Member Info for OofyProsser

Micky1122: you can’t think such a thing might happen in an AIM-listed resource company, surely? Announcements timed to coincide with a financing, which enables Directors, NomAds, brokers, PR companies etc. to maintain their lifestyles? Surely not?

SandyShore459: I think that once a receiver or administrator has been appointed, they have pretty wide discretion. They’re not appointed to look after the shareholders’ interests. I’m not sure that a judge would be involved, other than on the application to appoint administrators, and that might happen when the company fails to meet a contractual payment. Creditors can’t afford to wait years for their money and nor should they. I don’t know what relationship Vast has with its creditors, but the latter will have the whip hand. I think I’d take a pretty jaundiced view of the prospect of an early release of diamonds that have been held for many years in a bank vault in Zimbabwe. A court order is one thing, finding the diamonds may well be another.

In Vast’s case, as I understand it, there’s a number of Charges outstanding, connected with loans from Mercuria. I haven’t been through these, but they're likely to have clauses entitling the lender to appoint receivers in the event of the prospect of imminent insolvency. it’s as well to understand that receivership normally leaves little for ordinary shareholders. There’s also another large loan due for repayment in May. Vast will be exploring how these loans are to be serviced/repaid currently but you’d have to make up your own mind as to the possible availability of extensions to these loans, and/or of equity raisings sufficient to satisfy the lenders. You may expect quid pro quo to be required in the former case, possibly in terms of interest rate rises or substantial equity kickers of some kind.

All the above is my opinion only. The usual provisos apply.

I think the conclusion that some have arrived at that a court ruling in Zimbabwe that Vast should be given their diamonds, which have been in an Harare bank vault for many years, will persuade a creditor or insolvency practitioner that the diamonds are a realisable asset is probably optimistic. If it’s so clear that Vast will get the diamonds at some time soon, they should be able to borrow against them from a bank, or from one of these commodity companies that have branched out recently into the field of project finance, enough money to meet their commitments when they fall due. Or they should have a rights sue or share placing and pay off what they owe when it’s due. Why should Vast’s creditors bear the risk that the diamonds, for whatever reason, will fail to put in an appearance? The risk belongs properly with Vast’s owners, surely?

Sorry, fat finger. ... not many with profits against which the losses may be offset that these losses may not be much of an attraction. If someone were going to bid for It, you’d think they’d have done so before AAOG was suspended.

There’s no option here for shareholders but to wait and see. Mr. Forrest does seem still to own 25% but that may mean something or nothing. It’s probably the best hope.

MrEMC2: I don’t think that transaction with Zenith ever went through. The sequence of events is all there in the first page of RNS’s here. Mr Forrest seems still to own 25% of AAOG but he’s allowed its AIM status to lapse. There was a proposed deal in the Angus Energy Saltfleetby field between AAOG and Saltfleetby Energy, which held Mr. Forrest’s investment in the field, but that did not take place. If Mr. Forrest wants to continue to be involved in AIM, other than as a non-executive Director at Angus Energy, AAOG may be his vehicle but he looks like making so much money from his very sweet deal with Angus for the sale to them of his 49% stake in the Saltfleetby field that he may prefer an easy life in the sun somewhere. Who knows? There are tax losses in AAOG but there’s a lot of small oil companies with large accumulated losses and not manybwith profits againstv

MrEMC2: I haven't followed AAOG for very long and have only a cursory interest in it, but Paul Forrest resigned from Forum Energy Ltd. in May 2019, at the time he was acquiring 100% of Wingas’s Saltfleetby gas field (which he has since sold on to Angus Energy in two tranches). He has been the only officer in Forum Energy Services Limited since 2015, and notified a controlling stake in it in about February 2020. The two Forum companies appear to be unrelated in ownership terms. Mr. Forrest is the sole Director of Forum Energy Services Limited

Forgive me if I’ve got it wrong, but I can’t find a reference to Forum Energy Ltd. having made an investment in AAOG. Forum Energy Services Limited has. Their accounts are pretty thin.

Since June 2022, Mr. Forrest has been getting rich as a result of his sale of his 49% in the Saltfleetby gas field to the 51% owner, Angus Energy plc. Whether he has any plans for AAOG is unknown. He has a further Directorship in a thing called PGOX Massey, which might be worth a look.

One of the three remaining Directors , Tania Maciver, resigned two days ago, for what it’s worth.

JODO: thanks. Angus’s near term future depends virtually entirely on the success of the sidetrack which they’re about to drill. If it succeeds as they forecast it will, they’re out of the woods and you may expect a useful rise in the share price. If its completion is later than scheduled by more than ten days, they’ll need more money. If it fails, Mercuria will be making the decisions, I should think. So far, Mercuria appears to have been supportive and the Anguish management says they are long term supporters. But we’ve had next to no details of the terms under which the missed hedge payments from July and August (£8mm-ish?) and what part of the loan repayment due at the end of September have been deferred. Meanwhile, Mr. Forrest continues to sell his shares. If you believe the story the Angus management tells, the shares are grossly undervalued. So Mr. Forrest must have something very good into which he’s investing the proceeds of his sales. As I’ve remarked before, Angus Directors are not buying, though they have voted themselves a whole lot of options. If you can get yourself a similar deal - free options that convert at 2p once the price has reached 3p - fill your boots.

I’m no expert on oil and gas drilling. It’s a fact that several earlier sidetracks from the well from which they’re drilling this one failed. The management have a range of reasons they offer for these failures and it seems that they’ve got a host of competent people advising and doing the drilling this time, and better seismic. You pay your money and you take your choice. A cynic or an old AIM hand might expect the usual suspects to engineer a ramp up to 3p+, at which the management options can be exercised and the relevant individuals enriched irrespective of the outstanding loans and hedges. Who knows?

Mr. Forrest appears to be getting rich, gradually selling his huge shareholding in Angus in the market. None of the Directors has bought shares for well over a year and each of their holdings is very small. He got a sweet deal when SEL sold his 49% to Angus.

From today’s Angus Energy Q&A:

“When will the company buy AAOG with £42m tax loss allowance and will you expect problems from the chancellor with any new revised fiscal policy. Asked on 1 November 2022

We have never suggested that we have any plans to buy AAOG – nor do we. As to the Chancellor, we know as much as you.”

Petroleum1: so you're taking as fact the ramping of an unidentified Twitter user, are you? The single compressor currently on site is rated at 5mmscfd. Production will need to rise significantly above its current flow rate to avoid another loss, on the September hedge. They’ve got big debt service payments this month, and have to maintain a large cash float under the terms of the Debenture Charge. They haven’t got money for a sidetrack, even if they’re allowed to drill one while operating the existing plant. We don’t know the terms on which Mercuria have allowed Angus to defer their existing large debts on the missed July and August hedge contracts. This incompetent Angus management has just added two very competent senior people, one a non-executive Director, the other a hands-on Executive. Others think this means Angus is going places. I believe they’ve been put in by the senior lender, who are on the other side of the hedge contracts.

They will be very short of money at the end of this month if they don’t have a placing. I can’t see where in this statement it says they’ll have a second compressor in place by the end of September. They’re at Mercuria’s mercy. The two new Angus executives were most likely appointed by Mercuria and are reporting to Mercuria, who appear to be able to exercise their Charge and acquire Angus at will.

If this were looking so good, why has none of the Directors bought any shares in the past year? Why have insiders been selling into the rise?

Where did you read that they’re installing the second compressor at the end of the month?

Well, I wish you luck with it, it would be nice if something good happened for the AAOG shareholders.

It’s possible also that the NSTA has had a look at the accounts of Angus and is not impressed. These new Board appointments could result in the exit of the current Chairman and MD. the new men would impress the regulator more. i can’t see such people accepting roles at Angus without large cash incentives and guarantees. Angus isn’t in a position to offer them either. The only company involved with Angus that could is Mercuria. Why would they want to leave the ownership of Angus with the current shareholders, when their Debenture Charge entitles them to take Angus over if they fail to meet certain financial requirements. There’s £5mm of debt service charges due soon, on top of the invoices for the cost overruns and a month of hedge deferment - as well as a second month’s worth which may or may not qualify for a deferment. I know they’re getting excited on the Angus chat site but there remain very big risks here.

Petroleum1: yes, those two new Directors are far bigger hitters than the present Board members, they must be on a promise. Who’s in a position to promise them anything? Not Lord Lucan, whose position is looking very shaky with the appointment of Richard Herbert to an executive directorship encompassing all the gas and oil assets. It looks as if Mercuria has put them in. Read into that what you will.

Petroleum1: apart from the fact that Angus has £5mm of debt service costs to pay the Lenders soon, from cash resources that they don’t currently possess, the loan is not their big problem: the big problem is the hedge contracts, on which they already owe something like £6mm, by my calculation, and possibly more. If they get the plant working at capacity in the first week and a half of September, they’ll break even that month, possibly a bit better. Thereafter, however, the increased volume from 1 October required by the hedge schedule cannot be achieved from the existing wells, so further big losses will be incurred that month. From November, they need a successful sidetrack to enable them to meet the requirements of the hedges. They haven’t currently got enough money to pay for a sidetrack, by my calculation and a sidetrack from that well is not certain to find the necessary volume of gas. Mercuria will be in a position to take Anguish over at any time if Mercuria want to.

This is AIM, though, anything can happen and investors are capable of deluding themselves for extended periods, so the price in the short term is not reliably predictable. Good luck with it if you’ve bought some.

Yes, Petroleum1, it wasn’t very clear, sorry about that.
Have you taken into account the sums owed on the hedges to Mercuria, in your calculations?

Petroleum1: there are two existing producer wells which are being commissioned with the rest of the plant. One is at Site A, half a mile away. The other is on Site B, long with SF07, the well from which the sidetrack is planned. The flare is in the corner of the extension site and there is a gas engine generator present. If Angus have been told they may drill it while producing gas, they haven’t told us, and they’re short of good news.

It may be easy to drill these sidetracks but several previous attempts from the SF07 well have been unsuccessful. It was not their preferred well to drill from - in fact when they were discussing their original first choice, SF05, they were somewhat dismissive of SF07.

If they manage to get it going from the start of next month at forecast levels, they’ll get some positive cash flow, it’s true, but the gas price will have to rise a lot more to enable them to meet their debt service charges that month. In addition, we don’t know what “a portion of” their 3rd quarter hedges means. One month’s worth? Two months? From October, they will be unable to meet the hedges without a successful sidetrack.

Re their cash position, of the £6mm they raised in May, £4mm was spoken for in immediate payments and a cash reserve required by the regulators and by the loan covenants. They had just £2mm. left for working capital. That was three months ago. They’re 10 weeks behind their May schedule. How can they order a sidetrack? What will they use for money? Mercuria may defer more of the hedges but that’s storing up more issues into the future. And Mercuria are in a position to require further compensation for doing Angus more favours. And unless they’ve got guarantees re this from Mercuria (or Aleph) they can’t very well enter into further contracts, can they? If they have got such guarantees, they should tell their shareholders,

Petroleum1. Angus haven’t got permission for a sidetrack while they’re still commissioning the plant. They may not even be able to drill one while the plant is operating at all. In which case they’ll have to mothball the plant while they drill it. Lord Lucan says it will take 50 days, assuming no holdups. Well, he’s never got anywhere near meeting a schedule so far, in all his three and a half years at Angus. And there’s no guarantee they’ll find significant gas with it. It was budgeted, I think, in the CPR, at £2.8mm. That was last October. Inflation will have taken this sum well over £3mm. Where are they going to find the money for this? £5mm of debt service costs next month. A further very large loss on the hedges this month. Unbudgeted 5 months (and counting) work on the plant in excess of the mid-March schedule in the CPR. They’ve raised £6.6mm since end-March, when they had cash of £1.4mm and creditors of almost twice this number. G&A expenses of £1mm+ since then. Lots of new employees to man the plant, who have had to be trained. Do the sums and please tell me how they’re going to meet their bills over the next six weeks, even without starting a sidetrack. And they're required by the terms of the £12mm. loan Charge to maintain a significant cash sum at all times.

Mercuria is going to have to let them off paying even more money that Angus will owe them. Mercuria is a privately owned commodity firm, not a charity . Do you think they’ll give Angus something for nothing? Is Angus even a going concern?

Petroeum1: I see you are now interested in Angus Energy on its LSE site, where you are taking the very well-researched Headinthesand to task.

I think you will find, however, that the monthly forward contracts agreed between Angus and Mercuria for nine months from 1 October cover 1.75mm therms, not 1.5mm. The historical data suggest a 15% p.a. depletion rate, so they'll be short for the life of the hedges without a successful sidetrack. . The company is in hock to Mercuria. They will decide its future. They’d make more money by merely exercising the Loan Charge provisions. But there may be complications related to NSTA approval of a new owner. So they may merely require changes in the covenants giving them an even bigger share of the project’s revenues. Either way, Angus shareholders appear to be stuffed, no matter how hysterical the claims of the boiler room cabal.

I’ve had only a cursory look at this but I can’t understand how a Board of Directors of a public company can have allowed the current position to develop.

It seems to me there are some odd-looking developments, against the interests of small shareholders, in a number of AIM companies and on the LSE generally. It might be an idea for aggrieved shareholders here to have a look at what’s happening at POG (Petropavlovsk). In addition, the police maintain a site called “Action Fraud” for people to report suspected fraud. You’d need to get your ducks in a row first but it’s free and it’s the police.

Good luck with it. I don’t think it’s going to be the last.