Member Info for HeadInTheSand

PeterA, since you asked that question (great question too), George has gone on record - and very recently - to state that monthly production without a sidetrack will be 1.5 million therms. That's fine for July to September, but would be 250k therms per month short against monthly hedged quantities from Oct 22 for 9 months.

Why would that be a problem? Because at current Oct 22 gas pricing, (253p per therm), the hedge for just October owes Mercuria over £3 .5 million (1.75 million times (253p-52p) - and utterly irrelevant of how much or how little gas is produced. That would leave ANGS and SEL about £140k of gross revenue each to cover all G&A, op costs and financing costs. The same would be true from Nov to Mar, after which things would get worse.

That's why ANGS needs a successful sidetrack.

Noel, as you know, a successful sidetrack delivering the extra levels of production that George hopes for would indeed be an utterly transformational game changer.

So will an unsuccessful sidetrack - but entirely in the opposite direction.

It'll all become clear soon enough. First crucial milestone: full production by Ju,y 1st (sooner if possible). Second crucial milestone: successful sidetrack by Oct 1st (sooner if possible).

I see the intellectual quality of the posts from the ramptastic squad is at its usual standard. Truly compelling.., well done.

Gideons claims "As we all know HITS makes it up as he goes along."

This from the poster who just in the last few weeks has maintained:-

"First gas by end March! The company said so!" (It never did - Gideons knowingly through a desire to mislead or unknowingly due to sheer stupidity entirely misrepresented an RNS).

"£7.2 million revenue per month!" (Literally mathematically impossible, due to a combination of gas pricing and the hedge).

"1.5 million therms to be produced in May!" (Again literally impossible and now confirmed by the company as being so).

He's looking to "drown out" all opinion that differs from his ramptastic wild exaggerations and falsehoods. (Why is he so desperate to control the narrative? I think it's obvious).

...and I'm meant to be the one who makes things up?

A. Because I did hold shares until I got fed up with the company's eternally missed scheduled.

B. Because the UK could really do with the gas.

So... Gideons foolishly yet clearly confirms that he's seeking to "drown out" opinions that don't match his...

How utterly unsurprising. And how typical of a propagandist desperate to stifle any debate.

Gideons, from your reply, it seems clear that you are in fact too stupid to understand the content of an RNS. The issue of course isn't with what Q1 means, but with the phrases ""continues to hold and encourage" and "to work to".

Baits, quite the contrary. The sooner Saltfleetby produces, the better - as I have repeatedly said, my greatest annoyance is that it wasn't brought to production many months ago.

Gideons, you say as your excuse for continually stating "first gas by the end of March!" up until a month ago that you were "repeating what the company RNS said as well you know".

Well, here's the phrase you relied upon and kept quoting to "prove" your 6 weeks of assurances that first gas would be reached by the end of March. . It's in the Jan 27th ANGS update RNS and it says this:-

" The Company continues to hold and encourage suppliers and contractors to work to a First Gas date in Q1,"

So, there are just three possibilities here.

Either you're too thick to be able to interpret what an RNS is actually saying

Or you deliberately chose to misrepresent what the company said

Or you were deceived by the company.

Which of the above applies to you?

At best Gideons, you demonstrated that you're too ignorant to be able to interpret an RNS.

As I have said before, I've paid for my right to express an opinion on ANGS. Not that I or anyone else ever needed to, since this is a share discussion forum and not the ramptastic echo chamber you so fervently try to create.

I object to the blatant lies, exaggerations and misdirections being spewed out here by more than a few . Here's some classics from the just this year alone:-

"There'll be no placing!"
"First gas by end March!"
"£7.2 million of revenue a month!"
"1.5 million therms in May!"

You may recognise all of those "statements", Gideons, because you've certainly repeated each one more than once this year alone. So when confronted with such utter BS, I feel it appropriate to put forward fully evidenced facts instead as a counterview.

(Which of course you cannot cope with, so instead all you can do is resort to trite and made-up insult - but that's fine by me).

Gideons, more lies. Never once have I said I'd "like harm to come to ANGS".

As per usual you make stuff up in a desperate attempt to distract from your inability to deal with facts when presented.

Speaking of blatantly making things up, you spent much of the first weeks of March repeatedly insisting that first gas would be reached by the end of that month. Your utter lack of interest in the truth and your tactics remain obvious.

Sure, but it's not relevant. Here it is:-

"However it would be open to the company to break or reset the hedge once the loan was repaid – although this would incur a normal mark to market charge – allowing for more dynamic hedging – i.e. picking particular moments to reset the hedge. The amount of hedged production after, say, two years would be less than c 25% of total production (including production from the sidetrack)."

All this says is that (if ANGS had an awful lot of cash) it should be possible to buy its way early out of the hedge at a mark to market rate. But all that means is that the future disparity between the remaining swap contracts is calculated at a certain point in time and ANGS would have to pay that as a lump sum to Mercuria.

Gideons, what you either just don't understand (or choose to try to mislead about) is that Mercuria is sitting pretty on the ohter side of the hedge and come what may, is contractually due tens of millions of pounds under the long-enshrined agreement.

This remains true no matter whether ANGS lets the hedge run its entire 36 month course (and has the revenue to pay the differential each month, only because the sidetrack turns out to be successful) or whether ANGS attempts to buy its way out early (staggeringly unlikely because this would require an enormous amount of cash).

The lies are getting more desperate....

The hedge and the loan are two entirely separate arrangements. The only thing they share is timescale. The loan comes to term in Summer 25, which is also when the hedge comes to an end. The lenders, who compelled ANGS to take out the hedge, obviously set that timing deliberately.

However - as the company has already made crystal clear, the two are not connected. Paying off the loan early (if ANGS has the cash to do so) categorically would NOT affect, reduce or shorten the hedge in the slightest.

You want the quote from the company re this? Here you go:-

Investor Question: A member on LSE chat board has stated that even if the loan is paid of early, The Hedge remains in place for the remainder of 36 months. Is this true? Asked on 20 December 2021

ANGS answer: YES, the hedge is for a fixed term on a declining balance which roughly aims to decline with the scheduled loan repayments. It would be very likely (assuming we succeed in obtaining target production from the side track, itself 100% unhedged, and representing windfall gains at present forward gas prices) that the loan would repay earlier, BUT THE HEDGE WOULD BE FIXED on that scheduled loan amortisation profile.

(CAPS are mine).

Can we at least stop the lying about this specific point?

Oh and the 36 individual monthly quantities hedged are available for all to see in the Oct 26th CPR/Valuation report. They total just under 52.4 million therms, spread over those 36 months, varying between 1.125 million therms and 1.75 million therms per month.

There are two critical objectives that must be hit (courtesy of the hedge). ANGS must be producing a minimum of 1.125 million therms a month from July 1st and then a minimum of 1.75 million therms a month from October 1st. According to the very latest info given by George, the second of those production levels is going to require a successful sidetrack.

Of course if the sidetrack is drilled and it is successful and it produces an extra 1.5 million therms per month from October 1st, everything will be just fab. If it is unsuccessful, everything will be extremely dubious looking.

It's pretty simple and pretty digital really.

Saltfleetby won't flop. The question is, who will it provide revenue for?

As to the exhortation to only "read, grasp and take in" ANGS RNSes, it would only be fair to point out that over the years of the current CEO's tenure, a significant proportion of the information RNSed and expectations set thereby has sadly turned out to be wildly overoptimistic and nowhere even close to the eventual reality of things.

Here's just one classic example from an ANGS RNS on Saltfleetby back in June 2019:

"At this stage the Directors are confident that reconnection at commercial rates is possible within the £2.5 million budget and advised timescale of completing work between May and August 2020."

As everyone knows, two years and at least an extra £12 million later, the field is still not back in operation. Typical RNS phraseology like "are aiming for", "are targeting", "expect", "are confident that" and so on give the necessary wiggle room and get-out clauses - such RNSed statements are (clearly) neither definitive nor guaranteed.

Yes, that quote above is almost three years old, but it's sadly typical and clearly makes the point. As does pretty much any other RNSed Saltfleetby timescale projection issued over the intervening months.

So by all means read the company's RNSes - but take note of the language used and especially take any information provided therein with a considerable pinch of salt.

Jollifant, I have said before now many times that Mercuria is the party that cut the best, most lucrative and absolute sweetheart win-win deal in this. They're contractually certain to get tens of millions of pounds at current gas pricing over the three year life of the hedge.

...and now they're back

Gideons, do you understand what "mark to market" means?

...apparently. I wonder why?

JD-Nau, you are right that the company did indeed say that - and fairly recently. This was when George changed his previous statement that 70% of projected production was hedged and decided to move that estimate down to 50% for whatever reason.

However, I would draw your attention to something else George even more recently said. He stated that a full month of production would deliver 1.5 million therms without a sidetrack. However as I am sure you are aware, 1.75 million therms have been hedged per month from Oct 22 to Jun 23...

You would presumably agree that 1.75 million is a larger number than 1.5 million?

I'm not guessing here. Like you, I am solely going on company statements and thus being utterly factual. The above two statements cannot both be true, yet they have both been made by the company.

Over to you.

Gideons, George has told us what he expects the two producing wells to flow (1.5 million therms per month). That's a not insignificant increase over what those wells flowed on average over the last 12 months of unimpeded production at the field - though there may have been a pressure build up over what will be c. 4 1/2 years of inactivity, so let's go with that figure.

They do not (and cannot) know what a sidetrack will deliver. However, one absolutely does need to be drilled successfully and it absolutely does need to deliver an increase in production volumes from October, in order for the hedge to be met for that and the following 8 months. Sure, if it doubles production volumes as George hopes, everything comes up roses. But it must add a minimum of 250,000 monthly therms to expected production to avoid costly shortfalls against the hedge from October.

Purely factual.