Member Info for OofyProsser

Risible. No one here has “information” about the diamonds, other than, apparently, Mr. Prelea. Good luck with that.

If your point is that the RBZ will be persuaded to stump up the value of the missing diamonds before Vast ceases to be, I think you’re going to be sadly disappointed. Though your confidence in the good faith of Zimbabwe Government institutions is touching.

I don’t see what difference that makes. If they’re gone, they’re gone.

Mrs. Mugabe

Yes, Mr. Sanderson and Adrian must be a bit concerned as the market cap passes through a sum that equates to less than 4x his annual salary. It doesn’t leave him much scope for a big raise this year, does it? To say the least.

An alternative explanation is that the usual suspects deployed the boiler room and off it went on buying by gullible mugs. I dare say we’ll find out very soon whether this is the correct interpretation of yesterday’s price movement.

DaveysShares: Your attempting to correct WG818 in this way suggests a short acquaintance with Angus on your part. They didn’t make a profit last year. The sum you refer to is a writing-back of a large part of the larger loss of the previous year, reflecting the implied revised future value of their forward contracts. No money has changed hands in respect of this re-valuation.

WG818: I agree with you that there ought to be an RNS tomorrow at the opening, either explaining what’s going on that might explain today’s rise or stating that the Board can’t explain it. Or setting out the terms of a large new equity issue for working capital purposes.

Ocelot: C4X is in a very different sector and appears to have cash equivalent to its market capitalisation. Doubtless it’s got issues (I haven’t looked at it thoroughly) but it doesn’t appear to share many characteristics with Angus, does it? I think the principal problem with AIM-listed resource companies is that the money they raise when they initially list on AIM is grossly insufficient to exploit whatever interests they have and they have to keep on coming back to the market, sometimes several times per year, for more money. Then it’s still too little. Meanwhile their Directors pay themselves frankly insupportable salaries and perquisites. They often fail to regain their listing price and, in spite of support by mugs in the shape of “averaging down”, “it would be rude not to have a few”(!) etc., they end up at a tiny fraction of their initial price. Some, admittedly, have a spike or two which do provide good opportunities for dealing profits but these hardly justify the listing.

I hope this company gets the support it needs to get it over the line. Other decent companies may follow suit and AIM may eventually consist of a lot of unloved, untradeable dogs. At which point, I should expect the theoretical oversight by the FCA to be discontinued. The UK economy will be unaffected, there will merely be a lot of greedy barrow boys looking for alternative employment. Good luck to them with that - the skills they’ve learned here are not really transferable, are they? Ocelot?

In view of the money they threw into the sidetrack, the number and quality of the consultants they (and Angus’s predecessors) used, and the time it took, there would, surely, have been good reasons for each of the decisions they took, at each stage. Wingas could have done the work far more cheaply but didn't think it would be worth the investment. So much so, that they paid Paul Forrest to take it off their hands. It’s a heavily depleted field with a complex structure. Even with all their new seismic and expert interpretation, it appears to come down to a matter of hit or miss. Lord Lucan’s shortcoming throughout his tenure lay in his reluctance to level with shareholders - and of course in failing to avail Angus of the much cheaper bank finance that he said he was offered nine months or so before the shocking revelation of the £12mm loan requirement, and the eight months after that that it took to conclude the equally shocking terms for the loan. One should also remember that if they’d got the field going again nine months earlier (and they had Covid and related supply issues to deal with) Angus would have enjoyed the big spike in gas prices and would have avoided the huge losses on the first two months of their hedge contracts. It would be a very different picture in such a case. As the poet John Greenleaf Whittier put it:

“Of all sad words of tongue or pen, the saddest are these: ‘it might have been’”. Innit?

Yes, Ocelot, but none of their funds appears to hold any energy shares.

Oh good, that’s all right then. The only way Angus shares will get back to that level is if we have a very large sustained rise in the gas price. It will have little to do with EV/EBITDA. It will have everything to do with a gamble on gas prices. For which you’d do better in the derivatives market, where Martian levels of capital expenditure, royalties, dilution and unlucky bets by an increasingly expensive management team are not an issue.

Was there anything about how they’d pay for it all?

Ocelot: dear oh dear. If you’re going to extrapolate in this way, would you explain the relevance of EV/EBITDA, please? And specifically, how it’s affected by rises in debt and by comparative interest rates. It seems to me that if Angus paid off all its debt, the EV/EBITDA would be even lower. Basically, all it tells you in Angus’s case is that the shares “look cheap” because there’s so many shares, whose price is low, and in spite of their having a ton of debt. Not because there’s any fundamental value in the company. Just that no one wants if because it’s so dodgy. The EV/EBITDA could easily get a fair bit lower. Unless they borrow a whole lot more money or sell billions more shares to whichever entities own that 42%.

Sorry, Bubblepoint.

Bubblepoint: we seem to be overlapping! I think I’ll leave this to you for a while.

Ocelot: I’ve watched them and can’t recall their discussing how their growth plans are to be financed.

Ocelot: if by “negative sentiment” you mean that investors have begun to realise that Angus will not be able to finance internally the investment required to keep Saltfleetby flowing, but will need to go to shareholders time after time, while the gas pressure drops continuously, then I think you’re right. Some clarity on the new deal with Trafigura re hedges and offtake agreement might help but, as was observed here yesterday by another poster, there’s probably a sound reason from the Board’s point of view for their reluctance to share this information with shareholders.

Ocelot: you really can’t (and Mr. Zielicki should know better than to) usefully compare insignificant tiddlers like Angus with the sector average. Investors are rightly concerned about Angus's medium term future. What’s the EV/EBITDA of UKOG? It’s meaningless, in my opinion.

Yes, Sageman, absolutely right. The cost of the failure to get the plant working in time to exploit that spike was grossly exacerbated by the forward contracts. So they not only missed really high sales prices, but they had to pay their senior lenders the difference between those very high market prices and their very low forward contract prices for a couple of months. Ruinously expensive. And we don’t know the terms of their new forward contracts with Trafigura, do we?

HITS: I’ve no issue with looking to the future. That’s what I’m doing. Future costs are as important as future potential returns. Angus management appear reluctant to discuss offtake agreements, hedge details and new well drilling costs. It’s no good investors quoting the management’s optimistic forecasts without considering the cost side of the argument. Maybe the analysis is too hard/time-consuming for them. If so, they’re ill-advised to ignore the analysis posted here by people who can do this research. The past here is pretty bleak. The future doesn’t look any better.

WG818: no mention at all, either, about the terms of the new Trafigura offtake agreement and the new hedges. There’s a reason for the one-year grace period before the start of loan repayments on the £20mm. loan they needed to make themselves free of £12m. of debt (which they didn’t need in the first place). If they have to put off investment in a new well until next year, that’s likely to be a very expensive year indeed. Meanwhile the average gas flow depletes every month.