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A reminder of the importance of Saltfleetby to UK onshore gas production: https://twitter.com/AimNasdaqNyse/status/1653679160877883392
And it’s only going to get better with the new well and the prospect of another side track to open up the southern lobe.
Although has prices have fallen by almost 50% since Christmas (between now and June tends to be the year’s low point), it’s worth remembering this answer from December 30th 2022 (see https://www.angusenergy.co.uk/media/investor-questions/ ):
“There is according to CPR, about 18 bcf or very roughly 180 million therms of P90 reserves here and again 12 bcf or very approximately 120 million therms of C1 resources which we hope to be able to convert to P90 reserves soon. At a forward price of £1.50 per therm you have a value of around £450 million of topline value on those 300 million therms. Now some of that (less than 15%) is hedged at 41 pence per therm and some if is going back to lenders in interest and principal (although the loan is already below £10m) and some has clearly been lost in extra costs – but what are we talking about on this raise: £7 million. Shareholders get to keep several £100’s of millions. It is not a daft trade.”
It look as though gas exports should be up almost 20% this week to about 6mmcsf per day (from 5.3), with a further increase towards 8-10mmcsf from May 10th. It’s good news.
That they can also now focus on other assets is also good.
Although it’s taking longer than hoped to bring the new well fully on stream, there will be an RNS in the morning and we know from this morning’s answers that although “It will take some time to balance the plant to accommodate the new well and dual compressor operations and shareholders should be able to see a rise in exports from National Grid’s website over the coming days and weeks.” A rise in exports over the coming days sounds like new and promising information.
You’ve misunderstood the answer Onetomany. This morning they stated that: “With 2 compressors now available, and taking account of the condensate stabilization capacity of the plant, there is clearly potential to produce at 8 to 10 mmscfd from the 3 wells.”
The bottleneck is the “condensate stabilization capacity” as they’ve made clear that the existing wells are flowing at 5-6mmscfd and new well at 4-5mmscdf. 10mmscdf has long been the target and they’re close to achieving it. 8 isn’t bad.
Then there’s the next sidetrack on the southern lobe hopefully to come next.
What specifically/technically gives management confidence that the flow of the new well will improve with further clean up, is it normal to take this amount of time and how much improvement can be reasonably expected? Thanks Asked on 30 April 2023
The duration of well clean up is highly dependent on the nature of the drilling fluids used during the drilling phase of the operation. In the case of the B7 well, the need to bridge the formation with calcium carbonate mud to prevent fluid loss to the reservoir and differential sticking has led to higher levels of solids flowback. These solids are a consequence of breaking down the bridging agent with acid to allow gas to flow into the borehole. Samples taken during the well test indicate a steady reduction with time in solids production and this is expected to continue during the production phase. We know from other Saltfleetby wells that clean up can take a number of months to achieve.
Hello, you stated in your RNS of 18th April that you expected the new well to clean up further and that this is likely to raise the flow rate in the future.
Can I ask what management expectations are of what that flow rate is expected/hoped to be?
Having now completed the multi-rate flow test, can I also ask what management expectations are now of the 3 wells combined when plateau production occurs in the summer with the new well flowline? Thank you. Asked on 30 April 2023
The 2 existing producing wells, A4 and B2, are currently flowing at 5-6 mmscfd. The recent multi-rate flow rate on the B7 well has shown the potential for this well to produce at 4-5 mmscfd at a flowing pressure of 30 barg, with potential to clean up further. With 2 compressors now available, and taking account of the condensate stabilization capacity of the plant, there is clearly potential to produce at 8 to 10 mmscfd from the 3 wells. It will take some time to balance the plant to accommodate the new well and dual compressor operations and shareholders should be able to see a rise in exports from National Grid’s website over the coming days and weeks.
Having read Angus’ answer to export of new production, it looks as though Push2’s opinion was broadly right. It’s a shame that some people here and on Twitter (possibly the same people) have behaved like ********s in response to his comments.
We have had a great many questions on the RNS of March 28th, April 7th and April 18th and the status of the temporary and permanent flowlines connecting the new B7T well to the process plant and so to export sales. Rather than repeat all of the questions we have endeavoured to supply a single answer to all as below. Asked on 30 April 2023
On 18 April 2023 we announced the actual flow test results from the previous weeks’ multi-rate flow test. The RNS went on to state that “whilst [the well will be] producing through a temporary connection, the new well flowline will be constructed to enable full plateau production this summer”.
Although the last reference to the summer has been misinterpreted by some investors as suggesting that there will be no commercial production from that well until summer, which is not at all expected to be the case, we believe that the announcements have not been misleading although the reasons require some technical understanding of how we expected clean up to proceed in the RNS of 28th March and how it actually did proceed.
During clean up operations we recovered a significant amount of drilling mud (with light base oil), but also aqueous hydrogen chloride (unspent acid), calcium chloride and trace amounts of calcium carbonate (the bridging agent), along with sand and other mineral particulate (formation). In short we had deliberately performed an intense acidization to clean the productive wellbore of an equally heavy amount of calcium carbonate, which was employed during drilling to prevent hole collapse, leading to high levels of solids in the reservoir formation around the borehole.
It only became clear quite how long it would take for these solids to dissipate during the course of the well clean up and it should be understood that they also pose a risk of damage to the processing plant if they are not managed carefully. For that reason, the new well is being introduced into production in a slow and careful fashion and earnest time has been spent in the last fortnight performing thorough and professional assesments and mitigations of any residual risks.
As of going to press, all of this equipment necessary to mitigate these risks has been procured and added to the temporary flowline and thus we stand ready to make the first attempts to flow gas into the system. Given this is material information and we are in any event obliged to update our earlier timetable of sales gas by the end of April, we will make an announcement by RNS on Tuesday 2 May on the status of the connection.
Hi, Does the company have plans to increase it’s PR over the coming weeks, particularly as we have a new CEO? Some months ago, the company was rightly praised for its communication, offering regular interviews by George Lucan along with frequent twitter updates. Since then it has almost been radio silence. Is this a conscious decision and if so why? Thank you Asked on 1 May 2023
You can expect at least one interview in the next few weeks as we endeavour to advertise our increased flows to the wider market. Thereafter we would expect to be giving a fuller update on Company strategy, by way of online/mediated presentation, likely during June. We are conscious that in the past we have overpromised and underdelivered as regards timelines, so we are reviewing our corporate communications and use of Twitter in order to ensure that any statements can be made with a high level of conviction and so to build a deeper level of trust with shareholders. large and small. Nonetheless we will make use all contemporary forms of communication.
They’ve just added this one and hopefully an answer is about to appear: “We have had a great many questions on the RNS of March 28th, April 7th and April 18th and the status of the temporary and permanent flowlines connecting the new B7T well to the process plant and so to export sales. Rather than repeat all of the questions we have endeavoured to supply a single answer to all as below.”
Some months the answers are a day or two late, but they’ll be published here https://www.angusenergy.co.uk/media/investor-questions/ and this Twitter user says Angus have confirmed the update will be tonight https://twitter.com/IntheKnow2023/status/1651891460839546880
https://twitter.com/IntheKnow2023/status/1651891460839546880
A lot of criticism, often unfair, is directed at the board. Yet you have to look hard to find another AIM oil and gas company where the interests of shareholders and directors are as closely aligned. There are no large salaries here (George Lucan is on £120,000 - more than most workers, but modest when compared with the pay of other listed company executives) and the directors will only get their big payout if the share price reaches 3p. That said, Angus urgently need to clarify the position with regard to the sidetrack production (I asked a question the other day and I’m sure others have too - hopefully we’ll get some answers in the following days).
Angus published good news on September 9th 2022 and that was a Friday: https://www.lse.co.uk/rns/ANGS/saltfleetby-flow-rates-f82olkinj8quzak.html