Member Info for HeadInTheSand

Gideons, it's all about the hedge.

I actually never said that ANGS would never get the loan - though I was certainly critical of the delays in getting that sorted.

This remains really simple. If ANGS produces 1.5 million therms from July 1st, it'll do fine for three months. IF it gets 1.5 million therms out in June, that's a very nice revenue bonus to it and SEL.

ANGS then needs the sidetrack to be successful and deliver a production increase by Oct 1st at the latest. If that sidetrack is successful and doubles production volumes to 3 million therms per month, ANGS (and SEL) will do extremely well (though it has to be said, not as well as Mercuria on the other side of the hedge). Back of a fag packet calculations in this case? Around £22 million of revenue each to ANGS and SEL for the 13 months between June 22 and Jun 23, with £39 million for Mercuria. If you think the sidetrack will kick in earlier than Oct, add another £2 million each to ANGS and SEL per extra month.

If the sidetrack is unsuccessful, then the differential in making good on the swap contracts to Mercuria make things massively problematic for ANGS and SEL. In that case, Mercuria still gets its £39 million, but ANGS and SEL would be left with just £4.8 million each over that same 13 month period.

* Gas presumed at 250p per therm throughout.

That's all, really. It's - as usual - all and only about how much gas and by when. Anyhow, less than 8 weeks now until George's latest prediction for full production (!) and exactly 12 weeks until the hedge kicks in. The next two to three months will be interesting...

So let me get this straight.

Only this morning ANGS states that it has "confidence in our ability to achieve First Gas in June".

Just now ANGS states that is saying that it "continues to target First Gas by 1 June allowing for one full month of unhedged production".

Leaving aside the fact that "target" is one of those weasel word terms like "hold and encourage contractors" or "aiming for" or "has confidence in", this sharp change in messaging is surprising. As is the fact that George is now stating that the company is aiming for first gas and full production to be simultaneous. If so, that'd be unheard of.

We'll know soon enough.

£7m revenue per month? This nonsense again... it's a bare-faced lie.

We've been told today that first gas - and not full production - isn't until June. There's no way they'll then get a full month's production (1.5 million therms) out in June. AND Even if they did, that at today's open market June gas pricing (250p per therm) would only equal £3.75 million of revenue, of which ANGS would get half. Not really £7.2 million, is it?

And how about future months? Well, come July (the very next month) , the hedge kicks in, which means that the sell price for the first 1.125 million therms of gas produced gets sold at 41.4p per therm. Even selling the balance at unhedged pricing delivers a total revenue of £1.4 million, of which again ANGS gets half.

The lies that the rampers are spreading are just ludicrous. You can't argue with simple maths.

BV you may recall asking me a while back if I still considered the whole FSP to be a "charade" (and yes, that was the word I used). I did then and I do now.

I'll agree that having this charade finally put out of its misery at least offers a little more transparency, which has to be a good thing, no matter what.

My! What a cogent argument - you really are seething, aren't you? Perhaps unsurprisingly, following today's news.

Maybe an RMA (a realistic mental attitude) would have been more useful to you throughout? Just a suggestion, mind you...

BV I would suggest that your clear bitterness should not be directed at those pointing out evidenced facts - no matter how unwelcome those may be - but would be better targeted at those who have continually spouted unrealistic nonsense in the first place.

Hang on...

1.5 million therms represents a full month's production.

First gas now isn't going to be reached until some time in June, according to George.

Thee is an inevitable delay between first gas and full production to allow for testing (the most optimistic estimate I've heard is 2 weeks).

So how can 1.5 million therms be produced in June?

Jollifant, unlike many, I sat through that entire interview and yes, I agree - hence my phrasing of "this was apparently said (according to LSE anyway)". In fact, I commented that George had never said full production in May at the time (and of course, got shouted down).

Speaking of "deceptive conmen," the number of times that utterly false LSE interview synopsis has been gleefully copy n pasted on share bulletin boards by the ramptastic squad is literally uncountable. One would think that LSE has a lot to answer for in terms of misreporting so badly, if that's what it did...

Regardless, It is good to see that this latest groundless exaggeration has this morning been thoroughly debunked.

First gas June (hopefully)... full production July 1st (it has to be).

It is still just about do-able Yanis, but it's getting squeaky tight. As you will be fully aware, because of the hedge, the key milestone is full production by July 1st. Nothing else matters in the short term.

You're welcome to see me as anything you like, BV. Genuinely the saddest comment from you this morning at today's utterly unsurprising revelation that first gas (and not full production) is likely to be reached in June is your statement that George must be under-promising, so he can over-deliver...

Name me one single time during his whole history of tenure at the ANGS helm that he's ever done that??? For God's sake in an LSE puff interview just a week or so ago, this was apparently said (according to LSE anyway):-

"Furthermore, shareholders can expect 1.5M therms of gas to be produced from May..."

I mean, seriously?

Yanis, this can't be a surprise, surely?

George has just announced that the company is "confident" of reaching first gas in June. That directly contradicts his recent statement in the LSE interview that 1.5 million therms (a full month's production) will be produced for sale - and all at unhedged pricing - within that month.

It also brings the point of full production start perilously closer to that "must hit" July 1st date.

George really needs to stop changing his story so often. It just makes the market (quite rightly) wary.

That's what today's RNS clearly states:-

George Lucan, CEO, commented: "...since which time confidence in our ability to achieve First Gas in June has risen,"

So now all the nonsense about 1.5 million therms being produced in May (or June for that matter) as spouted by those not interested in reality will presumably stop. First gas does not mean full production.

But they absolutely do need full production to start July 1st, because of the hedge...

As I've said, launching an FSP in the first place based on an all-confetti offer from a cash-bereft debt-ridden minnow like SOU always seemed bizarre, when George throughout has been promising that untold riches are literally just around the corner, so it's well past time that this charade was ended.

Looking at the timing of when the FSP was announced and the placing that followed almost immediately afterwards, it could very easily be argued that it was never launched with the purpose of selling all or part of the company in the first place. However, we'll never know.

As to Shell having committed to buying any gas that ANGS may produce - that's entirely true, but also entirely irrelevant. There'd be no shortage of buyers for gas, no matter what - and it's the hedge that has the greatest effect by far on earnable revenues from the field when in production.

Anyhow, aren't we due a bid from Shell today for the entire company at 5.77p per share? That's what GavinP was banging on about earlier this week - let's see how that pans out.

Stockbob, you clearly do not understand what P/E ratio means. Here's a clue - if you decide to value a company by assigning a P/E ratio of 5, that really does not mean you merely multiply projected annual revenue by 5.

This is basic stuff, fergawdssakes.

SOU have no cash and shedloads of debt. If people here believe what George is saying (this time), then an all-confetti offer from SOU even at 2p should be laughed at and utterly rejected.

Let me guess... it was the Lady of Aim that was the source.

You say that Jollifant...

Two things. A heightened gas price would make the need for a successfully drilled sidetrack even more crucial. However, the current July 22 gas price is 258p per therm, so just a teensy bit to go.

https://www.barchart.com/futures/quotes/NF*0/futures-prices

To be fair, Stockbob, when it comes to recent BS production, your personal flow rate has been skyhigh.

That can't be right? Gideons stated full gas production of 1.5 million therms from May 1st? Like he guaranteed first gas by end of March?