Member Info for OofyProsser

Petroleum1: well, in that case and in view of the very effective ramp that’s being put on at the moment, I’m sorry. I’m a long term investor, I don’t indulge in speculative day-or week-trades. I’m very much expecting a share placing this week or next, though the extent of this rise may have got Gneiss out of their 39.2mm shares - and possibly one or two large holders out of theirs, who will have been disappointed by the lack of progress on a bid. Time will tell, though I’m sorry to have been a factor in your missing a 100% profit in short order. The long term outlook is little changed by this ramp - though if it carries on much higher, they might raise enough money in a placing to pay for the sidetrack. Or tide them over a couple of weeks’ losses on the July hedge. Or pay the last instalment on the Joule Thomson valve, or overtime for the welders and electricians. The naivety of many AIM investors allows unscrupulous managements to take appalling liberties, institutional investors would look askance at the claims made by Lord Lucan in his recent LSE interviews. We shall see, though - there’s a chance they may get Saltfleetby into production in time, with enough gas to meet the hedge contracts’ terms.

No one is talking about first gas in April (well, one or two company shills and day traders may be inventing stories but that’s AIM for you). Two indispensable pieces of kit are not scheduled to arrive before 27 and 29 April respectively. They then have to be tied into the plant with electrical wiring and welded pipes. Then it all has to be tested and NG will have to give it their seal of approval. First gas is not sales gas, there’s tons of regulatory hurdles to pass before they can start the gas flowing. They can’t borrow any more money, under the existing Debenture terms. The current share price is likely the prelude to a large share placing - the only recourse they have for fresh money. Lucan said they’d have it finished in the summer of 2020. Every successive deadline he’s announced - and there’s been too many to number - has been missed, as has every successive budget. They’re in a race to get it finished before the hedge contracts apply in July. It’s possible they’ll make it. If they do, the gas will need to flow well and uninterruptedly. The volume required to meet the hedge contracts rises a lot in October, to a level that the two existing wells/compressors can’t meet, so they’ll need production from a sidetrack by then. They haven’t got enough money to do a sidetrack, though they may soon raise enough to do it, but then there’s regulatory permission required for drilling a sidetrack while producing from a contiguous well. They haven’t got that yet.

Why have they put the company on the blocks if they’re so confident? Why has their largest shareholder irrevocably accepted a low all-paper bid from another minnow? My interpretation is that the management feels it is quite likely they will miss their targets and the company may fall into the hands of its lenders before they can get enough gas flowing to meet the Debenture/hedge terms.

Angus is short of the money it will need for a sidetrack, it’s got no cash to spare to invest in AAOG. The Sound “bid” appears to have been a successful attempt to get the share price up for the February placing. The latest little ramp of which the LSE interview was part may well presage another share placing. Their pressing problem is the gas hedge contracts which apply from 1 July, not the tax they may or may not have to pay. They’ve still got tons of work to do at Saltfleetby and important parts of the plant not expected before the end of April. Angus has always been grossly optimistic in its timing forecasts. The uncertainty as to whether they can get the plant on stream in time probably explains their stated desire to sell Saltfleetby or Angus itself. It seems they can’t sell Saltfleetby without the approval of their Lenders - and why would the Lenders approve a sale? And the uncertainty surrounding the timing of first production for sale of gas from Saltfleetby and the consequent uncertainty over their ability to meet the terms of the hedge contracts would put off most buyers. Still, this is AIM and anything can happen. Many AIM companies are not run for the benefit of their investors, they're run for the benefit of their managements.

Irishmouse: Angus is a poorly run company and has been a rotten investment but it has never achieved a market capitalisation as low as £1mm.

Bowlers12: the Auditor’s letter explaining the reasons for resignation are now available on the Finablr Companies House pages. Basically, they’re saying that, in spite of assurances from the Company that its accounts would soon be ready to be audited, none have been presented to them and they’re now way overdue.

Bowlers12: I too doubt there’s anything left for shareholders. All you can do is wait and see. Good luck with your remaining investment.

It’s impossible to say. Finablr has never produced its accounts. The odd thing about it is that Sheikha Lubna, one of the Directors, is a senior politician in the UAE, theoretically the most influential woman in that country and in 2017 the 36th most powerful woman in the world, according to Forbes. Her presence on the Board here, where she’s been a Director since well before the scandal erupted, must be an embarrassment to her. Very strange.

“Companies House
24 Mar 2022 Auditor's resignation
This document is being processed and will be available in 10 days.”
This should give the reasons for the auditor’s resignation.

Why would Sound proceed with a fresh bid for Angus? They’ve been in the Angus data room for nine weeks at least, so they’ll know all the financial data that investors haven’t got access to. They should be able to estimate for themselves how much work remains to be done at Saltfleetby before interest payments are due and the hedges start to apply. They’ll know how much more money Angus needs to raise to finish the work. If Sound were interested two months ago in Angus because they need cash flow over the next two years to invest in their N. African projects, they know more now. If they raise their “bid”(!) the Sound share price could take a beating, I should think. In any case, the only investor in Angus supporting it unconditionally is the single largest shareholder - an insider.

Yes, the people on the Angus site are getting quite excited. The EA approval is more than three months later than Angus predicted in late 2021 but no one thought it would be withheld. The statement from the company that they have all the regulatory and planning approvals needed before first gas conceals the fact that to get to steady sales gas production (not the same thing as first gas) they’ll need to pass HSE and NG inspections.

The way this has been done suggests to me another share placing is imminent. The existing overhang of 39.2mm. shares in the hands of Gneiss may mean that any share ramp this time may be short-lived.

The Lenders are not a hedge fund. They’re commodity traders. Use of commodity derivatives contracts are meat and drink to them. The hedges cover only a little more than 50% of expected gas production from October. If they agree with Angus’s estimate of 10mmscfd , the rest of Saltfleetby production over and above what is covered by the hedges will be quite valuable. Why would they want to forgo the revenues from the total production from the field, given the chance? I wouldn’t, and I’m not a hedge fund manager either.

What expertise has Angus got that the Lenders haven’t? The Chairman is a PR glad-hander. The MD is a finance man, and not a very good one, going by his record over three years at Angus. There’s a Finance Director and Mr. Hollis, the sign-off for all technical releases. and a number of other subsidiary staff, all of whose jobs would be in the balance in the event that Angus’s assets are taken over, though a few of them might be kept on. A bright young MBA at Mercuria would welcome to chance to take Saltfleetby on, and they’d hire the appropriate people for a field of this type. It would be cheaper and better than leaving it with Angus and the Lenders would keep all the profits, not just the profits on the hedges and the royalty. Alternatively, they might sell it, once they'd got it into production.

If Angus get the gas flowing at over 5mmscfd and sold to Shell in June, they’ll be fine. If they can’t get it flowing at the rate required by the hedge in July, not only will they not be able to drill a sidetrack but they’ll be in default on their loan terms. Why would the Lenders write such a tight and detailed Charge document on their Debenture if they have no intention of exercising the rights the Charge gives them? And why has Angus declared itself open to bids at this stage - three months before it says gas will start to flow?

The details of the appointment of the Administrator are on the Finablr site at Companies House now. I doubt you would get a reply from the Administrator, other than a statement that they’re unable to comment at this stage.

It’s impossible to know whether Angus will be in a position to meet the terms of the hedge contracts from 1 July. It is possible to know roughly what the possibilities are if it doesn’t. The contracts are monthly forward sales of gas and Mercuria, the principal lender behind Angus’s £12mm. loan, is the beneficiary of the contracts. Angus and SEL are both on the hook to meet the loan terms, as borrower and guarantor respectively and the forward contracts are part of the loan terms. Any failure to meet the contractual terms represents an event of default. The Lenders (principally Mercuria) can then assume ownership of Angus's and SEL’s assets, which are already in the technical ownership of their security agent, Law Debenture. Whether Mercuria would take over the assets in this event is not knowable, but they’d certainly be in a position to dictate changes in the contract terms to their own advantage, as an alternative.

If Angus do produce enough gas by 1 July to meet the contract terms, they’ll be OK until the end of September. At that point, the contract requires more gas than the existing wells are expected to produce. So additional gas output will be required from the sidetrack which Angus has been debating drilling for the past nine months. There is considerable doubt as to the likelihood of the sidetrack from well SF07 finding any gas. It’s also unclear whether the HSE will deem it safe for them to drill it while gas is flowing in the pipeline a few yards away. They can’t drill the sidetrack until gas is flowing, they know that will not be allowed.

If Angus had a better history of meeting deadlines and budgets, the market would have more confidence that they can do all the above in time. As it is, there’s a strong suspicion that they won’t. They’re probably in need of some more money, which they can only raise through equity placings. There’s also an overhang now of 39.2mm shares resulting from their settling their legal dispute with Gneiss. Those were available to Gneiss from yesterday. Gneiss will have a pretty clear view on Angus’s financial situation.

It’s a judgment call, or guesswork, as to whether they’ll get the gas flowing in time. It’s as well to be clear as to what will happen if they don’t.

Well, now we know.

Denny: I don’t think Prism is interested in the listed plc. They’ve bought all the operating entities, as I understand it and renamed them Wizz. I doubt there’s anything left in the old plc. I’ve no idea how the present impasse with the FCA/LSE will be resolved.

Bowlers12: well, you never know. I don’t want this to be the case but I believe it is. I hope I’m wrong and that shareholders of this will rescue something from the looted wreckage. Words can’t express the contempt I feel for the people responsible for this outcome .

Finablr’s operating businesses have been sold. Gone. Finablr was bust. Whatever is left in the plc, it isn’t any of these Wizz businesses. Finablr has never produced any accounts. The FCA and Companies House issues appear to be mere housekeeping - insisting on the correct procedures.

I think Denny is correct about the striking-off action. It’s suspended for now. But the accounts are 17 months overdue, there’s no company Secretary and the operating assets have been sold to Prism.

Petroleum1: am I interpreting your post correctly? There is no hedge in June. Any gas production in June is therefore going to achieve the market price. I don’t think anyone is seriously predicting 8mmscd from Saltfleetby without a very successful sidetrack. There may be a temporary peak as a result of a pressure build-up following the wells’ 3-year closure, but that will be for a very limited period and is not expected to reach anywhere near 8mmscfd.

On the subject of the sidetrack, I’d be very surprised if they manage to begin drilling that in June, as he predicted yesterday. I believe they’ve spent the money earmarked last year for a sidetrack. They can’t borrow any more until they’ve paid off the existing loan.

On the subject of finishing the gas plant by early May (the final parts are now scheduled for 29 April, the Friday before the bank holiday weekend): they’ve completed 15% of the pipe welding, begun a month ago. That leaves 85% to do. They’re going to need many more welders if they’re going to have it done in time. All these forecasts depend on the performance of their stated plans by the Angus management, which has never met a single forecast deadline or budget. Not one. Ever. And I think another share placing is just round the corner. The Report and Accounts are slightly later than usual. There’s no announcement from Sound Energy today. It must come today or on Monday. Why would a company about to produce gas on the scale you’re predicting by June put itself up for sale at the current price?

Yes, if they manage to achieve that before the loan service payments and the hedges are due, Angus will be an excellent investment. I merely question the timing and your estimate of likely volume.