Member Info for HeadInTheSand

Bullish or not, today ANGS increased the number of shares in issue by 915 million (or 65%), with over 250 million more to come, subject to shareholder approval..

It 's acquiring the whole of SEL for £250k up-front, plus 637 million newly issued shares (28% of the enlarged number of shares in issue), plus up to £6.25 million of deferred cash payments.

On top of that it has conducted a closed subscription placing of 273 million newly issued shares to raise £3 million with Aleph or associates.

And as per the loan terms, it's given the lenders 5 million newly issued shares, this being the anniversary of the loan.

That now puts 2,283 million shares in issue.

On top of that ANGS, intends to hold another closed subscription placing of a further 273 million newly issued shares to raise a further £3 million with Aleph or associates, but as today's actions have exceeded the existing authority it has, it needs a new authority to be agreed by shareholders to do this.

I'm also of the very firm opinion that shares can happily and easily be borrowed to forward sell. Not by PIs of course, but certainly by those well-connected in the City.

Regardless of whether it's permissible or not, it very obviously happens all the time.

I don't know whether SEL can be said to "have taken a hit" on Saltfleetby. What the owners of SEL have done is derisked themselves entirely from anything to do with the field (good or bad) in exchange for 28% of the totality of ANGS.

So they could reasonably be said to have actually only sold 21% of their 49% stake (as well as getting a 28% stake in any other ANGS asset).

Tygra, entirely agreed. Sensibly (!!!) George has said the company has no appetite to break the hedge, nor to re-hedge (again sensibly, the intention is for ANGS to become a producer, not some vehicle for futures speculation).

ANGS has doubled down on risk/reward today - in taking on the entirety of the hedge (which hasn't itself been derisked at all), but simultaneously putting itself in a position where it will benefit from the entire post-hedge nett revenue from the field over the next three years, and of course the entire revenue from the field for the years following that.

Is it a good deal? That's for others to decide. SEL seems to have ended up with 28% of the entirety of ANGS on its side of the bargain.

Maddog, I (and apparently you too) have literally no clue what you're talking about. I have no clue what you even mean by "SFB CONTRACT" - and I strongly suspect you don't either.

For better or worse, ANGS is in process of acquiring the entire share capital of SEL (and obviously including its 49% interest in the Saltfleetby field/licence) under the terms and for the considerations outlined in today's RNS. End of.

As for "doubling " whatever nett revenue it was going to get out of Saltfleetby, yes ANGS has done that... but in doing so, they've also given away 28% of the entire company (and apparently taken on another $£1.4 million debt).

BV the hedge and the "breaking" of it has been discussed many times before. If permitted by the party on the other side of the hedge (Mercuria), it gets breakable at "mark to market" rates at point of breakage.

As of right now the mark to market cost of getting out of or breaking the hedge would be an eye-watering £64 million.

Tony, I have left Brockham to one side entirely, quite corect.

Your post actually said: "The main benefit of owning 100% is that even with the lowest prediction of 1.5 therms per month (and without the sidetrack) Angus can now cover the hedge and make a profit (around £7 million per annum)."

First off, the hedge is no better or worse covered off than when it was the joint responsibility of ANGS and SEL.

Second, you stated "...make a ***profit*** (around £7 million per annum)." No. The remaining gross revenue (not profit) out of Saltfleetby to ANGS at 1.5 million therms a month is around £6.3 million year one at current gas prices. Out of this, it has to pay fixed and variable field opex, financing costs and general G&A. Profit would (obviously) what'd be left after that.

Baits, that's a very disingenuous comment from George. He has amply demonstrated he has form for these, cf March's beauty that "1.5 million therms in June = £7.2 million of revenue" (never true... try £2.4 million).

Without a sidetrack and at 1.5 million therms a month, 97% of all field output is hedged over the next three years. With a production doubling sidetrack kicking in from say October, 51% of all field output is hedged.

But that's from a "production over the next three years" viewpoint.

The key word used by George here is "revenue", which makes it very hard to ascertain what he actually means, because he's not qualified it. He seems to be talking about the forecast revenue from the field over its entire hoped-for production life (which is of course hoped to extend into 2031, or 6 years after the hedge expires and using that to calculate his 70% figure.

You're both just plain wrong.

The hedge hasn't changed at all - it's 52.375 million therms over 36 months, just as it has always been.

The production that the field will deliver hasn't changed (whatever it may turn out to be).

The statement "even with the lowest prediction of 1.5 therms per month (and without the sidetrack) Angus can now cover the hedge and make a profit (around £7 million per annum)" is complete and utter nonsense. At only 1.5 million therms a month of production, ANGS's total gross revenue (NB revenue, not profit) would be £6.3 million in the twelve months to end Jun 2023. That hasn't changed in total either (it used to be £3.2 million to ANGS and 3.1 million to SEL).

The only thing that has changed is that ANGS now has to cover the entire hedge and now gets all remaining revenue from the field.

Honestly, you guys... how can you fail to understand the very simple basics?

The hedge hasn't changed - it was on the field's output, after all. It's just that it's now going to be entirely ANGS's responsibility to cover (and of course any nett revenue from the field will go entirely to ANGS).

Taking the two extremes...

1.5 million therms of production ongoing from Jul 1st this year and using today's future gas pricing would deliver:

c. £64 million to Mercuria, courtesy of the hedge and then c. £23 million total of remaining gross revenue to ANGS over that three year period.

Increasing production to 3 million therms a month from Oct 1st 2022 via a successful and production-doubling sidetrack and again using today's future gas pricing would deliver:

Still c. £64 million to Mercuria, courtesy of the hedge (this doesn't change) but then c £102 million total of remaining gross revenue to ANGS over that three year period. This of course would be a complete game-changer.

It's still all about that sidetrack, if this is to be genuinely transformational.

JohnHenry, yes totally incorrect... you're mixing monthly therms with mmscfd.

As I've stated, the hedged volumes total 52.375 million therms over 36 months. That's as near as dammit 1.5 million therms a month.

ANGS's best of all possible worlds production forecast (including a fully successful sidetrack kicking in at some point) is 3 million therms a month (and in fact that would also be the maximum volume of production the field can handle, according to ANGS itself)....

Now you do the maths...

One question...

How can ANGS acquiring SEL's 49% interest possibly mean that "In that regard we should note that over 70% of overall field revenues are unhedged"???

Literally nothing has changed regarding the hedge. It exists exactly as it has always been, namely 52.375 million therms having been hedged at known fixed prices over the 36 months starting from July 1st. The sole difference is now that the responsibility for it (and of course the destination of the entire nett revenue from the field) will be ANGS's.

Given that the maximum ANGS production prediction from the field is 3 million monthly therms if its as yet to be attempted sidetrack is successful, it's clear that in the very best case, 50% of production is actualy unhedged over the next three years.

Sure, it's definitely not as simple as "doubling production = halving Opex", because some opex costs are variable, rather than fixed.

However TBF, water disposal is no longer going to be a major cost issue at Brockham

Noel, just 80% is ANGS's.

OPEX cost per barrel? Traditionally about $45 as a rule of thumb, isn't it?

The usual ad hominem refusal and indeed inability by the heavenly choir to address any serious points raised. No surprise there then.

Never mind, just a week to go before George has assured one and all that Saltfleetby will be in full production. How exciting.

Though apparently not exciting enough for GP Jersey, who wouldn't want to be in this weekend.

Well, if people want to close their eyes to the fact that a single organisation that has held over 12% of ANGS shares for a considerable time first decided based on everything it knows that fair worth for those shares was 1.5p of SOU confetti each...

../and when that didn't come off, decided based on everything it knows that what, 1.2 or 1.3p of real cash per share was something worth taking - and yes, at this precise moment in time...

...that's of course up to them.

Well...

One organisation very well connected with the company over a significant period of time doesn't seem to think this is the imminent, 120%, cast-iron, nailed-on multi-bagger opportunity that several on here try to make out. One cannot help but wonder what their forecast is for all things ANGS and why it's led them to sell up and move out, when untold riches are allegedly just around the corner?

Weren't GP Jersey ANGS's single largest shareholder by a fairly long way?

So... "MM games!" being used yet again in an attempt to explain a fall in the SP. Got to love that hoary old chestnut.

Providing it's less than 4 weeks, no, it doesn't matter.

Very simply, a minimum of 1.125 million therms a month needs to be produced from July 1st, or ANGS will find itself having to cover shortfalls on the hedged volumes at a nastily high cost. I think it is generally accepted that ANGS should be able to achieve this (and a bit more) by that drop-dead date.

And then a minimum of 1.75 million therms a month needs to be produced from Oct 1st, or ANGS faces the same cost problem in terms of making up hedge shortfalls. ANGS's ability to deliver on this increased volume would seem to depend entirely on the drilling of a successful sidetrack and it is much less clear if it can achieve this.