Member Info for ocelot

You mentioned in a recent interview that prolonged gas prices of 15 pence per therm would, if representative of global gas prices, leave all the Majors (Exxon, BP, Shell, Total etc) “bust” and only a few sovereign producers solvent. Board posters continue to mislead investors implying that it is reasonable to forecast on the basis of these exceptionally low prices and that the Majors are somehow insulated from these prices by huge cash surpluses?



ANSWER

These posters are ill-informed or deliberately misleading other investors. We will clarify our view immediately:

Almost no significant independent gas producer will make cash profit from pure gas fields at 15 pence per therm. Nor are the independent Major producers immune to prolonged price downturns: each of them have net debt levels (debt after deducting cash resources) of between $35 and $100 billion dollars and average abandonment liabilities of between $15 – $30 billion. No-one is worried because these prices are unsustainably low and none of these companies or their auditors, would use these low prices for forecasting or asset valuation. See notes to their accounts.

In June, Fitch ratings, an independent agency tasked with giving a credit rating to the Majors’ traded bonds, estimated a gas price of $3.75/kcf for 2021 (1 kcf = c. 1 MMBTU = 10.15 therms) rising to $5 for 2022 and $5.5 thereafter – that is roughly 30p, 39p and 43p respectively. Our original presentation in summer 2019 did use the 10 year average of 50 pence but the more complete and independent Competent Persons Report in March of this year used forward curves from the Intercontinental Exchange (ICE) of 35p, 39p, and 41p respectively.

The prices are all for UK/Dutch sales (so called NBP or TTF) and please note carefully that US prices (so called Henry Hub) tend to be lower as they are more exposed to short-term gluts of locally produced cheap gas. Please note also that ICE futures for summer months are traditionally very depressed – at least one misleading post deliberately quoted prices for only the summer/early autumn months. For more balanced, educated and independent views we would steer genuine investors away from these posters to see for instance:

https://www.fitchratings.com/research/corporate-finance/fitch-ratings-cuts-european-gas-price-assumptions-raises-us-henry-hub-09-06-2020

4 Questions asked on 20/07, 1 of which has already received an answer.

http://www.angusenergy.co.uk/media/investor-questions/

10 mins ago

I thought Sageman's post was good, too, but for another reason, that he has not given up hope of seeing UKOG bounce back to a more respectable share price level (if not £1 or, indeed, 10p).
Need to see activity at HH, to know more about plans for HH-2z and some news about Loxley wouldn't do any harm either, even if it's just to remove the uncertainty.
Oh, and a rise in the oil price would be beneficial, too!

17 filtered posts on this page, 8 not filtered, 2 of which are my own.

At least, someone is making money ... the MMs :-)

Volume of 238m per advfn.

And GL has said that, if an exceptional opportunity arose, he would find the funds to finance its acquisition.

It's another factor suggesting that the current market cap undervalues the company and its potential.

Agreed, gkb47, with the first part of your post of 12:10.

Given his background, it does seem unlikely that GL has not given some thought to the funding of ANGS's plans.

1/ offtake agreement could be announced any time;
2/ decision re selection of processing equipment is very close and may give rise to an RNS;
3/ pipeline permission sounded from one of the interviews as if it may be about a month+ away;
4/ submission of BB revised application perhaps this month (if not, there is an Investor Question to be answered by the 30th).

Perhaps they think that a timetable was necessary at an earlier stage of the project and that they are now updating shareholders as the projects develops.

Mr Market can reassess his stance extremely quickly, as shown on the day of the Saltfleetby CPR RNS, 05/03, when, all of a sudden, nearly 30% of the company's total share capital changed hands during the course of just the one trading session.

It's a thread-title such as this one which suggests there may be little risk in buying now.

I've made a limited effort on google, but not found anything.

I do remember he made some comments about NPV, but don't remember what! If those comments were made in an interview, they will be hard to find.

can't help on that one, wizard, think it goes back quite a long way.

I really don't see that happening any time soon, wizard, they need all their cash (and more).

Further cost savings are ongoing. (RNS of 30/06)

I suspect there are some AIM oil companies paying directors without any barrels being produced!

PS: those asset level operating costs really are remarkably low.

To conclude on a positive note, at the time of writing, Brent continues to stay at $40/bbl, which is very encouraging. We continue to actively pursue and evaluate new opportunities, both home and abroad, to add near term production revenues for the Company and we will be operating prudently and creatively to enable UKOG to perform at an optimum level. (RNS of 30/06).

Current asset level operating costs, which include crude transportation and refining fees, are approximately $13/bbl at current production rates... Further cost savings are ongoing. (RNS of 30/06)

The oil price held up well following OPEC+'s decision to go ahead with the planned tapering of production cut reductions, am quite hopeful it will offer them a tailwind.

what is holding up the re-submission of the Balcombe EWT application?