all Investor Questions answered31 May 2022 07:28
https://www.angusenergy.co.uk/media/investor-questions/
Was the deal to acquire the remaining 49% of SFB dilutive or accretive for shareholders when you add in all the associated funding?
Thank you. Asked on 30 May 2022
It was massively accretive and not dilutive at all. We acquired the 49%, which by the October P90 valuation was worth c.£25 million, for £14 million. We won’t call it the deal of the century, but it is an outstandingly good deal, especially when you consider that the average forward gas price in that October 2021 CPR has almost doubled today.
It is difficult to do the sums easily, since our own market cap prior to the announcement was only £17.5m (at 1.28p) and barely reflected the October CPR valuation of our 51% interest let alone potential (and now at Brockham actual production) at the southern oil fields. A decent estimate of 100% of Saltfleetby (just on the lower October CPR) and, say, just £10m for the oil fields would yield a value around the £60m mark and give a price per fully diluted share of nearer 2.5p. With current prices, the sky is the limit.
Yes we nearly doubled the number of shares outstanding but, taking into account the price paid for the asset, we more than doubled the value of the company.
Also unlike past placings only a small fraction (4%) of this issuance wss to market participants who might trade out. The rest is either locked up or part of a strategic stake.
Finally the raising of the £6m cash – done to ensure the assent of regulators and lenders – puts the risk of further placings out of people’s minds. Retail should be able to work in this stock with confidence.
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