Member Info for ab76

Are you sure Aleph have been selling?

Isn’t it the case that the percentage of their holding has fallen as the exercise of warrants has increased the number of shares in circulation?

If Aleph had been selling there would have been a notification. And why would they sell given their strategic partnership?

There are plenty of reasons to be hopeful about Angus’ (near) future performance, but I’ve more hope in a lottery ticket than the “Shell whispers”.

It’s easy to write some untrue nonsense on a message board, but if there were some substance it wouldn’t stay on a message board.

If Angus succeed in producing 300BOPD by the end of the first quarter, there should be some decent profits.

Even if the production and operating costs are high, would they be more than $40 per barrel? Even that high price would leave $40 to $50 per barrel, which would amount to over $4 million per year in profit.

What is the geological & commercial chance of success for the 2 sidetracks at SFB Asked on 1 September 2022

Only one side track is immediatly planned on well 7 and I refer you to earlier extensive answers already provided on these page – we view Chance of Success as extremely high.

A potential further side track into the southern hemisphere from another well has been carefully considered and planning and permitting work will begin shortly. The Chance of Success here is definitely good but harder to evaluate at this stage but this further side-track would open up considerable new resources whereas the immediate side-track is merely accelerating production of known resources by re-entering a part of the reservoir which was historially highly productive ( and the old well addressing it was shut-in only due to a technical failure of the well-bore unrelated to the productivity of the reservoir itself).

https://www.angusenergy.co.uk/media/investor-questions/

How much condensate is being produced at Saltfleetby and how many barrels a day of crude and condensate can the Company expect from Saltfleetby, Brockham and Lidsey. Asked on 2 October 2022

With the current two well profile, the designers estimated about 50 bbl/day of condy from Saltfleetby. In practice we cannot advise firm liquid flow rates to the market with confidence as the wells have been shut in for so long, but for the past two weeks flow rates have been much higher. No reliance should be placed on such a result as liquid flows can be highly anomalous in early days of production after a shut in. We will give formal advice when we are confident that post-shut in reservoir conditions have normalised. Following the forthcoming sidetrack the designers originally estimated 100 bbl/day as per our CPR and this is a more reliable figure to use looking ahead to Q1 2023.

Brockham at full capacity should be delivering about 50 barrels a day, although short term personnel issues is restricting that number to about 30. Our aim is to reperforate the old Kimmeridge well before the end of Q1 2023to address the crest of the Portland structure. So we would certainly expect more that double the current level of production. Together a conservative target might be 125-150 bbl/day for the field (Angus share 80%).

There are several remedial works to be undertaken at Lidsey involving a new pump, changing out the production tubing, hot-oiling. We do have some reasonable expectation that, taken together, these measures will yield a production rate of up to 50 bbl/day at first instance (Angus share 80%) and prior to more capital intensive works such as a side-track. Again Q1 2023 would be a reasonable estimate for works completion.

So it is conceivable that we could be looking at liquid sales across these assets, excluding Balcombe, of 300 bbl/day by the end of Q1 2023. We continue to await a response from the Planning Inspector regarding Balcombe.

https://www.angusenergy.co.uk/media/investor-questions/

Perhaps the best answer to questions if the one, dated October 30th 2022, about revaluing Saltfleetby as it ends with, “this would take into account… better production rates than originally anticipated”.

https://www.angusenergy.co.uk/media/investor-questions/

“In common with most operators we don’t disclose the detail of hedging programmes as we believe that a hedge should be looked at strategically – rather than have shareholders trying to calculate day to day returns around a complex series of swaps. We have have previously announced that we have comfortably met the hedge to date – and would have announced if that had ceased to be the case. We provide gas quantities quarterly and financial reports semi-annually. Essentially what you are suggesting puts us closer to quarterly financial reporting, which demands verification for RNS, and is normally a burden for large cap FTSE-100 companies. Our finance and corporate function is two people.”

https://www.angusenergy.co.uk/media/investor-questions/

I’m amused to see Trinity described as “Leeds based”.

Here’s their Leeds address: C/O Pinsent Masons LLP, 1 Park Row, Leeds LS1 5AB.

It’s their solicitor’s office. Save for remote board meeting, Trinity is based in and run from Trinidad and Tobago. It’s a small point, but their management is physically near the the oil wells and know the place as well as anyone could.

The horizontal well was due for completion in Q1 of 2023 (although probably fairly early as the plan was to hopefully start drilling in December).

The deep well, which is the more important of the two, is also due for completion in Q1 2023 and that remains on schedule, subject though to the caveats announced this morning (the main one is probably regulatory approval).

I can see why, based on the wording of the budget speech, you’ve written what you’ve written Trek, but the budget speech isn’t the law and I’m afraid that you’re mistaken.

The Petroleum Taxes Act (which provides for SPT), was amended by the Finance Act 2020 (see section 5 on page 18 of http://news.gov.tt/sites/default/files/E-Gazette/Gazette%202020/Acts/Act%20No.%2030%20of%202020%20The%20Finance%20Act,%202020.pdf ) to stipulate that “small onshore producers” would not have to pay SPT when the oil price is below $75.01, exempting them from the usual rule that SPT is payable once the price of oil is above $50.01.

Once you cease to be a small onshore producer (which previously meant producing more than 2,000BOPD from a licence, but which now means producing more than 4,000BOPD from a licence), you cease to be eligible for this SPT exemption and must pay SPT on all of your production once oil exceeds $50.01.

Many of the onshore licences produce at low volume. For example, Trinity’s 2,000BOPD or so of production is spread over 7 onshore licences. The purpose of this special rule, which was temporarily introduced two years ago and has now been made permanent, is to encourage investment and growth in these licences. The huge tax increase if you go from 4,000BOPD to 4,001BOPD is unlikely, for now, to be an issue on these licences as they generally have such low production levels. It’s more likely that it’ll be a potential problem for the future as production increases and then hits this buffer.

The special rule for shallow marine only applies to new wells, but there’s no restriction on production. So it doesn’t matter whether your marine well produces 2,000BOPD, 4,000BOPD or 10,000BOPD, as long as it’s new it will be eligible for the new tariffs. When the oil price is between $50.01 and $70 that tariff is 15%, whereas it was previously 25%. Between $70.01 and $90, it’s 20% instead of 25%.

The full text from the budget is available here https://www.finance.gov.tt/wp-content/uploads/2022/09/Budget-Statement-2023-1.pdf (go to page 159).

Looking back, Trinity have actually often take until the Wednesday before issuing an RNS on the budget (and last year almost a week). The news is significant enough for an intra day RNS, but whatever happens I’m sure it won’t be too long before they provide an update.

If the oil price were $65 for the year, increasing production from 3,999 BOPD from one licence to 4,000 would result in SPT of $23.7 million for the year instead of zero. That extra barrel would be a very costly mistake.

I think once you produce more than 4,000 BOPD from any one onshore licence you lose your SPT discount and pay it from $50. That’s a huge disincentive to increase production on any licence producing in the high 3,000s, but it seems that there are lots of onshore licences with much lower production rates. Trinity, for example (which I accidentally mentioned in my post below - I got caught out on the cut and paste) produces about 2,000 BOPD onshore and that’s spread over several licences.

The budget:

1. The investment credit has been increased from 25% to 30%.

2. The $75 SPT threshold for small onshore producers has been made permanent and the definition of a small field increased to any licence that produces less than 4,000 BOPD (note Trinity’s current production of 3,000 BOPD is spread over 7 or so licences).

3. The SPT rate for new shallow water or marine oil wells (which should include Echo) has been lowered. When the oil price is between $50 and $75, it’ll now be 15% instead of 25%. The next tier up is also lower.

4. Other energy taxes will be reviewed and amended over the next three month.

I don’t know what Touchstone’s practice is, but Trinity usually issue an RNS the morning after the budget explaining what they think the consequences are and that might be of some assistance.

The budget:

1. The investment credit has been increased from 25% to 30%.

2. The $75 SPT threshold for small onshore producers has been made permanent and the definition of a small field increased to any licence that produces less than 4,000 BOPD (note Trinity’s current production of 3,000 BOPD is spread over 7 or so licences).

3. The SPT rate for new shallow water or marine oil wells (which should include Echo) has been lowered. When the oil price is between $50 and $75, it’ll now be 15% instead of 25%. The next tier up is also lower.

4. Other energy taxes will be reviewed and amended over the next three month.

Hopefully Trinity will issue an RNS in morning (they usually do after a budget) explaining what they think the consequences are.

Trinidad and Tobago’s budget will be live streamed on You Tube (see https://youtube.com/watch?v=648x2ewQWLY&feature=youtu.be ).

It starts at 6:30pm (UK time) on Monday. Be warned though, it can take a couple of hours for the Finance Minister to get to the energy sector.

Trinidad and Tobago’s budget will be live streamed on You Tube (see https://youtube.com/watch?v=648x2ewQWLY&feature=youtu.be ).

It starts at 6:30pm (UK time) on Monday. Be warned though, it can take a couple of hours for the Finance Minister to get to the energy sector.

“One of the lowest rated small-cap oil producers on London’s junior market is ramping up production, unwinding hedging arrangements and plans to return capital to shareholders.”

Simon Thompson in the IC on Trinity.

https://www.investorschronicle.co.uk/ideas/2022/09/21/targeting-production-growth-and-cash-returns/

There are people who think a 2023 election is possible. The government would be seeking re-election riding on the wave of a bonanza of spending funded by high energy prices and wouldn’t have to worry about the revenue consequence of a further declined energy industry in a couple of years’ time when prices might be back to normal.

Thank you happysparrow.

I know how many people read my tweets and my blog, and where in the world they read the blog. I also know who I exchange messages with and who follows me. Whilst the numbers aren’t enormous, they’re not insignificant either.

Whether it’ll make any difference, I don’t know. However, I have significant investments in Trinidad and Tobago, and would like to see the country succeed. It’s therefore worth making the effort.

Here’s my latest blog: https://ab-76.blogspot.com/2022/09/the-sun-doesnt-have-to-set-yet-on.html