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You need to read page 47 of https://www.angusenergy.co.uk/wp-content/uploads/2021/10/Angus-Energy-Saltfleetby-Reserves-Valuation-Report.pdf robday.

Condensate sells for a £5 per barrel discount to Brent, there’s an estimated £4 per barrel haulage fee, and an estimated £20 per barrel water disposal fee, along with some much small G&A costs. Those figures come from 2021 and it’s therefore possible that inflation has increased them, but they provide a useful indication of the costs.

It is remarkably easy to work these things out: we can read the interim accounts published less than a week ago.

Gas sales in the first half: £15,731,000

Administrative expenses in the first half (which includes the oil assets): £1,499,000

Finance costs in the first half: £856,000

There’s no doubt that Saltfleetby is profitable and the following matters don’t change that: an additional one off £3.5 million derivative payment is due in July due to the late start in production, further payments are due on the loan for all the equipment that was needed to bring Saltfleetby back into production (which the naysayers are now preposterously trying to argue should have been brand new and even more expensive), deferred payments are due to Paul Forrest (but Angus has the benefit of receiving 100% of Saltfleetby’s profit, not 51%), and expenditure on expanding Saltfleetby, geothermal, oil and acquisitions.

Over the past 12 month Saltfleetby has gone from producing nothing to being the largest onshore gas producer in the country (accounting for 63% of production) . It’s nonsense to suggest that the equipment is unreliable. What’s more, would it really have been in shareholders’ interests to have purchased all brand new equipment? How much extra would that have cost? Probably a great more than the cost of a couple of weeks’ reduced production for maintenance.

I’ve sent Angus a couple of questions asking about Aleph’s sale (do they know why or do they at least have a hunch?) and whether any more lump sum payments are due under the hedge. The option to vote on questions seems to have disappeared, so if you’re concerned about either of these issues it might be worth asking Angus about them yourself (visit https://www.angusenergy.co.uk/media/investor-questions/).

It’s a difficult move to assess.

Obviously it’s encouraging that Kemexon are increasing their holding, but Aleph are supposed to be a long term strategic partner and, for as long as they held at least 10% of the shares, had the right to appoint two directors (I think Richard Herbert was originally one of them - he was a non-executive before he became chief executive). It’s disappointing that they appear to be selling (although it is possible that some of their affiliates have been buying). It would be useful if Angus provided an explanation given that they’ve repeatedly stated that Aleph were invested for the long term.

We’re due a further announcement in the coming days (on the new loan) and perhaps they could give the explanation then. Perhaps they could also provide a reassurance that there will be no more hedge surprises.

Still no shares purchases by George Lucan or Mr Herbert. Hopefully, they’re working on something that prevents them from buying (each time they raise money they say they need a portion of it for new investments, but so far nothing has materialised).

“Whilst these historic volume numbers shouldn’t faze the market, the shares have fallen somewhat today which seems totally wrong to me. I recently met with the company and met its new CEO, Richard Herbert and was extremely impressed.

“The operational numbers are in line with expectations which makes the low share price a surprise but right now it”s a symptom of the whole sector which looks amazingly cheap and in some cases carries a proper yield. The patient investors will reap the reward.”

https://www.malcysblog.com/2023/07/oil-price-ceg-longboat-angus-petrofac/

Saltfleetby is a cash machine and money’s coming in.

There are two short term problems with that though as the £12 million development loan has to be repaid from the proceeds (it was down in £9.5 million in March and will have fallen further since) and Paul Forrest becomes entitled to deferred payments.

It should become much less of a problem that all three wells are producing and gas prices are back on the rise.

It’s disappointing that Aleph have sold a large chunk of their holding (assuming that it’s been sold to Kemexon and others, rather than redistributed amongst the individuals who make up part of their group), but since Kemexon have increased their holding by a similar amount it’s overall a fairly neutral development.

The more interesting question is why aren’t George Lucan and Richard Herbert buying (given what they said at the last presentation). There are three obvious answers: (i) they are, but they haven’t issued an announcement yet; (ii) they, despite what they said a couple months ago, don’t want to or no longer want to; or (iii) they can’t because something new is going on that bars them from trading (as explained in one of this month’s Q&As).

A follow on question is why hasn’t the presentation that they indicated would take place “likely in June” been scheduled yet? Perhaps they don’t want to answer questions at the moment because they anticipate a lot of them will be critical or perhaps they are working on something that it’s appropriate to conclude before giving a presentation.

The additional hedge payment is also disappointing. They should have explained the situation better (I wonder whether the fall in gas prices caught them out in some way in that it made some of additional derivatives they entered into less profitable?), but it seems a short term issue and one that rising gas prices, by generating additional income, will soon deal with.

Further, Aleph have only ever held part of their shareholding directly. Much of it has been spread amongst a number of individuals. It’s that combined holding, which has been above 10%, that allowed them to nominate two directors. If it falls below that level, that right to nominate is lost and so it’ll be interesting to see whether there’s an announcement on that.

Although it looks like they’ve acquired their shares from Aleph: https://polaris.brighterir.com/public/angus_energy/news/rns/story/rgzdmvw

Https://polaris.brighterir.com/public/angus_energy/news/rns/story/rnomqjw

They understand the value.

Given the strong indications given by Richard Herbert and George Lucan at the last presentation that they would be buying shares as soon as the closed period was over, we can perhaps either expect to see purchases or assume that one of the reasons they’ve given in these answers as to why they can’t buy shares applies (management are “evaluating disposals, acquisitions or approaches etc etc”).

We’re also due another presentation shortly (one was promised for “likely during June”, but presumably they has to wait for the interim results and couldn’t arrange it for the 30th).

Hi, Your Share Price is now around 1.1p which is around the worst it has ever been yet we are producing good solid returns from SFB in Condy & Gas.

Whilst I assume the BOD are as unhappy about this as the long term shareholders are collectively we would like to know what your plan of attack is from the BOD to help recover or boost the SP – MCAP to where we all expect this to be today.

Thanks Asked on 2 July 2023

With production up at Saltfleetby, the Board’s priority now is to identify inorganic opportunities for growth which would provide the route to a £100m valuation. The Board is also evaluating the potential value in the longer-term of a gas storage solution at Saltfleetby.

Now the site appears to be in stable production can you confirm what the condensate figures are now? Asked on 2 July 2023

Releasing quarterly production RNS today/tomorrow and will detail production of gas and condensate.

Hi, Why have flow rates been lower at Saltfleetby since the reported annual maintenance last week? Thanks Asked on 2 July 2023

There has been more extensive maintenance undertaken than originally planned on the B Compressor Caterpillar engine, to date involving only relatively simple replacement parts. These are generally reliable engines but this is the first service after re-entering duty and just like a car, the first service is often where the most work has to be done.

Are management/directors now free to buy shares in the company once the Interim Results are reported on 30th June? Thank you Asked on 2 July 2023

Yes, unless the Board considers them to be in possession of price sensitive information not yet released to the market – i.e. if management were evaluating disposals, acquisitions or approaches etc etc.

Hi, Is the new well continuing to clean up to the company’s satisfaction and when will the new permanent flowline at Saltfleetby be operational? Thanks Asked on 2 July 2023

The B7 well has continued to clean up over time, although it has taken longer than predicted, we believe because of the chemicals used in the reservoir section when the sidetrack was drilled. We are confident that the clean-up will be sufficiently advanced to allow the well to be connected to the facilities with the new permanent flowline when that line is expected to be ready by the end of August.

What was the reasoning behind obtaining more of the short term debt funding at a high interest rate, surely now you are producing a decent cash flow a more favourable option could gave been sought? Asked on 2 July 2023

You are right that cashflow from the field is obviously very strong but our repayment schedule on the senior debt also accelerates with that higher cashflow and this final rolled hedge payment (arising from late production in 2022), when netted with other rolled hedges, turned out to be larger than expected. Angus is taking on additional short-term debt to manage the settlement of that hedge as well as to provide working capital for Saltfleetby and evaluation of acquisition opportunities. The alternative to this debt, which is necessarily subordinated to the senior debt, is equity – and that would be an expensive solution for what is only a short term cashflow issue.

Angus have answered a number of questions from shareholders - see https://www.angusenergy.co.uk/media/investor-questions/

Amongst the answers is confirmation that an RNS on output is due in the morning.

The lenders and bond holders are major shareholders. Moreover, they’ve paid a lot more than the current share price for their shares.