The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Asher, unlike you GL cared to specify a date. You copied a statement showing GL stating September but there's also a statement where GL states Q4 will be met. I've said repeatedly that I'm happy with these statements. H1 however averages 6.2-6.5 as I have previously calculated in detail for you using formulas and numbers Angs use themselves. If you just meant a certain part of the hedge is met then you should really specify which part as the hedge is 3 years long and peaks in H123.
MayQueen, can you confirm where the 10mscf capacity comes from. I thought GL said 5.
If the revised hedge for H1 is 195mmscf per month, well that's 6.29mmscf/D no matter what method you use.
From the document Yanis provided it shows ave monthly requirement for H1 is 160.96mmscf. The same document shows that the daily rate to achieve this is 5.19 on 31 day months and 5.37 on 30 day months. It's simply the monthly total divided by the number of days in the month.
Now add the deferred amount on which as you calculated is 34.49. You get 160.96 + 34.49 = 195.45.
195.45/31 = 6.3
195.45/30 = 6.5
Not sure why a few on here are intentionally spreading misinformation but I'm sure it's now becoming obvious to most who to watch out for on this BB.
We'll cover the hedge with the help of a 2nd compressor which in a few days we'll hopefully get confirmation that it will be installed this year. If so, this we have no problems and we'll be churning unhedged gas. The reality is really great news, why the ramp crew have to go one step beyond to look for false super duper news is beyond me. Real great news is just fine.
Yanis, I'm not sure what price has to do with the calculation. We don't need to include price.
If the revised hedge for H1 is 195mmscf per month, well that's 6.29mmscf/D no matter what method you use. That's my calculation and it was yours yesterday so what's changed.
From the document you provided it shows ave monthly requirement for H1 is 160.96mmscf. The same document shows that the daily rate to achieve this is 5.19 on 31 day months and 5.37 on 30 day months. It's simply the monthly total divided by the number of days in the month.
Now add the deferred amount on which as you calculated is 34.49. You get 160.96 + 34.49 = 195.45.
195.45/31 = 6.3
195.45/30 = 6.5
These are numbers you provided, this is the method you provided. If you pushed a wrong button when calculating then just be honest and come clean. You've posted many times saying we're ok with 5.5mmscf/D. We'll deliver the hedge worse case. Don't worry, we'll make loads of money at 5.5mmscf/D.
Clearly you're own calculation proves you wrong. Own it or prove me wrong.
I'm not trying to deramp here, I'm trying to get to the truth so we can all be on the same page.
Yanis, below is what you posted a day or so ago:
Yes, there is the deferred July/August hedged amounts. But these are deferred to Q1/Q2 next year.
The deferred amount equals to an additional 34.49 MMSCFD per month (103.47/3). This takes the hedge amount for Q1/Q2 next year to 195.45 MMSCFD per month.
you state 195.45mscf per month.
31 days per month
= 6.29mscf/D.
You then go on to say 5.5mscf will cover this requirement.
Help me make sense of what your saying. I'm more than happy to agree with you but I keep running the numbers and getting a different answer to you.
I'd argue Smiller that those with the fixed assets already purchased and in place will have an extraction cost of <$20. They can just keep churning as the assets have probably already paid for themselves. New companies opting for the leasing/subcontractor method will have lower capex but higher opex spend so a very different break even point. We just need a hedge above $100 and we'll be great.
One other thing to mention is the quality of our product. The first products to feel the impact in reduced demand will probably be the low grade stuff. Is that why AA are interested? We don't know but I'd rather have >60% than <60%.
There's the other side of the coin also.
The one where China stops messing about with lockdowns
Where China sort their property market out
Where the war in Ukraine ends and the rebuild begins
Where countries all over the world bounce back from recessions and pump money into infrastructure
Who knows how it will play out but all we need is enough uncertainty for AA to decide to lock into a 3 year hedge for 100% at $100.
I respect your view Chris and we all know what would happen if AA pulled out but what would happen if they locked in for 3 years at $100.
This is AIM, this is mining. There's risks. It will go one way or the other or fall somewhere in the middle.
BV, I've only spoken facts and been real here with expectations. 6-7p in 12-18 months depending on what GL can do with the cash. Seems balanced to me. Yet out of everyone you've taken the most offence to me trying to keep the BB grounded.
Q. Why would a balanced viewer take offence to a balanced view.
A. Because they're not a balanced viewer, they are a ramper.
If you're not a ramper then you're an emotional investor who has got crazily overexcited with the recent news and now you can't contain it. Either way, you need grounding.
Peter, just read the bottom of your post.
£6.93 average therm price. That's bullish
Angs should generate £8m from the hedge yes.
At 17p cost that's £3m cost. They'll be some tax also but as I'm expecting the 2nd compressor online come Jan23 I'm not expecting there to be an issue with cashflow.
Peter, you have had to calculate that total yourself. Angs provide the totals for you in the most recent set of accounts. It adds up to 19.125m not 18,120,397.
If we assume as GL says that Sept and Q4 is covered. So in my book I'm happy to accept that. Now recalculate H1 based on the actual figures provided by Angs. It's higher than 5.5mscf/d.
Again, I said before. This is not the end of the world because I'm expecting news soon to confirm the 2nd compressor will be installed before YE. So come Jan23 we'll be producing upwards of 8mscf/D.
So in summary:
1. We need more than 5.5 to meet the H1 hedge
2. 2nd compressor likely to be in place before H1 starts so 1 not a problem.
3. One compressor has a capacity of 6 according to GL. I'll listen to him and not the ramp crew hoping to see 7 tomorrow and it just keep growing into perpetuity.
Put a lid on it boys. 5.88 is great news. Don't spoil it.
MQ, shorts tend to believe the SP will go south. 4-6p is North of 2p.
A lot of clever know it alls on here who actually don't know a great deal. Amusing though. Let's hope we can blow the doors off GL's advised capacity tomorrow and knock 7mscf out. Come boys, who's with me.
BV, I never said my exit was 6-7p. It was a guide on what I thought Angs may be worth further down the line.
What was subdued about what I said. It's merely pointing out that GL said he could squeeze 6 out of a compressor. Would you prefer if I join the ramping crew and say "come on, let's have 7 tomorrow and then it'll be 8 by Monday. Loads of money. 10p by Christmas.
Please correct me if you know more but didn't GL say 5 + 20% for the one compressor?
Peter, several here have attempted to calculate the flow rate required to meet the future hedge. Most calculations come in higher than 6. I haven't heard GL say that 5.5 will meet H1 quota. He did say Q4 would be met so where are you getting your information from?