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The Trussbot is desperately trying to blame the aftereffects of Covid and also Putin's Ukraine land grab for the UK's parlous economic situation. Yes, of course these are significant global factors... but she completely ignores the auditable fact that world markets only started flushing sterling down the toilet from the point that Kalamiti Kwarteng started speaking last Friday.

A total and utter own goal - and one that a) will cost almost all of us extra thousands of pounds a year and b) puts Starmer (and far worse, Rayner) in number ten in 2 years' time. Sheer genius.

The Trussbot is set to go down as the most incompetent PM in living memory. Impressive, given she's only been in the job for less than a month AND couldn't actually do anything for the first two weeks because of the Queen's passing.

Off topic perhaps, but the last 7 days of utter cackhanded incompetence from the Trussbot has been both jawdropping and depressingly unsurprising. She literally hasn't got a clue what she's done or is doing and is looking more and more like a clueless rabbit in the headlights when asked any questions about the catastrophic minibudget.

Honestly, what did she and cretinous Kwarteng expect? An entirely unnecessary surprise abolition of the 45% top rate of tax was appalling enough in terms of optics... but deliberately failing to give the OBR the opportunity to analyse the rationality and affordability of the minibudget? That was disastrous... no wonder that world markets acted in disbelief and that the Bank of England has to spend £65 billion trying to shore up faith in the UK economy.

What an absolute gift to Keir and the Labour Party - currently somewhere between 17 and 33% ahead according to 3 very recent opinion polls. Keir is banging on about "a fairer, greener country"... and sadly, the Trussbot has pretty much ensured that the previously unelectable Labour will in fact be elected in 2 years' time.

The Tories are meant to be the party of aspiration and property ownership... well, the Trussbot has just crucified her core voting base with the massive mortgage interest rate hikes her lunatic policies have directly caused. Well done, Liz...

A boss of mine once astutely said: "Don't just blame the ****... blame the ****s who put them there". Too true... the Tory faithful who voted for the Trussbot over Rishi (was racism a factor, I wonder?) should hang their heads in shame.

#RishiWasRight

Of course it's true that, if ANGS manages to achieve flow rates of 10 mmscf/day, it would cover all its obligations and also make a whole heap of profits. That's never once been in question - but the outlook if flow rates are only 5 or 5.5 mmscf/day is hugely different.

So, the sole thing that remains in question (as ever) is... how much gas and from when?

DRB, sadly as longer-term ANGS watchers know very well, George has a long and unblemished track record of what could be termed at best wild over-optimism.

Re actually delivering a profit, as I pointed out to Howey earlier today, over the next 34 months, ANGS is committed to pay nigh on £22 million out in various financing and acquisition related costs.

And that's completely separate to and over and above any field opex costs, or squaring the differentials on the hedge contracts, or funding one-offs like the sidetrack.

All good if they're producing substantially more than the hedged volumes, but not so good if they're just meeting those or worse, underachieving against them.

Howey, first off, you won't see me ripping you and the fact that you've (at last) done some calcs to pieces. After all, knowledge is power - and actually trying to work out financial outcomes is only rational and what any halfway serious investor or potential investor should do. It also helps put the endless shrieking of "Absolute goldmine!" "10p by Xmas!" etc etc from the blinkered optimists and the short-term traders into clear perspective.

Hopefully you didn't work out your figures in pencil on the back of a fag packet in a Moretti-inspired haze and instead popped them into a spreadsheet, making them ever so asy to tweak on a "what if?" basis....

Looking at your calcs as presented, I'd draw your attention to the following:-

First, ANGS's insistence that 1 mmscf = 10.872.5 therms. I suggest you research the likely validity of this. As I stated to Yanis yesterday, I've not found one online resource that supports that mmscf to therm conversion metric - but at least half a dozen reputable websites which state that 1 mmscf = 10,282 therms. That's worth bearign in mind - and I am sure that I don't need to remind you that blindly relying on "Because ANGS/George said so!" hasn't proven to be the best course of belief in the past. That's a significant difference.

Secondly, the Q1/Q2 2023 hedge indeed used to be 1.75 million therms a month. However, following deferment, 2.25 million therms of hedged gas has been added into this period, making the average monthly volume now required 2.125 million therms during that particular timeframe.

Finally to the 17p of cost. I also have seen that figure bandied about before - and it solely represents the per therm opex cost of getting the gas out. What you also need to bear in mind is that over the next three years, ANGS is committed to paying out the following:-

c. £14 million on the l£12 million loan inc interest
£6.25 million in cash to FESL to pay off the 49% acquisition
£1.4 million to Knowe against the CLN.

So that's nigh on £22 million that needs to be found and paid within the next 34 months, completely irrelevant of and separate to the hedge (and completely additional to the 17p per therm opex cost).. You might wish to factor that in - and it's possibly also worth considering even at this early stage the import of the extra "8% revenue override" due to the lenders once the majority of the loan has paid off..

Just food for thought. Take on board or ignore at your choice.

Howey, you should know me better.

The first year's hedge totals 19.125 million therms. The second 18 million therms and the third 15 million therms. That's 52.125 million therms over 34 months of production (including this month), so 5 mmscf average would meet these quantities over the whole life of the hedge.

What was being claimed by several earlier was that a consistent flow rate of 5 mmscf would meet and exceed the hedge in the short term (it really absolutely wouldn't) and that 5 mmscf would make ANGS revenue positive from now on in (it really absolutely wouldn't - certainly not in year one, barely in year two, but year three would be more than comfortable).

This is about achievable flow rates vs demands on cash - which it pretty much always has been. Over the next 2 years and 10 months, ANGS needs to produce enough gas to sell to cover the hedge differentials, staged loan capital plus interest repayments (c. £14 million), one-off Knowe CLN repayment (£1.4 million) and staged FESL acquisition payments (£6.25 million), plus of course field opex costs and one-off costs (eg the sidetrack attempt). At current reported flow rates, that's going to be impossible in year one, barely possible in year two, but fine in year three.

Therefore ANGS either needs increased flow rates (2nd compressor possibly? Successful sidetrack maybe?), or enough spare cash to make up year one shortfalls (it hasn't got this at the moment), or a relaxation of repayment terms from its various creditors.

It's not rocket science.

Yanis, no industry conversion site I've been able to find on the web comes up with ANGS's chosen number - and I have by now checked half a dozen reputable ones. All state that 1 mmscf = 10,280 therms, plus or minus 5 therms. ANGS's figure of 10,872.5 is an outlier all by itself and so has to be considered as suspect (especially as it's merely part of a hand-typed spreadsheet, rather than an accepted industry website).

Even so, and even using ANGS's own weird-looking conversion number, 5.4 mmscf (which ANGS hasn't yet reached) would not meet the increased Jan-Jun hedged volumes.

With respect, I think you might need to re-look at your numbers. Just yesterday you posted that "5 MMSCFD covers full hedge commitments" (it really doesn't, volumetrically speaking). You also claimed that with gas futures at 200p, ANGS would be revenue-positive... but the average forward gas price between now and end Jun isn't 200p. It's 476p - which means that ANGS owes Mercuria 19.125 million x 430p on the hedge between now and end Jun 2023. That's about £82.25 million - and at those prices, just to generate that level of cash (forgetting making any money to cover off opex or debt repayment), ANGS needs to produce a total of 17.3 million therms from production start to end Jun next year.

Yanis, even if I use that 10,872.5 figure on the CPR (which for info does not match any therm to mmscf conversion figure on any of the industry websites available and so looks just plain wrong, but hey ho), a flow rate of 0.141 mscm (which equals 5.07 mmscf) still will not meet the Oct-Dec monthly hedged volumes, let alone the increased Jan-Jun hedges.

As for that number in the hand-typed spreadsheet on p49? I suspect a typo. 10,278 or 10,287 would be pretty much bang on.

Check any number of gas industry websites - they all give the same conversion figure to within 0.05%. 1 mmscf = 10,282 therms, give or take 5 therms.

A small point. A consistent flow rate of 0.141 mscm delivers just over 1.56 million therms a month (presuming a 30 day month). It's equal to 5.07 mmscf.

If achieved for all 30 days, that would meet (and exceed) the September hedge, but it would not meet any of Oct-Dec's hedged volumes (1.75 million therms per month), nor especially any of the the monthly hedged quantities between Jan-Jun 2023 (which also started off at 1.75 million therms a month, before being increased, courtesy of the two month deferment).

Check it for yourselves at https://www.convert-me.com/en/convert/energy/mcmsgas/mcmsgas-to-therm.html

Gallder, except it wasn't payments due on July and August's hedged volumes that got deferred... it was those 2 months of hedged volumes themselves (totalling 2.25 million therms) that got deferred into months with a much higher spot gas price. Which is no doubt why Mercuria were prepared to agree... allowing this is set to make them several extra million quid.

By my calcs, 5.5 mmscf/day isn't quite enough to meet the original Q4 hedged volumes, though it's close.

However, what cannot be denied in any event is that Angs has 10 months from Sep 1st to produce the 19.125 million therms hedged total by Jun 30th next year. And a production rate of 5.5 mmscf/day (which it hasn't yet achieved and September is 2/3rds over) is simply not enough to meet this.

DRB you're not going wrong anywhere. It's very basic arithmetic (it's not even maths).

Unfortunately, the heavenly choir are violently allergic to cold hard facts and inconvenient truths. They of course cannot counter these, so expect the usual tirade of playground insult - in time-honoured ramptastic fashion, they'll do all that they can to discredit and/or drown out any poster that prefers to deal in very easily verifiable facts, rather than singing off their preferred pie in the sky hymn sheet.

Don't you just love AIM?

Noel, the important thing is that - as you and I both agree - 5.5 mmscf/day = 1.7 million therms a month, give or take 1%.

Maybe that flow rate will soon be consistently reached? Maybe it will be naturally exceeded? Maybe a second compressor being brought online will allow a meaningfully higher rate of production? Maybe the sidetrack attempt will be successful, whenever it's made?

All that's up in the air. However, as I know you already know, because you've got an excellent handle on the numbers, the fact remains that unless ANGS reaches well above the currently targeted consistent flow rate of 5.5 mmscf (which it's not yet once reached and September's 2/3rds over), it won't be capable of producing the 19.125 million therms needed by end June 2023 to meet the first 12 months of hedge.

Yanis/Noel.

5.5 mmscf/day equals 56,553 therms a day. Check any converting website to see this shown. This gives as near as dammit 1.7 million therms a month (less on a 30 day month and more on a 31 day month). Noel, your 1.711 million therms a month figure matches this pretty much exactly and so I agree.

The first 12 months of hedge totals 19.125 million therms - just add up the numbers on the much-quoted 26/10/21 CPR.

Following two months of missed production and subsequent deferment, ANGS has 10 months in which to produce this quantity in order to meet the 12 month hedge (presuming it started at full rate on Sep 1st, which it didn't, but let's pretend it did).

At 5.5 mmscf/day (which equals 1.7 million therms of production a month), ANGS is clearly going to produce 17 million therms by end June 2023, so fall short of the hedged volumes by 2.125 million therms.

What does that mean financially? Well the average forward gas price up to and including Jun 23 is 496p per therm. ANGS's average hedged price over the same period is 46p per therm.

So ANGS will sell the 17 million therms produced at 496p per therm, equalling £84.32 million. It will then need to pay Mercuria the 450p hedge differential (496p - 46p) on the 19.125 million therms hedged, equalling £86.06 million.... so that'd deliver a negative revenue over the period of of £1.74 million.

Basic arithmetic. At current gas pricing and only producing at 5.5 mmscf/day, ANGS is set to make negative revenue on gas sales out of Saltfleetby in the period to end Jun 2023.

It needs to achieve production levels higher than 5.5 mmscf/day (either via 2nd compressor or via successful sidetrack) if it is to avoid this.

Yanis, for starters, visit either https://www.easycalculation.com/unit-conversion/mcf-therms-conversion.php or https://www.convert-me.com/en/convert/energy/therm/therm-to-mscfgas.html. 5.5 mmmscf/day = 56,553 therms a day, or 1.696 million therms a month (for a 30 day month).

Secondly, you seem to be confusing nett profit with gross revenue. Sure, if ANGS gets close to hitting the volume it has committed to in any monthly hedge, then gross revenue would still be positive. But one has to factor not only field opex and general G&A, but also the several significant financial obligations ANGS has taken on (the £12 million loan plus interest and the staged acquisition payments to FESL, to name just two).

Furthermore, the fact remains that, in order to meet the 19.125 million therms hedged in the first year (ending Jun 23) in just 10 months (including this one), ANGS has to produce over 1.9 million therms a month every month. That's 63,750 therms a day, or a consistent flow rate of 6.2 mmscf/day.

Maybe a second compressor might get production up to at least that level, or a successful sidetrack? However, 5.5 mmscf/day is categorically not enough.

Secret_Landlord, the problem with simple maths is that it cannot be disputed.

Feel free to point out one single inaccuracy in my post.

5.5 mmscf/day = 1.696 million therms a month. Try www.convert-me.com

The monthly hedged quantities for Oct 22 through to Jun 23 are 1.75 million therms a month. As per ANGS's own CPR valuation report.

The first year's hedge totals 19.125 million therms. Again as per ANGS's own CPR valuation report.

ANGS has ten months in which to deliver that, following two months of missed production and deferment. As per ANGS's own RNSes, particularly Jul 29th this year.

Just to state a few cold hard mathematical facts.

A flow rate of 5.5 mscf would give just under 1.7 million therms a month.

The hedged volumes from Oct 22 to Jun 23 are 1.75 million therms a month.

The overall hedged volumes from Jul 22 to Jun 23 are 19.125 million therms and having not produced anything in Jul and Aug 22 and so deferring these quantities into Q1 and Q2 2023, ANGS clearly has ten months in which to deliver those 19.125 million therms in order to meet the first year's hedge.

At 5.5 mmscf/day, there simply won't be any excess gas to sell at market rates. In fact, the flow rates will need to be higher than 5.5 mmscf/day in order to meet the first year's hedge - presumably either by being boosted by a second compressor or by a successfully drilled sidetrack.

Another intellectually incisive argument from you again, BV. Don't you ever get tired of playground insult?

Doubling down on your stupidity, I see... again, it was George that said "we".

BV, as I was verbatim quoting George's Zak Mir interview (hence the time stamp info and the quotation marks which were just a teensy clue), the "we" is ANGS itself. It's what George said.

Again, you'd look less crushingly dumb if you actually read things, rather than instantly kneejerking and seething.

Actually, George said that it would be a successful sidetrack together with the second compressor which would hopefully deliver an extra 1.5 million therms

Timestamp 2:26

"We still have the other half of production, once we've got this sidetrack and second compressor online, to enjoy - and to give you an idea of that, that would be a little under 1.5 million therms, so another 5 million standard cubic feet very approximately"

So... according to George, they're currently achieving "max rates which are very close to our target, which is about 5.2 to 5.5 million scuffs a day"with decreasing trips being caused, but the sidetrack plus second compressor is still needed if the hedge is to be met and exceeded.

BV, your facile definition of a "well-known disruptive troll" is basically "anyone who refuses to sing along with your heavenly choir".

As I have continually said, it is solely about how much gas ANGS can consistently get out of SFBY, set against the backdrop of the several liabilities that it has contractually tied into. To pretend that this is not the case is to be ridiculous.

Given said enshrined obligations, IMV the SP will do very well if flow rates turn out to be a consistent 6.5 mmscf/day or higher. The SP won't do well if flow rates turn out to be a consistent 5.5 mmscf/day or lower. It's literally no more complex than that.