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Bubblepoint,
A couple of quick questions.
1. Do all wells need compressors? I am trying to understand how they plan to develop SFBY. They are submitting planning applications to test the Namurian (?) I think.
2. The CPR mentions 18 BCF . Excuse my ignorance but the existing 3 wells is not enough to extract this. Am I correct?
Any advice you can provide is appreciated.
A_D
I think I spotted my mistake. I debited the Derivative Liability twice. First time when It gets transferred to Amortised Cost and Second when it gets posted to P&L. The amount "plus the amount transferred to Amortised cost" should be excluded.
Sorry.
A_D
Thanks Gallder.
I had recalculated the inflows and was curious as to how the outflows were valued. This is not just about ANGS; I am also trying to learn about things properly.
I am trying to understand the Debits and Credits for both the B/S and P&L. I thought that as its FVTPL the balance sheet movement by simple difference would be posted to the P&L. I don't understand why the cash payments to Mecuria are shown separately. I thought :
Once Hedge closed / crystallises => Dr FVTPL (B/S) and Cr Liability Amortised Cost
Pay hedge => Dr Liability Amortised Cost and Cr Bank
B/S Hedge movement (FVTPL movements on closed and open positions, plus the amount transferred to Amortised cost) get posted to the P&L. Given that there is a timing difference between the last reported value of the closed hedges and the date the hedge closed/crystallised, I thought there could be a FV movement also. In this case :
Dr Derivative Liability and Cr P&L
I sure I'm wrong about something. Any help you can provide would be appreciated.
A_D
Gallder,
I am trying to recalculate the Derivative liability so will need the months up to Jun 25. I am just trying to understand the balance sheet better and how things work.
Thanks for any help or advice.
A_D
Gallder,
Is there any way to view 'historic futures curves'; for example, if I wanted to see what the curve looked like at the end of Sept 21 and Sept 22?
Thanks
A_D
Sept 22 accounts
From To Therms Fixed Price
1-Apr-25 to 30-Jun-25 3,750,000 0.3525
Mar 23 accounts
From To Therms Fixed Price
1-Apr-25 to 31-Jun-25 3,750,000 0.4500
Typo on the Fixed price?
A_D
Valuation-it-is
I think all transactions are in GBP (functional currency). Also, FX is usually reported as a separate line in the P&L.
A_D
I'm lost now. If £7m hit the P&L in Sept 22 and £8m should have hit the P&L in Mar 23, where did the extra £3m in Mar 23 come from?
Maybe I'm confusing myself. lol.
A_D
Gallder,
On further investigation I noted in Sept 22 acounts Note 25 (Pg 70):
Sept 21 Derivative Liability £51.4m (£25.7 x 2 since the rest of 49% was Acq during the period)
Sept 22 Derivative Liability £158.7m
P&L Charge should be £107.3m (by difference) but its actually £110.3m. So, I thinking the payment is blended into P&L in the Sept 22 accounts but shown separately in Mar 23.
A_D
Cheers mate.
That's quite possible. Maybe it's just a timing issue with cash flows.
A_D
Gallder,
Page 72 in the pdf. I just used the RNS.
Cheers,
A_D
To add:
From the Placing RNS 19 Dec:
- Hedge expenditure: £3.3 million. As part of the Company's rolling hedge programme relating to gas sales from Saltfleetby, and due to the late start of production from Saltfleetby, some of the original hedged volumes due in Q3 2022 were closed and new hedges of an equivalent amount, but at much higher prices, were restruck in H1 2023.
£11m paid + £4m deferred = £15m
£15m due less £8m swap loss for the period = £7m
£7m-£3m (placement) = £4m deferred
Someone has been telling porkies in the FS imo. They did use the word "closed" though.
A_D
Gallder,
My understanding is the same as yours; its the nature of a trading house.
I am now doing a little more detailed analysis. I see your post on 1 Jul 2023 14:56 stating that for the 6 month period ended March 23 ANGS generated an £8m swap loss, yet they reportedly settled over £11m with an additional £4m deferred. Thus I agree with you the Jul and Aug 22 Swaps were closed and not "rolled".
Does this mean the Sept 22 Financials are incorrect since the Amortised amount for the derivative liability is ( and should have been) £7m and not £4m reported (Note 26 in the FS)? Given that the report came out in Mar 23, they would have known this?
Thanks
A_D
The only thing I can think of is that it was some sort of forbearance or restructure; ANGS had no money and Mecuria had no choice. Irrespective of the CEO comments, the Financial Statements do give details (Mar 22, Sept 22 and Mar 23) of the amount of therms and the fixed prices. This suggests that the "old" positions were closed and "new" ones opened. Unless, one believes the Financial Statements to be purposely misleading and the Auditors for the Yearly's incompetent.
A_D
WG818
I think we are interpreting data differently.
1. Under note 11 of the Interims (Mar 23) they only mention £3.5m being due on 20th July 2023. Thus at March 23, my interpretation is that £0.6m has already been paid. They would have mentioned the £4.1m if it was a separate liability. My mistake in retrospect as I am now looking at the accounts since reviewing your question.
2. With regard to how the derivatives work, my thinking is the same as that of Gallder's and HITS' as I have some work experience in that area. I am no expert, but I am happy with my interpretation.
I think we may just have to "agree to disagree" on this one.
Thanks for the feedback.
A_D
WG818,
I believe the £4.1m due in June was partly paid off and this is now the £3.5m payable in July. I don't think they are two different liabilities. I could be wrong; the timing is sus, but I have to revisit the RNS and Q&A to see if I missed something. My thinking is that if there were two payments due we would see these as liabilities in the March 23 accounts since we have been meeting the hedge requirements.
Hope this clarifies my thinking.
A_D
Thanks HITS. Will take those on board.
Ocelot,
I saw a Bridge Lon of £3m in Note 9. TRADE AND OTHER PAYABLES.
Cheers,
A_D
Gallder,
Thanks for all the feedback. I should have stated my assumptions more clearly. I also made a couple of mistakes (seeing these per your feedback).
1. £6m Bridge Loan will be used to pay the Derivative outstanding, SFBY working capital and new initiatives (per interims) thus i excluded it (the revenue side) since those costs were not included in the cash flow.
2. The interest is a rough estimate on Senior Loan. Will update based on your feedback
3. I did not realise £4.2m Senior Loan repayment is due in Sept 23. Will update.
4. Seeing that they were borrowing more to invest in other opportunities, I assumed trade payables were paid with free cash from revenues for Apr-Jun
5. I ignored the receivables since the balance reduced from Sept 22. I assumed there is an amount long outstanding in there.
6. Cash £3m at the end of Mar 23; I went with WG818 opinion that cash is from the £3m Bridge Loan. The Loan RNS indicated that was for SFBY (which was still being drilled and commissioned in Apr and May) .
I do wholly agree with your point "Other than that and the fact we have no idea what has actually been paid"; this may be an exercise in futility, but I have decided to do better research instead of relying on what the CEO says.
Thanks again.
A_D
HITS,
Thanks for the feedback. To answer your points in turn:
1. I have done "stressed" scenarios at 80p and 50p a therm also.
2. According to the interims £4.2m is "due within one year" for the Senior Loan. I just took half as a 6 month estimate. For the Def Acq cost they paid £1.2m in 6 months; this is is consistent with the £5.5m due when spread over 2.25 years from Apr 23 to Jun 25; works out to about £1.2m every six months. (Hopefully my maths is right).
3. The infamous hedge payment will never be known. lol. What I have surmised is that they will use the £6m Bridge Loan to settle that (£4.2m or £3.5m). Can't say there isn't anything else given previous comms on the situation.
Hope that clarifies and thanks for the feedback.
A_D