPOT PRICE £0.8126
ANGUS PAYMENT TO MERCURIA = £54,413
LOSS on SWAP is £3,543 (made up from a loss on swap 1 £25,215 and a profit on swap 2 £21,672)
-----------------------------------------------------------------------------------------------------------------------------------
DAILY PRODUCTION therms 92,393
SPOT PRICE per THERM £0.8126
GAS SALES PAYMENT BY SHELL TO ANGUS = £75,079
GAS SALES gross profit = £71,536
Month to date GAS SALES PROFIT £883,063
less Shell 1.5% and Ntsec 0.386p/therm
1)SAP used instead of NBP
Looks like this extended outage has just help push up up the gas price.
(There are several similar so guess the volume adds up to a relevant amount) :
Norway’s Gassco modifies planned gas outage
13:01
OSLO, June 13 (Reuters) – Norwegian gas system operator Gassco revised the details of a planned outage at Dvalin Tuesday, modifying its end date.
The following are details of the outage versus Gassco’s previous guidance:
Affected facility: Dvalin Scope of outage: -9.0 mcm
Start of outage: 2023-02-16T06:00:00+0100
Expected end of outage: 2023-07-15T06:00:00+0200 VS 2023-07-01T06:00:00+0200
Gassco comment: Uncertain duration
Gas prices showing sign of end of spring drop off. If trend continues then revenues over summer into autumn should steadily pick up…..SP should eventually catch on/up with that…..so hopeful for medium term revenue prospects gla
BV,
They have plenty of redundancy in the 2 compressors we know of, meaning they are running at around 70% of their maximum capacity.
A 3rd compressor will give them more "producible reserves" simply because they can continue to produce at lower reservoir pressures than the 2 main compressors need as feed in pressure (surface pressure).
Meaning once the reservoir reaches close to that critical pressure, then they simply run the lower flowing pressure gas into the 1st stage 3rd Booster compressor first, which will then drive up the pressure between the booster compressor and the main compressors to an acceptable pressure level, a level above critical for those main compressors.
A 3rd compressor will do nothing, other than provide back up at this time, which is a "nice to have" but expensive when they need to get these initial short term debts cleared.
CITM,
Not sure how long you are here as i only drop in occassionally, but BV is a waste of time.. they wont entertain anything other than ultra positive statements about the company and attacke the poster rather than counter the point..
I think your wrong in your statement "The really interesting thing will be to see what Angus do next.".. i think that is the concern & the worry..
Despite the nonsense replies this post will recieve, Angus & Gl managed SFB terribly.. their cost & timeline projections were way out, they over promised & under delivered and were not transparent in their communications throughout, covid can excuse some but not all of it... the increased Gas prices is what saved the SFB project and has made it the success it is today.. maybe they knew the high prices were coming but in my opinion it was dumb luck..
i think there is a fear lessons have not being learned and they try the same thing again with geothermal and that the lightning (luck) might not strike twice..
You also have Labour promising to block new Domestic O&G if they get power and there is a good chance they could..
i think the market is cautious rather than excited to see what angus do next.
IMO
My view is that HITS's recent posts show a fair and balanced view of where Angus is during its current development. I see no deramping going on and I don't even think that he/she is being critical of the company. Of course I have seen some of the negative posts in the past, but the past is the past isn't it? We have to let people make mistakes and judge them for where they are now. I have no time for those people who cannot forgive Angus because Brockham didn't work and as long as HITS is posting reasoned posts either positive of negative then that should be welcomed. There are other boards I post on where the place is just full of moronic derampers who can never forgive the fact that they didn't make money on previous investments and just make up lies day in day out. HITS is definitely not one of them.
11/06/2023 01:00:00 11/06/2023 System Entry Calorific Value, Saltfleetby, D+1 41.2700 12/06/2023 12:01:01 L
11/06/2023 01:00:00 11/06/2023 System Entry Energy, Saltfleetby, D+1 2836667.0000 12/06/2023 12:01:01 L
11/06/2023 01:00:00 11/06/2023 System Entry Volume, Saltfleetby, D+1 0.2473 12/06/2023 12:01:01 L
.
12/06/2023 01:00:00 12/06/2023 System Entry Calorific Value, Saltfleetby, D+1 41.2700 13/06/2023 12:01:00 L
12/06/2023 01:00:00 12/06/2023 System Entry Energy, Saltfleetby, D+1 2707778.0000 13/06/2023 12:01:00 L
12/06/2023 01:00:00 12/06/2023 System Entry Volume, Saltfleetby, D+1 0.2363 13/06/2023 12:01:00 L
Canary, so what do you think of a poster who would never own any shares being "once bitten" but posts on here 7 days a week, I would say that they suffer from mental heath but what's your view.
Bubblepoint, your relpy the other day about there being no logic having 3 compressors seems strange imo. If we want to produce at the current or higher levels 3 compressors would let 2 produce whilst 1 can be maintained. I would also think that there would be less stress on 3 compressors rather than 2. RH also stated that having more compression could alter the down hole pressure and increase the field reserves.
The really interesting thing will be to see what Angus do next. If they really want to deliver value for shareholders and develop into a company with a £200+ million market cap then they will have to acquire new assets and fund the development of these from the Saltfleetby revenue. But this is a great place to be. Worst case scenario they continue being boring and we watch the share price rise to 4p over the next year or so. Best case they acquire new assets and have the potential to do many multiples of this. It all depends on the management and their appetite for risk. But it is a good place for the company to be in.
Yes of course I own shares in Angus. I would not be posting here if I didn't. I believe in the company and I believe that in the worst case scenario that Angus will be worth 3-4p per share by the end of the year or the beginning of 2024. When I use the word boring I was being descriptive. It is boring compared to the company it was when it was drilling brockham and risking everything on the success of the drill. However, it is a much better company now and is as you say a stable and reliable producer of revenue. The only problem with this is that on AIm being a stable and reliable producer of revenue is not sexy. People would rather bet everything on one wildcat drill with a share price to go up by 10 times on a successful result. Its a stupid way of investing if you ask me but it seems to be the fashion.
So Canary, you think that a poster that will never buy any Angus shares, but chats here all week is "sensible" really. P.S. do you own any shares in this so called "boring company" which I would call a stable and reliable producer of revenue.
Totally agree ab, easy to get an offer on 3m plus shares in one lump, looks like this is the bargain basement price for now anyway. sitting on hands as likely when they eventually reveal the actual financial status on debt and revenues it may well kick in hard.