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They can't (obviously).

However, what is abundantly clear from the actual hedged volumes being finally revealed is that a successfully drilled sidetrack seems completely essential.

New news... page 49 of the just released Angus Energy Saltfleetby Reserves Valuation Report DOES in fact FINALLY give information on the volumes hedged.

So Q3 next year, ANGS has hedged 3.34 mmscfd (I'm not sure how prudent that is? Obviously depends on produceable volumes).

Then for the next three quarters (up to end Jun 2023), it's hedged volumes over 5 mmscfd - that simply has to depend on a successful sidetrack being drilled?

Then for the next year (Jul 2023 to Jun 2024) it's hedged volumes in the region of 4.5 mmscfd.

Then for the last year of the hedge (Jul 2024 to Jun 2025) the hedged volumes are around 3.8 mmscfd.

https://www.angusenergy.co.uk/wp-content/uploads/2021/10/Angus-Energy-Saltfleetby-Reserves-Valuation-Report.pdf

Given that we've continually been told that the hedged volumes represent "c. 70% of conservatively estimated production volumes", it's clear that ANGS is hoping for roughly 7.5 mmscfd of production come Q4 next year.

To me that seems very distinctly bullish rather than conservative, without knowing what (if any) effect a sidetrack will have, no? Weren't SFBY's best production levels ever in the past around 5 mmscfd?

Nom, I don't think ANGS can be criticised for the hedge. And let's face it, it seems to have been imposed on them - very sensibly at the time - by the lenders of the £12 million, no doubt as a condition of providing the financing.

Nobody could have foreseen the incredibly steep rise in gas pricing when the hedge was set - setting it at the levels it got set at was pure commercial prudence at that time.

There are potential problems with the hedge, but they're not related to the 43p per therm fixed pricing. Having a pop about that is mere Monday morning quarterbacking (to borrow an apt expression from across the pond). Hindsight is as always an exact science...

Instead, those potential issues are related to ANGS 's ability to produce sufficient quantities to meet the volumetric commitments of the hedge (and hopefully more than that). Okay so the market has not been told what those volume commitments are (merely that they're "70% of conservatively hoped for production") - but it's all still about how much gas can be consistently produced (with or without sidetrack) and by when.

As stated before, looking at market reaction to today's RNS, at this stage and after all this time, it'll only settle for hard numbers on those questions before deciding to vote with its feet.

So... OIL has issued an updated CPR, primarily taking into account the elevated pricing of gas. Unsurprisingly this leads to a predicted increase in gross field revenues. Why is this news? Anyone more positive on this BB has been banging on about this for weeks and weeks?

The info on the "uncertainty about the precise start date for the side-track well" is interesting, because again it sounds like ANGS wants to drill the sidetrack as soon as possible. Given that sidetrack drilling is liable to cause a delay (or interruption) to gas production while it is being carried out, that must be a tough judgement call to make, as previously commented upon (i.e. weighing up the short-term vs the mid-term).

The "conservative" estimate of first gas now being mid-March comes as no surprise and so isn't really news either. I do wonder - as per above - whether early sidetrack drilling (if taking place) will cause any further slippage.

So, plenty to digest, but no real new news. Guess what? It still remains all and only about "how much gas and by when?" And it looks like those are the questions that the market is waiting for firm information on (rather than estimates), before deciding to react one way or the other (ANGS needs to re-earn credibility via cold hard results, as BV has pointed out).

As for Brockham PL235 being extended? No surprise there either - except perhaps for the 5 year length of extension granted. Either way, that pushes that one into the long grass for a good while yet.

Speaking of "it's not dead... it's just resting" assets, does anybody know if ANGS has applied to the OGA for an extension to its PL 235 licence that covers Brockham? If it hasn't, it better get a very rapid move on...

PS I've just confirmed that the OGA website gives an estimated expiry date of 27th October 2021 for ANGS's current Brockham PL235 licence... so ANGS looks like it's having to get busy pretty quickly if it wants to get another extension to this.

These newly revealed plans must presumably form the central plank in their efforts to get a licence extension. Which is something the company will definitely want to obtain, because there are cost ramifications around abandonment if the licence is allowed to lapse.

StopStart you are of course absolutely correct re planning. Mea culpa.

However, something's been niggling me re expiries on Brockham coming to pass about now - on reflection and after some brief research on the OGA website, it seems to be ANGS's PL235 licence that is about to expire and that will need extending again.

Can someone remind me when existing planning permission for Brockham was due to expire? Very VERY shortly, I believe.

This looks very much like a last minute attempt to get new planning simply in order to avoid having to take abandonment costs for the site on the chin.

It's more than fair to say that Croqman's posts are invariably bang on in terms of realistic assessment. I don't remember disagreeing with a single one of them, even though he and I happen to be (allegedly) on so-called opposite sides.

JD-Nau, as has been made repeatedly clear, the information that a sidetrack was going to take 16 weeks was supplied by ANGS itself (which it has since rowed back on, sure, but the company itself was the source).

Please let's not resurrect that embarrassing chestnut.

Also, nobody - not cheerleaders, derampers nor the company itself - can possibly know how much gas the field is going to produce (either with or without successfully drilled sidetrack) until consistent production has been achieved.

Which is why it remains all about "how much gas and by when?" for ANGS.

Cuddo/ED, you do make me laugh.

You say "We know that they have addressed the elephant in the room"... and that's perfectly true. As I've said, getting agreement to postpone an Apr 2022 debt repayment of £1.4 million which it wouldn't have had, was a good thing for ANGS - but far more an absolutely essential thing. Yes it may have cost the company an effective c. 12% annual interest rather than the previously agreed 4% to secure the extra 12 months, but in my very firm opinion, this was the only sensible option for ANGS to do.

And yes, this looming £1.4 million payment was indeed a very large "elephant in the room" - as anyone having done even minor research on ANGS would have known.

But (and here's the question), if this was such a significantly worrying and glaringly conspicuous elephant in the room... how come you never mentioned it even once throughout your undeviating positivity, since appearing here (under this ID at least) a couple of weeks back?

Of course, now that ANGS has brought the matter to clear public attention, you're singing the company's praises at the top of your voice for dodging this particular bullet (at least for a further 12 months)... but you never once mentioned it before?

Disingenuous much?

The fact remains that the extension is good news for ANGS. It's the very necessary postponement of a debt , since ANGS (and everyone else) knew that it wouldn't have the cash to pay back the £1.4 million in six months time. The only way it could have raised this would have been via a placing - and at current pricing levels including necessary placing discount, that would have been very nastily dilutative.

So, although this 12 month extension has cost ANGS another 8% on top of the already agreed 4% annual interest, with a view to the massive unpleasantness of limited alternative options, it remains the only sensible thing to have done right now, given the company's continuing pre-revenue state.

Ocelot, what do you imagine the other side of that particular coin is? What's the explanation for the noticeably increased activity and appearance of "new" IDs over the last few weeks?

I wonder if Knowe has been forward selling its free 11.2 million shares over this period...

...except if Knowe were in for long-term value, again, why wouldn't they have been happy with 140 million shares in April at 1.0p? Because if ANGS starts making significant profits out of Saltfleetby before (now) Feb 2023, all Knowe gets is £1.4 million in cash, and their chance to acquire shares then at 1.0p disappears entirely, if ANGS pays them back?

Yanis, there genuinely is obvious reasoning, no matter how others would wish to pretend otherwise.

However, separate to that and as I am happy to keep saying, the deferment of the CLN is definitely and without a doubt a positive thing, because it avoids the need for a double figure percentage dilution at either end Feb or end Apr next year (depending on which route ANGS would have taken).

PS BV yes, the markets will see this postponement of needing to pay off a fairly imminent big fat bill in shares (or the equal postponement of a need to do a placing in the short-term) as a good thing.

Both options would have resulted in a double figure dilution against current levels of shares in issue, so yes, this deferment is a positive thing.

Because if an outfit like Knowe expects they can double or treble their money in the short(-ish) term, that's exactly what they'd go for.

If Knowe expected the SP to get to say 2.5p by say mid next year, why wouldn't they agree to get given 140 million shares in April 2022 at 1.0p each? (Actually it might have been 155 million shares at 0.9p, depending on whether Knowe gave written consent to the 0.9p Sept 20 placing).

Bang on again, Nom. It is an extra 8% as you say on top of the contracted 4%...

...but having said that, very necessary from ANGS's point of view. The alternatives were either a placing to raise £1.4 million by Feb 20th next year (and issue a shedload of warrants), or a 12%+ dilution by the end of April next year, with 140 million new shares needing to be issued.

Given those other two alternatives, the extra 8% fee (or 1.125% dilution, if you look at it that way) is by far the least bad option out of those available.

Thanks BV. Although the ramptastic cheerleaders always try to paint anyone expressing a more realistic take on things as the Devil incarnate, I do try to be objective.

Yanis, obviously Knowe the noteholder would have had to agree to the change in terms - the extension, right?

So if it hadn't, one of two things would have happened.

a) ANGS would have had to raise enough cash to pay Knowe off before Feb 20th next year (which would have meant a placing for sure). Knowe would have been paid off its £1.4 million and would have got a load of warrants along with. Taking this option would have been entirely down to ANGS to choose.

or

b) Knowe would have been issued with 140 million shares at 1.0p on April 20th next year. Again, this would have been entirely ANGS's choice to make - but I think it is by far the most likely one (because I cannot imagine ANGS wanting to do any placing before first gas).

So, when presented with the above options (and particularly option b), or a 12 month extension for an extra £56k of interest and 11 odd million free shares, Knowe clearly decided that the latter was better for it.

You therefore have to ask yourself what realisable value Knowe ascribed to the 140 million shares it would have got under option b)?

Make sense?