The letter of support has now also be removed from UKEn’s website:
https://ukenergystorage.co.uk/
Summit/Sumitomo have clearly had second thoughts..
It isn't necessary to count up the individual transactions to work out how much money UKOG has gained through issuing shares, you only need to look at shareholder funds on the balance sheet and exclude the money gained (or lost in UKOG's case) via the P&L.
If you are going to count up the individual transactions then you need to include the cases where UKOG has issued shares to pay for things like interests in HH-1 or drilling equipment.
For example the £6,175,000 issued for 22% of HH https://www.investegate.co.uk/announcement/rns/uk-oil-gas--ukog/completion-of-further-interest-in-hhdl/5376012
The bit you didn't read states they are "still assessing". Here is what the write-offs so far have looked like when they are forced to reassess due to being moved out of intangible assets, have well results or abandoned:
2018 BB-1 "unable to be used for production" £9.25m
2018 "Holmwood operator abandoned the site" £1.21m
2020 Horse Hill "impairment charge of £7.89 million"
2020 "HH-1 should be impaired by £9.35 million"
2021 "HH-1 should be impaired by £1.46 million"
2021 Isle of Wight write-off £946k
2022 "HH-1 should be impaired by £2.9 million"
The next sentence, as I’m sure you read, states:
“ At this point the Company is still assessing the potential of the remaining assets and will continue to develop and evaluate these assets in the coming year. Since their acquisition dates there has been no further material changes to the Licence areas. The directors therefore consider that no further impairment is required at 30 September 2023.”
i.e. we have done f all with these assets, so have no additional information, so leave their book value unchanged.
“Costs directly associated with an exploration well are capitalised as exploration and evaluation intangible assets until the drilling of the well is complete and the results have been evaluated”
A perennial reminder that the intangible assets figure in the balance sheet is not a valuation, just a record of how much UKOG has spent on assets that it hasn’t be able to monetise.
Shareholders funds from share sales increased by £95.3m between 2013 and 2023, add to that the £2.4m raised this FY, you get to around £97.7m.
In return shareholders have a company worth around £1m, so the actual figure is just shy of £100m.
Taking the difference in accumulated P/L loss ignores the fact that the £33m in intangibles is valued by the market at about zero.
Looks like Sumitomo isn’t too keen on being publicly associated with UKOG then, not surprising given UKOG’s track record of loosing over £100m.
I’m amazed that any non-AIM CEO would be fall for SS’s self-serving BS.
"To continue to cooperate with UKEn with a view to SEEL or Sumitomo investing in future hydrogen storage projects"
The point is that if they wanted to invest in the Portland scheme they would say so, but choose not to.
If there was any material news in the letter you can be sure UKOG would of released a RNS.
In the annual report UKOG said:
"Success in this, or even a subsequent second allocation round, would ..."
"UKEn has also identified further hydrogen storage sites, one in Dorset and one in East Yorkshire which we are also intending to pursue and secure Revenue Support for in future allocation rounds."
It looks like they are laying the ground to admitting that they aren't in a position to bid in this year's allocation round and that Dorset isn't a good location.
If they switch to Yorkshire then they are directly head to head against established players with much better financing, experience and links to local industry.
Seems like Summit is as desperate to find takers for its proposed hydrogen production as UKEn is to find a use for its proposed hydrogen storage facility.
Dorset doesn't seem a particularly attractive location for Summit though, comparing with other proposed facilities:
Bracton to Aldbrough Hydrogen Storage, Yorkshire 150kn
Bracton to Keuper Gas Storage Project, Cheshire 265km
Bracton to Portland 375km
There doesn't seem to be any near term plans for hydrogen pipelines over these sort of distances, causing both UKEn and Summit serious problems.
The early hydrogen storage projects will be located very near hydrogen production facilities, which rules out Dorset.
And even when RF/YA have been paid off UKOG is still burning at least £250k per month that needs funding from future share issues.
£370k of debt remaining and £1m marcap, so they still have to sell about 37% of marcap.
They ask for 6% each tranche, so only another 6 more tranches to go.
Recently there's been about two weeks between tranches, so looks like at least three more months of the SP falling.
How it started in June 2023:
"The facility provides the company with working capital at competitive terms to fully fund its planned key UK and Turkey activities over the coming year. The discharge/conversion terms are attractive in that they will be either at zero discount to the lowest daily VWAP in the 15-days prior to conversion, or at a premium of 35% to the Reference Price of the relevant drawdown, whichever is lower. This is in contrast to the likely heavy discount to the Company's share price associated with a more traditional share placing in today's financial climate."
How it ended up:
Prev close before RF/YA funding was 0.058 or 0.58 in new money.
Now issuing shares to repay the loan at 0.0241, i.e. at a 98.6% discount to the SP at the time the loan was arranged.
For the wisdom of these kind of decisions SS earns £338k a year.
Envoi haven't even added Loxley to its website yet:
https://envoi.co.uk/projects/active-projects/
The UK project that it does list has been there for two years with no takers.
It appears you’re referring to Sumitomo's collaboration with H2Pro, an innovative Israeli company recognized for its IPR in electrolyzers. H2Pro has been named one of BloombergNEF's 12 Climate Innovators and was a recipient of the 2023 BNEF Pioneers Award.
What IPR does UKOG possess? A downloaded copy of a 15-year-old planning application for a long-abandoned project doesn't qualify.
I did manage to do some research into why UKOG were talking to Sumitomo, they own 50% of SES Water, the water company in the Redhill area.
I suspect SES is interested in HH-2 as a major source of water for its network.
Ocelot,
Do you ever seek independent confirmation of what SS says? His track record isn't great, is it? So far, he hasn't been proven correct about anything, losing over £100 million of shareholders' money on his dubious plans.
Looks like they have given up on using Loxley and HH as the hook to get punters to buy their confetti, five tweets in a row for UKEn.
Shame there is no requirement for large-scale hydrogen storage in Dorset.
The actual figure is given in the results of GM RNS:
"This is an ordinary resolution to grant the Directors with authority to allot and issue shares and grant rights to subscribe for shares in the Company for the purposes of Section 551 of the Act conditional upon Resolution 1, 2 and 4 being passed up to the maximum aggregate nominal value of £1,627.00"
They added on 50% of the EBT issue as an admin change, just as at the AGM they will add on 100% of the further CLN issues.