GOOD MALCY BLOG - POSITIVE MENTION! BUY3 Dec 2019 11:59
Angus Energy
I noticed yesterday that Angus announced that the OGA had given its consent to the assignment of a 51% share in Saltfleetby Energy Limited’s interest in the Saltfleetby Field to Angus Energy who will also be exploration and production operator of the block.
It seems that a lot of the key work to reconnect the field is already underway such as reconnecting to the Theddlethorpe grid entry point, and coordinating long lead items. Angus has also hired Oilfield International to produce a CPR, hopefully available in Q1 2020 and is also in discussions with an oil major for a ‘multi-year annual off-take arrangement which is expected to be between 17-19m therms based on last known and reported production rates.
This is beginning to look like a potentially very interesting deal for Angus, paid $2.5m to take on the stake it seems to me that downside is very limited but potential upside is still substantial, after all if for any reason flow is difficult or uneconomic Angus has been given the money to cover the abandonment liability. (Two of the existing 8 wells will be subject to abandonment to reduce overall liability) The field has been built and kept in immaculate condition and if Oilfield International’s upcoming CPR suggests maybe 10-18 BCF on site then the upside is huge just by working the field over.
Angus admit in yesterday’s RNS that there are still quite ‘ a few hoops’ still to get over, not least OGA approval of the company’s FDP and planning approval for the change in setup of the site but I for one think that this one could be worth keeping an eye on.