Member Info for OofyProsser

Petroleum1: the terms of the charges on the Debentures don’t allow any more borrowings. In any case, if you’ve accepted usurious terms from a commodity trading company it means the banks won’t touch you. And we don’t know if the Debenture holders have laid off their Saltfleetby hedge contracts and guaranteed themselves a profit (assuming Angus can produce the gas required or can afford to buy it in the market at market prices to make up the deficit). Or whether they're just watching prices go higher and higher and looking forward to the profits on the hedges as they are. Either way, would a commodity trader turn down the option of taking over the Saltfleetby asset unless he were getting a better deal? And Angus can’t afford to offer a better deal. They’ve got a placing coming, which may only raise enough money for another month or so. They can’t borrow. They can’t sell assets, either, without the Debenture holders’ permission. All they can do is have share issues and hope the equipment, some of which is very late, arrives in reasonable time.

Angus has, as you know, put itself on the blocks. Bids are invited, for the company or the Saltfleetby asset. But they can’t sell the asset or part of it without the Debenture holders’ permission and OGA approval. And it seems likely that if they were to accept a bid for Angus itself, the change in ownership might need OGA approval, which can take 18 weeks (I think that’s the figure). The delay would have a serious cash flow effect, particularly as it affected their ability to meet the hedge terms. In any case, even if the loan is repaid, the hedges and the royalty remain intact, or a buyer will be required to pay a premium.

Re the gas transmissibility in the reservoir, they are planning a sidetrack from well SF07. They originally said they were doing it from SF05 but found belatedly that they didn’t have planning permission for that. The previous owners tried 9 sidetracks (I think, it may have been 7) from SF07, all unsuccessful. Angus think they know why and are doing it differently, but the fact remains that in earlier announcements, where they were touting SF05, they were pretty scathing about the prospects of a successful sidetrack from SF07. What this all implies about the reservoir, I don’t know. The fact is, this is what they’re planning to do.

They say they've had indicative, non-binding offers but have no offer on the table and are not currently in discussions with a potential bidder. Some suspect this is just to get the price up for a placing. I can’t believe they'd do that, it’s far too obvious. I suspect they may be serious, since they may think the prospects of Angus finishing the project in time are slim. There’s clearly a chance of a deal such as Skittish suggests, or with Cindrigo. But none of these companies can afford to buy Angus at current prices and the banks are unlikely to finance them.

Part 2: .. earlier predicted, but that this would not result in material delays. All their announcements are accompanied by provisos that their forecasts, including any containing the word “will”, are not necessarily to be relied upon.

So these are the reasons why doubts remain about Angus, even while the huge rise in gas prices has made Saltfleetby much more attractive to potential investors. Any sale of Saltfleetby, or part of their share in it, would have to be agreed by the Debenture holders. As it stands, there’s a good chance that the Debenture holders will be able to take ownership of the field in the summer. There’s also a chance that, with or without a sidetrack, Angus may not produce enough gas to meet the terms of the hedges, with a similar result. It’s Saltfleetby that’s attractive, not Angus. And any buyer of all or part of Angus’s share will have to meet the terms of the hedges, which remain in place until the summer of 2025, shortly after which gas volume projections suggest a quite large and progressive decline.

Angus may meet the deadlines set out in the Debenture charges and the terms of the hedges. It’s possible. If they fail to, the Debenture holders may be willing to defer the terms of the loan to tide them over - though they will want a quid pro quo to do so. The big risk is that the Debenture holders, who are commodity trading firms, will see a better opportunity in taking over Angus’s assets. This is the risk/reward equation here. And you have to take a decision on the management, who have missed every deadline and exceeded every budget, and have been consistently slow to reveal the state of play to the market.

I don’t know whether your conspiracy theories, which I have genuinely enjoyed reading, will be borne out by events from here. I normally prefer the ****-up theory. It’s simpler. I do agree that the Forum/SEL/AAOG situation is interesting. So is the fact that The Earl of Lucan and Jonathan Tidswell were for some months non-exec Directors at Challenger Acquisitions, a company which shares large shareholders with Angus. Challenger, a suspended cash shell, was recently merged with Cindrigo, a green energy tiddler. There’s a potential conspiracy behind every door with these companies. And as I’ve posited before, are these individuals behind the companies we’re discussing Machiavelli or Baldrick?

Skittish: Angus said in about February last year that the hedges were arranged with the lenders, at their insistence. So not SEL/Forum. The Saltfleetby gas field and Angus should not be considered to be the same thing. Angus owns 51% of the Saltfleetby gas licence area. It has arranged a £12mm amortising Debenture to finance it - after initially predicting it would cost only £2.5mm to do so and having exhausted its own resources - at an interest rate of 12%, with final capital repayment in December 2024. Once the loan has been repaid, or is close to being repaid, the Debenture holders will have a royalty of 8% of the field’s revenues. There are limits on the minimum amount of cash Angus must maintain over the life of the loan. Most important, there are hedges in place which start in July this year and by October will exceed the expected production from the two wells which will be put into production, for 9 months. They are planning to drill a sidetrack from an old well from which (I think this is the figure) 9 previous sidetrack attempts have failed to find gas. The drilling of the sidetrack has been pushed back into the spring because the works at the site are way behind schedule. The hedges were arranged at a time when gas prices were far lower and commit Angus to sell at a fraction of the current price. When the Debenture was arranged, charges were put in place whereby a failure by Angus to meet the terms of the Debenture is defined as an event of default, which would enable the Debenture holders to take over Angus’s assets.

So there are two issues: first, Angus’s ability to repay £1.4mm. of interest and an unknown amount of loan capital, but at least £3.4mm by, presumably (we haven't been told the repayment or interest dates) the end of May or June (the loan was signed in mid-May). Second, Angus’s ability to meet the terms of the hedges. Both of these appear to be existential issues.

The gas project is behind Angus’s latest schedule for it. There’s no data on the flow rates of the existing two wells, which have not been tested yet. There is uncertainty as to whether the planned sidetrack will find gas, or be able to produce enough by the time the hedges come into effect. Certain regulatory permissions have not yet been received for elements of the project, including from the Lincolnshire County Council, the Environment Agency and the Health and Safety Executive.

The Angus Board has made a number of forecasts about the start date of gas flowing. The first was May-August 2020. In September 2020, when they announced the requirement for a further £12mm, on top of about £2.5mm already spent, to get it into production, they forecast it would be by the end of the year. The latest forecast was part of the 1 October data in the second CPR. It predicted “first gas” in mid-February 2022. They’re latest announcement, a week or two ago, suggested the6 were another 10% over budget and some parts would be delivered some weeks later than

Skittish: a small correction to your very interesting timeline post earlier: probably just a technicality. The Paul Forrest company acting as guarantor to the Charge on the Angus £12mm Debenture is Saltfleetby Energy Ltd, not Forum Energy Services.

In addition, I’m not an accountant and would welcome anyone’s views on how much cash Forum and SEL actually have. I can’t see much in their balance sheets. The respective Accounts are as thin as they’re allowed to make them and are ages out of date in any case but it looks as though there’s just been a lot of juggling of the decommissioning reserve.

The people holding out last year against the terms they were offered must be rather thankful they were bought out. It looks as if the companies in which certain Kazakh businessmen previously close to Mr. Nazarbayev made their fortunes are going to be fleeced. Katz must be close to the top of the list. Unless Kaz’s ability to complete the Baimskaya development will affect relations with Russia.

One also has to determine whether Paul Forrest is Machiavelli or Baldrick: there are cunning plans and cunning plans. And whether the Earl of Lucan is a finance whizz or a clueless male model with a tendency to waffle. We may know more next week, when the 1%+ holders of Anguish shares have to declare their shareholdings.

Me too.

Irishmouse: that would be for a transfer of 25% of SEL’s interest in Poundland, wouldn't it? Not for the transfer of the majority holding from the field operator.

Skittish: you put forward a very interesting set of coincidences, cross-holdings, shared office addresses etc. It’s hard to put many of them down to happenstance, isn’t it? Is there also a Jonathan Tidswell connection (other than his apparently friendly relationship with the Earl of Lucan and with the principals at Knowe Properties, a big investor from its inception in Anguish).

The problem I have with it is the status of Poundland itself. It's the only interesting asset owned by any of these related companies. It seems to me it’s going to be very hard to sell all or part of the asset itself before the hedges apply in July. It’s very complicated and the Debenture holders have a charge on all of Anguish’s assets, so their agreement will be required. The charge gives the Debenture holders the right to take over Anguish’s assets in the event of a default, which includes failure to pay the £1.4mm of interest and the first instalment of the £12mm amortising loan some time in May or June. . It’s not clear that Anguish will have cash flow sufficient to meet these payments and the terms of the charge preclude further borrowing, Anguish may have share placings but a placing so soon after the announcement that the company is for sale because it's so cheap(!) would raise eyebrows at the LSE/FCA. So the Debenture holders may take the view that they won’t negotiate, and will merely wait until June and acquire the assets on a default. In any case, the OGA etc. would want months to look at the new structure before approving the deal, which would put back production to long after July.

If instead of selling the asset, Anguish itself were sold as a going concern and its separate corporate status maintained, they would obviate these issues. However, the hedge terms, which begin to apply in July, are so onerous that if they are late to produce enough gas to meet them, they will be an extremely heavy burden. The terms of the hedges are in the October 2021 revised CPR , on p.49. People on the Anguish site think they’ll negotiate terms with the Debenture holders to ditch the hedges, but they are potentially so lucrative to the Debenture holders at current gas prices (or anywhere near them) that they would want a premium over their present discounted value If they were to surrender them. You’re talking about many, many millions. In any case, the hedges continue in place until June 2025, soon after which the gas flow is expected to reduce quite rapidly.

So, while the huge rise in the gas price has made the economics of Poundland much more compelling, it’s the asset that’s worth more, not Anguish. Most of the profit will go to the Debenture holders and the owners of the hedge contracts. I suppose that if Mr. Forrest retains the money he got from Wingas or if he has access to other finance, and if he gets involved in taking over Anguish, the money may be available to get Poundland on stream in time to avoid a default. But the hedges will still apply.

The ADRs appear still to be trading, $100 worth yesterday, possibly a bit of short closing. I don’t know why it’s still treated as an extant share but the reality is, it’s gone. It’s unlikely in the extreme that shareholders in the defunct former entity will see any return of any kind, in my opinion.

Ocelot: criticism of Japan on the climate change issue is misplaced, in my view. The biggest problem in climate change is population growth. Japan and South Korea have quite rapidly declining populations. Europe would, too, but we’re importing people seeking asylum. Large parts of the developing world have rapidly rising populations, which it will probably be impossible to sustain if the scientific forecasts are correct. Whole populations will be on the move in due course, they’ll have too little food, exhausted soil and no clean water where they live now. These are the issues that need addressing but they’re far too hard, politically, even to debate, these days. Japan’s effort to keep its dwindling population warm enough this winter is not even a side issue in the real world.

Ocelot is jolly good. Very smooth and reasonable. Very nice to the managements of all the companies she comments on. Lovely. What’s not to like? If more posters were like her, there would be much less rudeness and hostility on these boards. No expression of independent judgment either. A nice, polite, management love-in, in fact. Just the kind of thing that PR companies are hired for. Super.

Apologies for repetition.

There is no comfort, surely, for ex-Finablr shareholders in either of these reports on ex-Finablr subsidiaries? They were both insolvent and both have been in the hands of their creditors for quite some time. Finablr’s businesses have mostly been bought by Prism for £1 and merged into Wizz, haven’t they? Anything the accountants can get back from whoever took the money will go to pay off part of the outstanding bank loans.

There is no comfort, surely, for ex-Finablr shareholders in either of these reports on ex-Finablr subsidiaries? They were both insolvent and both have been in the hands of their creditors for quite some time. Finablr’s businesses have mostly been bought by Prism for £1 and merged into Wizz, haven’t they? Anything the accountants can get back from whoever took the money will go to pay off part of the outstanding bank loans.

Monty74: the new entity that owns the hospitals, health centres etc. of the former NMC Health plc may apply one day for an LSE listing, it’s possible. Though this time the UK regulatory agencies would want to take a very long look at it first. In any case, it won’t be of any but academic interest to the disenfranchised ex-shareholders of the former FTSE100 company, who have lost their investment. That company has been reorganised and now has new owners.

monty74: NMC is coming out of administration on 16 December and control will then be transferred from the administrators, who’ve been, in effect, running it for the past 19 months or so, to the new owners. These new owners are a consortium of creditors - largely the banks who lost a lot of the money they’d lent to the company when it was allegedly robbed/defrauded. They own the company. They may decide to run it for a while themselves or they may sell it or its assets. The people who owned the shares when it was a FTSE100 company have lost their investment.

The whole thing is an outrage. Dishonesty, lax Board oversight, questions over the audit, absence of effective regulation. I feel extremely sorry for small shareholders in it, they were entitled to honest management of their company and a far more effective regulatory environment.

Leisurely: good luck to them with that. As I understand E&Y (which is not very much) their regional offices are all separately incorporated legal entities. The ADRs are at 5c still, on $200 volume. I don’t think the game is worth the candle in terms of legal action from the shareholders’ viewpoint. Still, the no-win, no-fee lawyers know their business best and it won’t cost the disenfranchised ADR holders anything to join the class actions.

Those are the ADRs. There may be some wrinkle in those whereby someone thinks he can get some money by suing the intermediaries through whom they acquired them. There are generally no such protections in the UK. The ADRs were at .30 or so until quite recently. They were at .04 on Friday. They’re at 0.10 today. Less than $200 turnover.

Leisurely: NMC went bust, allegedly robbed by some of its senior management. There are scores of banks whose secured loans can’t be repaid as things stand. There’s nothing for the old shareholders. A number of class actions were initiated by law firms on behalf of shareholders in the summer of 2020 in the USA but nothing seems to have happened and it’s unlikely in the extreme that enough of the misappropriated money will be found to pay anything to shareholders. One has to remember that NMC shared some senior management with Finablr, an international payments firm. The NMC scandal began to be unveiled in mid-December 2019 with the Muddy Waters report. At the end of that month there was a massive ransomware attack on Finablr’s accounting systems, for the unwinding of which they allegedly paid a large sum to the hackers a couple of months later. It’s entirely possible, it seems to me, that the culprits may have covered their tracks by means of this systems outage.