Someone - and I think it was the clueless fantasist RT003 - said earlier today that some here believe that the lenders actually want ANGS to go pop, so they can get their hands on the asset.
This isn't true. At worst, the lenders don't care either way - they're sitting absolutely pretty, knowing that the c £14 million they're owed (loan plus interest at 12%+) is completely secure, because the gas field has been put up as surety. So they've got no risk.
Similarly Mercuria, which as well as being the primary lender is also the party sat on the other side of the hedge, knows that the sum it'll be owed on the 36 month hedge - which now looks like well north of £100 million - is also assured for the very same reason.
So, neither party will care very much either way - they (and especially Mercuria) are in a win-win situation, no matter what.
The only downside to ANGS going pop would be that the lenders would presumably then lose the benefit of the ongoing 8% revenue over-ride that they'd get to trouser once the majority of the loan is paid off.
However on balance, I don't suspect that Mercuria, by far the major player, cares either way.
Well, that's just the best news for Mercuria, regardless of what happens.... but really bad news for ANGS, unless it manages to produce more than the quantities it has hedged.
It doesn't look like it'll manage to do that in Q3 (because it's missed a full month of production) and it also doesn't look like it'll manage to do that in the next three quarters either without a successful and production increasing sidetrack (because the volumes hedged rise to over 5 million therms a quarter).
As the more rational here have said, "first gas" is priced in - there's obviously gas to be produced out of Saltfleetby and no sane person would doubt this.
What's not priced in as of yet is the achievable production volume per month. If it's less than the hedged volumes, the SP will spiral down. If it's meaningfully more, the SP should sharply rise. (And obviously the success of the planned sidetrack - which is currently conspicuous by the entire absence of news about it - plays into that).
Similarly causing a negative effect on the SP is the passage of time with nothing continuing to happen. As has been mentioned before by several, the longer the delays, the greater the impact on ANGS's available working capital - and the market clearly knows this.
Get a move on, George... you must know (because everyone else does) that - as long forecast by those who bothered to do their own research - you're down at the sharp end now and have literally no wiggle room left.
Gas prices seem to be set to stay elevated (as far as anyone can tell what with the current geopolitical situation).
But that's actually kind of a side point at the moment. ANGS desperately needs to start generating enough working capital through gross profits from selling sufficient quantities of produced gas to be able to meet the sizeable obligations it has tied into the field. And there's an ever-shortening time limit by which it simply must do this.
Again, this isn't (and has never been) about the value of the field in and of itself, merely about what it is worth to ANGS, given the time/cash constraints.
I frankly despise the tactics employed by certain short-term traders (buy in, claim to be genuinely here for the long haul, amp the bejaysus out of the share will all sorts of false promises, fake news and unjustified "guarantees" of multi-bags beign just around the corner, plus doing everything they can to discredit and insult those who are more objective and thus more wary, then sell out ).
Having said that, it remains very obviously true that like so many other AIM companies trading on the promises of jam tomorrow, ANGS has always been and to this day still is a short-term trader's dream stock.
Well to be completely accurate, ANGS would receive 41.4p per therm (in this current quarter) for the first 3.375 million therms it produces (in this current quarter).
So sure, if it manages to exactly meet the hedged production in Q3, ANGS would generate just under £1.4 million of revenue (not profit). I doubt that this would be enough to "make money".
Separately, ANGS will now only meet the Q3 hedge if George's very recently increased production forecast of 5 million therms a quarter turns out to be true. I personally have my doubts - people may remember that he all of a sudden announced that projected increase in the same recent RNS announcing further delays - so it was certainly convenient... anyhow.
George now claims 1.67 million therms a month. Therefore very basic maths shows that full production at that rate must start before Aug 1st in order to hit the 3.375 million therms that have been hedged for this quarter - and that's now 4 days away.
Separately, even full production of 1.67 million therms a month will not meet either the Q3 2022, the Q1 2023 or the Q2 2023 hedged quantities - which is why the more objective here have been wondering what on earth is going on with the sidetrack (spud date of July 21st targeted as mentioned in the 10th June RNS - and of course missed, with radio silence ever since).
Looking at the massive drains on working capital being caused by the seemingly ever-ongoing delays, there really is no room for any further of those.
Well actually.... as today's spot price for natural gas is a literal whisker under 400p, what ANGS actually owes Mercuria for July alone is now likely to be far closer to £4 million.
Fixed volume of gas hedged x (current spot gas price - fixed hedged gas price) = what's owed on the monthly swap contract differential.
So as of today... 1,125,000 therms x (399.99p - 41.4p) = £4.034 million.
SL, I don't think that either I or Mirasol have changed our stance on anything at all - you're just bothering to take the time to read the content posted and not go for the facile knee-jerk "Putin-loving green activist swampy!" reaction favoured by the intellectually bereft short-term crew.
SilverLight, obviously if the sidetrack is drilled, and if it's successful and if it doubles monthly production levels, then yes, I could see an SP around the 6-7p level. Sure, those are some pretty big ifs, but that's never really been in dispute.
To me, this remains a red or black bet. Given all its financial obligations, all of which have kicked in by now, has ANGS got the time and cash a) to attempt that sidetrack drill and b) see if it will achieve what they hope? They seriously need to get a move on, because there is by now not one scrap of wiggle room or slack left.
01012, GL's continual problem is not that he keeps shareholders in the loop, but that he keeps making promises and assurances which he then promptly breaks.
He has shown himself to be the past-master of over-promising and under-delivering, to the entire destruction of any credibility the company may have had.
You'd have thought by now that he would have learned his lesson a long LONG while back - but as the most recent RNSed updates continue to demonstrate, he clearly hasn't.
As anyone with even a basic grasp of business should have worked out, now that all the various obligations tied into the field and against which it has been put up as surety have kicked in (hedge, loan plus interest repayment, remaining acquistion payment etc), the single biggest problem for ANGS is... working capital.
With today's spot gas pricing, it is going to owe Mercuria in excess of £4 million on the hedge for the month of July alone, which will need paying.
And before anyone starts brandishing the last £6 million megaplacing as some sort of proof that the company is awash with free cash, as ANGS itself publicly stated, of that total of £6 million, only £2 million was available as working capital.
£0.25 million was used to pay Forum the initial cash consideration for the 49% acquisition.
£0.75 million is being used to cover off yet more budgetary overspend on trying to get Saltfleetby to first gas.
£2.5 million has to be used to satisfy both the lenders and the regulatory authorities (i.e. for maintaining a sufficient positive bank balance)
£0.5 million got spent on legal and other fees regarding the acquisition transaction and placing.
That leaves just £2 million... and Mercuria is owed £4 million for July alone... George seriously needs to start producing and selling lots of gas immediately.
The problem for the heavenly ramptastic choir with their permanent rose-tinteds is that it's in fact the company itself which continually supplies all the evidence to support a more negative view by keeping missing its self-set cost estimates and time deadlines.
How much gas and by when, George? And while we're about it, what's happened with the literally crucial sidetrack attempt? Just a few weeks back, you promised a spud date for that of July 21st, so six days ago... and as per usual that date has been missed and there's been radio silence ever since.
Baits is asking for a reason as to why more objective posters here express more wary opinions about ANGS...
Perhaps - just perhaps, mind you - look at the last three years of history what with the many and varied statements, projections, promises and assurances the company has made over that period... and then compare those against what the company has actually achieved and delivered on over that same period.
So the implication is that a "genuine investor":-
1) solely shouts the company's praises,
2) utterly ignores any evidence that reflects less than positively on the company,
3) does his level best to hijack and control the narrative by seeking to get those expressing counter-opinions banned
4) heaps facile ad hominem based insult on anyone with a differing viewpoint,
5) looks to propagate the fairytale that there are only one or two people actually posting a more wary viewpoint, who are members of some green action group using multiple ids...
Given the above, perhaps you should look up the meaning of the word "genuine":-
"not counterfeit; authentic; real: free from pretence, affectation, or hypocrisy; sincere:"
"We have drilling experts
Pipe sizing experts"
...what a shame that, looking at snail's pace progress and broken promise after broken promise, ANGS apparently doesn't have any. of the above.
So.... some poster makes an utterly unsubstantiated claim that I and everyoneelse "knows that production from the two existing wells will cover the hedge and then some"...
I then point out that I know nothing of the sort and that in fact the ANGS CEO's own very recent publicly stated projections directly contradict this claim, meaning that, if George is to be believed, this claim simply cannot be true - and I quote those public statements and explain why...
...and Max promptly has a hissyfit? How odd.
Separately, I note that the Filipino fantasist is still desperately peddling the myth that anyone expressing a purely evidence-based more wary view on ANGS is apparently one single aged female green activist or something. Presumably, since he cannot refute the evidence provided for less than positive opinions, this is the only option that RT003 has in his fervent desire to discredit views running counter to his fanboi own.
Well Baits, rthat's a complete fairytale.
Even George doesn't "know" that the hedge "will be covered and then some" by the two existing wells. In fact, he has effectively said that it won't be.
He's very recently on record as predicting 5 million therms a quarter from the two existing wells. Even if achieved, that's not enough to cover the Q3 2022, Q4 2022 and Q1 2023 hedged volumes.
And as for the current quarter? At that predicted production rate, unless full production starts before the end of this month, ANGS will not produce enough gas in the two remaining months to cover the Q3 2022 hedge either.
Mercuria's not bothered though - they're contractually due tens of millions of pounds, regardless of how much or how little gas ANGS produces.
£6 million in cash, says Silverlight... well, that was gross and not nett receipts from the recent megaplacing, but let's not be churlish.
ANGS has contractually tied a number of obligations to Saltfleetby's future revenues over the next 36 months, including:-
The hedge (at current gas futures pricing that's guaranteed to provide Mercuria with well over £90 million over the next three years)
Capital plus interest repayments on the £12 million loan that needs to be paid off in full by June 2025. £1.2 million a quarter from this September?
£6.25 million to Forum as the balance of the acquisition of its 49% share.
And that's without allowing anything for field opex costs or funding the sidetrack attempt (what has happened with that? No news since George missed his projected spud date?) or paying back the Knowe £1.4 million CLN. And then there's the contractual obligation to maintain a positive bank balance of one quarter's worth of loan repayments at all times.
They'd better start producing lots of gas very soon, or that £6 million raised will get entirely used up pretty rapidly.