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Well, let's take the period through to end June 2025 when the hedge finishes - and let's see what the nett profit is likely to be from Saltfleetby, given ANGS's existing obligations.

If ANGS only produces 1.5 million therms a month throughout that period, it generates £23.3 million of revenue for itself (and £66.4 million for Mercuria at current gas prices).

Out of that £23.3 million and within those three years, it has to pay back the loan (c. £14 million inc interest), pay Forum the cash part of the acquisition (£6.25 million), and pay off the Knowe CLN (£1.4 million).

That would leave ANGS with just over £1.6 million out of which to cover three years of field opex costs....

As has been clear for months and months, ANGS will struggle to make any nett profit out of Saltfleetby over the next three years, unless it drills a successful sidetrack. The recent acquisition of SEL has changed nothing about that... that sidetrack being successful is crucial.

Yet again, at 1.5 million therms a month, ANGS generates a revenue of £6.2 million in the 12 months to end June 2023, after it's settled the hedge for that year.

One blatantly obvious error in those calculations is the assumption that any revenue ANGS manages to generate out of the field in June this year will be replicated every month.

Leaving aside the fact that ANGS now cannot possibly manage a full month of production in June (as the company itself has admitted), that is simply just not true.

But hey, I see the "Shell's gonna buy us outright!" rumour is being punted again, despite having been flatly debunked by the company...

...and as per usual, people conveniently forget to mention that the first 1.5 million therms of monthly production doesn't deliver revenue at 137p per therm or 120p per therm... try 43p per therm.

At production of 1.5 million therms a month, ANGS's revenue out of the field would total just £6.2 million in the first 12 months, after it's made good on the swap contract differentials. What's more, an increasing gas price doesn't benefit ANGS even one tiny little bit at all unless it produces more than the quantities it has hedged.

Quite correct Yanis.

As has been stated, currently George can only raise £3 million via his placing/subscription of 273 million new shares at 1.09p with Aleph. He's limited by having hit the ceiling of his existing authority to issue new shares.

So he'll be looking for a new authority very soon to allow him (as the RNS states) to issue a second swathe of 273 million new shares to Aleph to raise a further £3 million pounds and thus raise the £6 million that the company apparently needs.

So there's another c 12% dilution coming - but at least this is already public knowledge.

Yanis, yes, I see your point - but I wasn't in the least surprised at the oddity or the fact that things don't add up.

Probably because I find it near impossible to believe anything George says or take any of his statements, promises, predictions or assurances at their apparent face value. I suspect that ANGS was close to running out of cash (or at least breaching the positive bank balance condition of the loan) and it found it needed more money to complete Saltfleetby and also to fund the sidetrack attempt.

The fact that George mentioned needing to keep the lenders and the regulatory authorities happy in the recent RNS suggests that having taken on SEL's field responsibilities as well, he also may now be obliged to increase the provision insisted upon for eventual de-comm, which would be a requirement regardless of whether the field eventually gets decommissioned or not.

Yanis, it doesn't matter what George believes. It's basic maths (and I also think if you examine George's statements about "paying the loan off by year end" carefully, you'll find they're always qualified by a quiet "if the sidetrack is successful" condition).

if the field only produces 1.5 million therms a month, then what with the hedge and using today's future gas pricing, then in the first 12 months, the field delivers a total of £36.8 million revenue from sales of gas.

Of this, Mercuria gets £30.6 million on the differential on the 12 swap contracts in that year, leaving ANGS with the remaining gross revenue the next 12 months of £6.2 million.

You'd accept it's a tad hard to pay off a c. £14 million loan (capital plus interest) out of field revenues totalling £6.2 million?

And that's why the sidetrack is crucial.

Again, it is simply not possible for ANGS to pay off the £12 million loan by the year end if the sidetrack doesn't perform as George hopes. Yesterday's acquisition of SEL doesn't change this picture in the slightest.

This should come as no surprise to anyone. Two days ago it was impossible for ANGS and SEL to pay off the loan for which they were jointly responsible within 12 months without a successful sidetrack... so why should ANGS taking over SEL's revenues from and liabilities on the field make the slightest difference to this? Answer: it doesn't.

I doubt that tax losses can used to lessen the negative effect of bad bets on the futures market.

Nicos, perhaps it'd be better to let those who can actually understand an RNS talk?

Yanis, you're welcome.

The only thing you've not got quite right is that half of the unlocked subscription shares you mention can't in fact be issued without shareholder approval.

But yes, both SEL (with 91 million unlocked shares at 1.09p) and Aleph (with currently 273 million unlocked shares at 1.09p, but this may well double shortly) have unlocked shares to do what they like with.

And no I am not saying there's going to be another placing per se...

Just that to raise the second £43 million of the £6 million that ANGS says it needs, ANGS requires shareholder approval, which if it gets it, will result in the issuing of another 273 million new shares to Aleph at 1.09p odd, on top of the 273 million just issued to the same party at the same placing price.

It's all in the RNS... the confusion is caused (probably deliberately) by there being two completely separate lots of 546 million shares being mentioned. One lot's going (with 91 million others) to SEL and the other lot's going to Aleph, with the second half of that needing shareholder approval to happen.

Yanis, I proke it down for you.

Prior to yesterday, there were 1,368 million shares in issue (see 10th May RNS for confirmation).

Yesterday's RNS announces 2,283 million shares in issue. That's a difference of 915 million shares which are being newly issued.

637 million to SEL as part of the acquisition (nominally valued at 1.2p within that deal).

5 million to the lenders as part of the loan anniversary conditions

273 million placing with Aleph to raise £3 million at a palcing price of 1.09p.

There's your 915 million new shares all accounted for.

On top of all that, ANGS needs (apparently) to raise ANOTHER £3 million, so wants approval to place a SECOND LOT lot of 273 million new shares with Aleph, AGAIN at 1.09p odd.

Let me break it down for you.

ANGS announced the issuing of 915 million new shares yesterday (unconditionally), increasing the shares in issue to 2,283 million. Here's where they went:-

91 million to SEL (at an assumed valuation of 1.2p). These can be sold immediately the deal is completed.

A further 546 million to SEL (again at an assumed valuation of 1.2p). These are locked-in for up to 15 months and with the above give SEL 28% of the entirety of ANGS.

5 million to the lenders (this is part of the loan arrangement - it happens on every anniversary),

273 million placed at 1.09p odd with Aleph to raise £3 million. These shares are not locked in.

Total of the above? 915 million.

Now, ANGS is seeking approval to issue anoter swathe of 273 million shares over and above what has been detailed above to place again with Aleph at 1.09p odd to raise a further £3 million. If approval is given, that would take shares in issue up to 2,556 million (and that would also reduce SEL's holding down to just under 25%, as stated in the RNS).

Hope that makes sense.

(another 273 million, not 274 million)

Yanis, I am afraid you're wrong.

The new shares to be issued as part of SEL acquisition deal do not need shareholder approval. Yes, they're valued a 1.20p and yes various parts of them are locked in for up to 15 months.

Entirely separately...

Here's what yesterday's RNS had to say about the £6 million fundraising placing at 1.09p odd per share:-

"...the Company has concurrently arranged a direct subscription with affiliates of Aleph International Holdings (UK) Limited ("Aleph") pursuant to which Aleph has subscribed for a total of 546,000,000 Ordinary Shares in the Company at a price of 1.09896011 pence, being £6,000,000 (Direct Subscription) split into an initial unconditional tranche of £3,000,000 and a second tranche of £3,000,000 conditional on Shareholder approval."

Read that last bit carefully - it's the second half of the Aleph placing (at 1.09p odd) that's conditional upon shareholder approval. So if that is given, another 274 million shares (or 12% further dilution if you'd rather) will be issued with no "lock-in" period at 1.09p odd.

Yanis, the acquisition part of the news released yesterday deals with newly issued ANGS shares valued at 1.2p. That's what SEL is getting as part of the deal to acquire it, lock, stock and barrel.

The cash raise part of the news deals with newly issued ANGS shares being placed with Aleph at 1.09p odd. 273,000,000 shares are being placed at that price, raising £3 million gross. ANGS intends to double that cash raise (i.e. placing another 273,000,000 shares with Aleph at a price of 1.09p odd to raise another £3 million gross), but needs shareholder approval to do so, because it has now reached its existing authority.

So the extra 273 million shares will be placed (with Aleph) at 1.09p, not 1.2p, if shareholder approval is granted.

Yanis as per yesterday's RNS, there's a further 12% dilution coming (subject to shareholder approval). Another 273 million new shares to be issued and placed at 1.09p odd to raise the second £3 million ANGS clearly needs in order to meet the requirements of both the lenders and the regulatory authorities.

That's going to put the brakes on any near-term possibility of a significant SP increase.

SB I agree with you. The newly issued SEL shares are indeed locked in for the periods you specify (the newly issued Aleph shares aren't).

And again yes, ANGS's need to raise a further £6 million (£3m of which has been raised with shareholder approval required to permit the second £3m) does from the phraseology used in yesterday's RNS seem that it's required both to maintain the minimum positive cash balance that's a hard condition of the loan - and to satisfy regulatory authorities in some way. The latter may well be down to ANGS having just taken on the full 100% of decommissioning liabilities.

Additionally, if ANGS is given permission to raise the extra £3 million on top of the £3 million it raised for funding via subscription placing today...

...that would give Paul Forrest/SEL as was 25% of the newly enlarged share capital and Aleph plus associates at least 21%. That's getting perilously close to a majority holding between the two parties....