mountain out of a molehill, imho19 Dec 2022 14:32
The Company is undertaking the Fundraising to progress its strategy and the net proceeds will therefore be applied towards:
- Hedge expenditure: GBP3.3 million. As part of the Company's rolling hedge programme relating to gas sales from Saltfleetby, and due to the late start of production from Saltfleetby, some of the original hedged volumes due in Q3 2022 were closed and new hedges of an equivalent amount, but at much higher prices, were restruck in H1 2023. Whilst the Company had been seeking to defer this liability to include it within H1 2023's commitments and has been in discussions with the hedge providers to that end, it has now been unable to agree this. As such these funds are expected to satisfy the majority (if not all) of the earlier closed hedges.
- Saltfleetby side track overruns: overruns of GBP0.9 million have been incurred. These relate principally to much higher steel and energy prices, but general inflation and scarcity of manpower and materials have contributed. Additionally, there have been time overruns associated with the initial and final stages of the drilling programme.
- Saltfleetby Facilities overspend: an overspend of GBP0.75 million has arisen due to the costs of modifications made to the plant to optimise production as well as noise attenuation and compliance with the highest regulatory standards as regards minimizing risks to people, plant and the environment.
- Geothermal spend: GBP0.5 million is targeted for 2023 on the acquisition and origination of new further gravimetric data, and toward a seismic programme, in the south west of England.
- Business Development of approximately GBP1.0 million are slated for 2023 with a focus on expanding production and developing the Saltfleetby Gas field as a storage facility
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£3.3m re the hedge, which had to be paid at some stage whatever happens;
£1.65m of overruns and overspends;
£1.5m for development including £0.5m for geothermal;
makes £6.45m.
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