Member Info for HeadInTheSand

Fact check. ANGS is not producing 10 mmscf per day. Instead they've specifically stated that the B2 well is initially flowing at half that, but has not yet been "normalised" (ie its consistently achievable flow rate isn't known yet).

Sure, output from the second well hasn't been factored in yet either, so info on the overall consistently achievable output remains an unknown as yet.

@PeterA, sadly your numbers are a million therms out.

The total volume hedged in Year 1 (July 22 to June 23) according to the company's own released figures is (3 × 1.125 million) + (9 × 1.75 million) therms. The Oct 26 2021 CPR lists the details on p49.

That's 19.125 million therms needing to be produced in the next 10 months before ANGS has any gas to sell at open market pricing.

Not a problem at 7 mmscfd, but 6 mmscfd doesn't quite get there.

Sageman, I entirely echo your sentiments.

Tsk tsk PeterA. A bit naff to attempt to put words into my mouth that I have never once said, no?

First, I have never claimed that the field can produce 10 mmscfd without a sidetrack, because that would be utterly ludicrous. Based on yesterday's info, I reckon that if everything goes perfectly with a following wind, it might get to a consistent/"normalised" 6 mmscfd from the two existing wells.

So you don't confuse yourself again, 6 mmscfd equates to 1.8 million therms a month, so that level of production would (just) exceed the Q4 hedge, but would not meet the increased Q1 and Q2 hedges following the deferment.

Plus your revenue calcs are way out, even if ANGS were to produce 7 mmscfd (=2.1 million monthly therms) from Sept 1st. You do know that the hedge is in therms, right?

Finally, I've never said that the field would only produce 2.4 mmscfd. Feel free to check my post history. I did point out that according to NSTA figures, the average production out of the field during the most recent 12 months of its unimpeded production was around 4.63 mmscfd.

The claim made was that the first well was producing 10 million cubic initially by itself (and it categorically isn't).

Howey, you may be right, but then again ANGS's RNSed statement is literally crystal clear and thus just a tad tricky to misinterpret accidentally.

Regardless, the key figure to know is consistent/"normalised" flow from both existing wells combined.

Geez. Shouldn't people after so long try sticking to the facts? ANGS is finally in a better place than it has been for years.

Mazik claims: "With B2 producing 10 million cubic and A4 on it's way holding for mcap 100m."

Which is sadly complete BS, overstating/doubling what the company stated via RNS about well B2 only yesterday :-

ANGS RNSed:- "Well B2 has alone been delivering at an equivalent rate of 5 million standard cubic feet per day, surpassing the Company's internal expectations, although we expect deliverability to normalise with time."

So the initial flow rate from B2 is actually 5 million cubic, and not the 10 million cubic claimed.

There's no need to make stuff up. Just wait to see what the consistent and normalised flow is from both wells.

Adrian, with your long history of shamelessly ramping AIM O&G companies, you of all people should know that initial flow rates diminish quickly to consistent levels and should not be considered as indicative. Well, you should, if facts had ever been of the slightest importance to you.

Sensible people with some clue as to what they're talking about will be keenly waiting to hear what the consistent combined flow rate of the two wells actually is - and I'd reckon 6 mmscfd isn't a bad guess. Anyhow, once that's known, the maths is easy.

PeterA, I think you've confused mmscfd with million therms a month.

6 mmscfd = 1.8 million therms a month, or 5.4 million therms a quarter, or 10.8 million therms a half.

That'd be less than the Q1 and Q2 hedge, presuming just one month deferment of 1.125 million therms. (The Q1/Q2 total hedge would then be 5.25 + 5.25 + 1.125 millon therms = 11.625 million therms). There would be no excess.

Howey, I won't argue with maths (unsurprisingly).

If ANGS can get say 1.8 million therms (6 mmscfd) consistently out per month, then at a squeak, the sidetrack if successful would just about be be all bunce.

It'd still be tough from a drain on working capital point of view until Q3 next year, because the first two quarters have hedged volumes of at least 5.8 million therms, following deferment, but it would be clear water after that.

As I'll bet you've heard me say just once or twice, it remains all about "how much gas?" (George seems to have FINALLY answered the "...and by when?" part of that question). You'll appreciate that knowing consistently achievable flow rates from the two existing wells (and that will fall back after an initial spike) is absolutely key. So break out the prosecco maybe, but not the Kristal just yet.

Nevertheless, as I've already said, today's the first piece of good news from ANGS in literally years and I am genuinely pleased for genuine long-suffering and long-term holders here, in which group I include you and a few others. However, I really couldn't give a rat's behind about the ramptastic kindergarten short-term trader squad.

No gritted teeth here in the least. Evidence based opinion as usual.

As stated countless times, the key here isn't getting to production - it's what the consistent production levels will be (as anyone who has ever looked into any AIM oiler will know, initial flow rates aren't much of an indication of anything).

However, ANGS has two producing wells to flow from - so let's see what the two wells manage to deliver once flow rates from both have stabilised.

The most potentially significant thing about today's RNS is the (okay heavily caveatted) info that they're getting 5 mmscfd out of one well.

Now sure, that flow needs to stabilise and will drop relatively sharply, but then there's the flow from the remaining well to incorporate into the overall flow (which will also drop from initial flow rates once stabilised, but still should be incremental).

It's an encouraging start, without a doubt. But - as the rational will agree - it's all about sustainable consistent production rates. That's the number that needs to be known above all else. If the combined total production rate of the two existing wells stabilises at say a consistent 6 mmscfd/1.8 million therms a month, ANGS should be fine.

However, although not out of the woods, the best day for ANGS in a long time.

ANGS will presumably get gas out of Saltfleetby at some point (even with the executive dream team's staggering incompetence and at best wildly over-optimistic untruths, it is unthinkable that they won't).

The burning question remains... how much gas? Because that really REALLY matters.

My intention is not to "diss" ANGS. Instead I simply point out the facts of the situation into which the company has put itself.

Now, those facts do not in any way support the invariably rosy "guaranteed multi-bagger tomorrow!" myths continually perpetrated by the heavenly choir for various reasons, but that's hardly my fault.

Am I personally irritated by ANGS? Yes, somewhat - mostly because they're still not producing gas, despite repeated assurances to the contrary.

I also object to the fact (yes, again an indisputable and immediately verifiable fact) that, either through staggering incompetence or a deliberate desire to mislead (decide for yourself), literally every pronouncement, projection or assurance that the company has issued via any media (including via RNS) has turned out to be utterly untrue.

The sole "advantage" ANGS gained by deferring part of the current quarter's hedge (which it simply had to, due to zero production to date) is that it moved a payment it didn't have enough money to make from July into Q1 and Q2 next year.

Of course the downsides in doing this - which sure, was 100% necessary for the company - is that this moved payment will now cost the company at least £3+ million more in the first half of next year and the hedged volumes have been increased for the first half of next year.

So at best, ANGS managed to avoid a short-term bullet - in exchange for a much larger calibre one being fired a few months later.

For the record, I have never said that ANGS is inevitably "doomed". It simply needs to very soon produce enough gas to generate enough revenue to meet its several already enshrined sizeable financial obligations.

It's making things much more difficult and risky for itself by its ongoing failure to date to produce anything at all. This has meant that the overall hedged volume is having to be concertina-ed into an ever-shortening period, a thing which unavoidably increases the required future monthly production output. Gas pricing that's continuing to rise significantly and obviously increases the financial burden attached to a failure to produce enough gas to meet the hedges.

Has the heavenly choir now accepted that despite repeated assurances to the contrary, August is now also a write-off in terms of getting any gas out, just like July was?

Howey, a few things.

1. George's most optimistic projection ever issued on production from the 2 existing wells is 5 million therms a quarter - those are his words. That doesn't meet the Q4 hedge (5.25 million therms), nor the Q1 or Q2 hedges, which are now presumably at least 5.8 million therms each, following the July deferment (and presumably,some or all of the August hedge will also have to be shunted in there). So the crucial need for the sidetrack is based on George's own latest publicly stated predictions..

2. The July hedge was 1.125 million therms. The swap contract differential on that volume was c. 250p per therm, so without getting a deferment, ANGS would have had to find £2.8 million to pay Mercuria at the end of July. It didn't have that, so George had to get Mercuria to agree.

3. Mercuria will have been happy to agree, because as stated, it means that, rather than getting £2.8 million in July, they'll now get an extra c. £6 million in H1 next year (or more if some or all of Aug 22 has to get deferred as well).

4. The only RNS that would change things in the short term would be one confirming that production has started and it is consistently delivering a minimum of say 1.8 million monthly therms from the two existing wells.

@Howey, a denial will be an utter waste of time as I am sure you are aware. It's just the latest and desperate ad hominem attempt to discredit from the ramptastic crew, following on from my allegedly being a paid-up member of the KGB and/or an Extinction Rebellion activist and/or an eco-journalist.

I am of course none of the above, nor do I have a Twitter account, nor any other ID on LSE. I do post on one other share discussion BB under the ever so cunningly disguised name of HeadInTheSand.

Cue the mudslinging from the pass the parcel bomb ramptastic squad. It's all they've got to counter factually evidenced opinion.

PS surely you cannot agree with Gideons/Lemonleaf's utter nonsense that the forced hedge deferment, what with its inherent massively increased xosts and risks to the company, was some sort of masterstroke?

No chance of that 360Phil. They breed them as dishonest as stupid in Salfords.

As anyone doing the barest modicum of research knows, being forced through a total lack of production to beg Mercuria to allow deferment of some of the current quarter's hedge will cost ANGS millions more in the first half of next year.

ANGS attempt to present this as some sort of positive is absolutely typical of the company's ongoing disingenuousness. Sure, being forced by its incompetence into this deferral attracts no upfront cost... but it will cost the company an additional c £4 million at least in the first half of next year.

Of course, Mercuria will have been all too delighted to agree. It gets a fair number of extra millions guaranteed - and has first title on the gas field as surety. Easy money.

Lemonleaf aka Gideons aka Adrian - the ID who always tells the truth. Remember his guarantee of full production by the end of March?

Anyhow...let's have a look at the latest lie from Mr Multi-ID:-

" Lucan has turned the hedge around to his and Angus advantage."

That's a laughably bare-faced lie. No he absolutely hasn't. Due to an abject and continuing failure to produce even a whiff of gas, he's had to beg to defer a good chunk of the current Q3 hedge into early next year - which will not only cost the company a fair few extra million pounds to be paid to Mercuria because of the even higher gas pricing in Q1 and Q2, but also increases the hedged volumes in Q1 and Q2 to way beyond any forecasted production without a sidetrack, and thus increasing ANGS's risk massively.

So... whacking up the risk and costing the company 350p per therm more on at least 1.125 million therms (and more than just July 22's hedged volume needs to be deferred now, so more therms will need to be deferred).

Yes, superb stewardship from George and his executive dream team. ANGS is now pretty much guaranteed to go pop without a sidetrack that significantly enhances production levels, because they'll run out of cash to meet their numerous obligations.

Just the usual wild accusations from the ramptastic squad.

They have no answer to clearly laid out and evidence-based opinion, so have to to their level best to discredit the poster - and this latest flurry of nonsense shows their increasing desperation in my view.

Feel free to continue to do your best to smokescreen the very obvious point... ANGS is going to be unable to meet its already contracted and very significant financial obligations, if it doesn't drill a successful sidetrack.