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Rastuss - gkb erroneously claimed that Angus had always been able to raise money through debt under Paul Vonk via the NEX bonds. I pointed out that he was ill informed as Angus were not generating the revenue required to issue the bonds and pay the interest.
Gkb then doubled down on his error by claiming that Angus did generate revenue from Lidsey and Brockham. I pointed out that he was still wrong as the revenue that they generated was not enough to service the interest, which is why the NEX bonds were never issued.
The new loan is different as it is based on revenue that will incur from Saltfleetby with the loan made up front. It is not difficult to understand.
The 8.5% coupon on £3.5 million worth of NEX bonds would be £297,500 in interest per annum.
The income from Brockham and Lidsey that you claim would have been able to service this debt was £90k in 2016, £0 in 2017, £66k in 2018 and £200k in 2019.
So in short, despite your claims to the contrary in no year of their history would Angus have been able to service the interest (let alone the principle) on the NEX Bonds that you claim they could have issued at any time. In fact, if you added all of the income from Vonk’s years in charge together it would still have been almost £150k short of servicing even one year’s worth of interest on the bonds.
I hate to say it old chap but I think that your losses are a direct consequence of your own poor research.
Says the man who didn't realise that for the bond to be valid the company had to be generating an income....
1) We can expect a production base of 500 barrels per day of oil equivalent at the beginning of next year. This will deliver a significant cash income to the company.
2) We can expect a CPR coming out relatively soon detailing hundreds of millions of barrels of recoverable oil.
3) There is 226 million recoverable barrels in the Patazouli (sp?) field alone.
4) Block are building up an incredibly experienced technical team who will ensure that they do not repeat the problems that they had with Rustavi.
Of course the future is looking bright!
gkb, you do realise that if nobody bought the bond then they were not actually able to lend money against it. The reason that nobody would buy it is, as Ocelot says, that for any bond to have a value then the company much be generating revenue to pay the coupon.
The poor quality of your research may explain why you lost so much money on this stock.
I think that this morning's rebound is clearly a result of the recent big seller having finally got rid of whatever amount that they were selling. It is the only simple explanation I can see for why there should be such a big price rise on no news this morning.
If this is the case then the demand amongst investors is incredibly strong to have absorbed a huge seller and still having demand for more at a higher price once that seller is gone.
gkb, I am afraid that the fact that you lost so much money on Vonk's hype train has blinded you to the future potential of this stock under the current conservative and sensible management.
As I am sure that you are aware it is very different putting all of your investment into a project that has confirmed gas and guaranteed production as opposed to drilling an exploration drill and hoping that it will deliver commercial quantities of oil.
Of course, the latter is far more lucrative to investors if it works but as you have found out to your cost, it does not always work and the reality rarely lives up to the hype. The former (while not enabling shareholders to discuss what colour Ferrari they are going to buy with their £2.00 per share stock price, as happened in the frankly mental days of the Weald bubble) does allow a sensible prediction of future revenues. It is for this reason that Angus are able to borrow £12 million to fund Saltfleetby out of debt, whereas they could never even have begun a conversation about debt funding for one of Vonks’s red or black gambles.
Like it or not, they heady days of the Weald hype has been proven to be no more than hot air. Thankfully Angus have a real project to fall back on which will allow them to generate revenue and then expand into further opportunities with cashflow coming in. It is a very different and altogether more sensible policy than was followed in the past and it will undoubtedly lead to a successful future.
I do feel sorry for those who lost money on the hype here a few years ago but they really should have the humility to accept that they made a poor investment at the time and investing in Angus now at 0.7p with quantifiable gas production just round the corner is a much more sensible investment than chucking it in a couple of years at 20p in the hope that Brockham would be commercial.
Yes, Vonk was a disaster putting all his (our) eggs in one basket with Brockham. Yes, I know he made a few other investments too but Angus under Vonk was always all about Brockham .
However, as others have said here we (or most of us apart from the very small amount of dissatisfied long-term-holders) are not looking to the past and the over-hyped Weald but rather to the future and the very interesting platform of mixed energy resources that George Lucan is building here.
SFB gas will provide a significant income stream to the company even after it has paid off all of the costs of the debt associated with it and will enable the company to finance the purchase of other assets elsewhere. The geothermal projects are a very interesting use of the company's existing expertise and potential way of turning the otherwise useless existing oil licenses into something that can be monetised for green energy. This, as we all know is far more fashionable than fossil fuels and we can expect to see a LOT of money plunged into it over the next few years.
Angus is starting to (finally) correctly monetise it's existing opportunities and positioning itself to benefit from the next wave of energy resources in the UK. A world away from the pump and dump days of the Weald at its peak.
The future here is increasingly exciting.
Head In The Sand - Agreed, that is certainly one way of looking at it but I think that you have a very negative view on the financing. After all, yesterday you were warning us all that Aleph could be a fraud company like the one that Lekoil fell for. I am glad to see that after you have done some research, this concerns is no longer troubling you, but it does suggest that you are somewhat looking for problems.
Another way of looking at the deal would be that Aleph, although full of directors with significant track records at major blue chip companies is a newly formed company in their own right. It has undertaken to work with Angus on raising the £12 million through money from itself and it’s investors and it would be bad for their reputation if they didn’t deliver. This is something that they must have considered before they agreed the MOU and it is a clear sign that the money will be delivered.
Obviously the loan terms for a small cap company like Angus are going to be more expensive than if they were Google but Aleph are keen to be involved on an with the carbon capture and hydrogen development so they believe in the new direction that Angus are going in and want to be part of it.
The kind of people that work at the sort of blue chips that the Aleph directors have worked at do not say that they can do something if they are not sure that they can deliver it.
ivs - I hate making predictions about share prices and when they will go where. However, I do not think that we ill have to wait two years to break previous highs. Once we get the revenue coming in from the gas at the end of this year and then focus on the patty1 well development I think that we ill already be over the previous highs. It is simply a question of when the patty1 development commences.
This share has the potential to fly very high pretty quickly though, otherwise I would not be invested. Jonathan Bedford summed the potential up yesterday:
1) We can expect a production base of 500 barrels per day of oil equivalent at the beginning of next year. This will deliver a significant cash income to the company.
2) We can expect a CPR coming out relatively soon detailing hundreds of millions of barrels of recoverable oil.
3) There is 226 million recoverable barrels in the Patazouli (sp?) field alone.
4) Block are building up an incredibly experienced technical team who will ensure that they do not repeat the problems that they had with Rustavi.
Geowiz also makes a very good point below the huge acreage that they now have makes it an ideal opportunity to get a farm-in partner to cover most of the cost of the new wells. I seem to recall Haywood was even talking about doing this on a well by well basis rather than a whole license basis and providing he could get others to agree to this it would be a great solution for Block.
So in short, I don't want to predict the share price in two years time but I would be surprised if we do not surpass previous highs by the end of H1 2021.
If Angus can end up doing gas, geothermal and also be involved in hydrocarbon then they have managed to put themselves in the most fashionable and fast-growing sector of global energy. Having a foot in both carbon and carbon neutral camps is a good idea especially when the fossil fuel side of things is gas, which is the cleanest form of energy.
Now Angus look like they have gotten SFB funded then if they can get involved in the green energy side of things too it looks like they could have a big opportunity to completely reinvent the company away from the disaster it was under Vonk and then do what was always intended - help to fulfil powering the UK's energy needs from energy produced in the UK.
In any of the different company message boards on this site there are always a small number of dissatisfied long-term holders who have nothing good to say about the company that are invested in. Strangely enough they are always amongst the most vocal on these messageboards.
Ignore them, they are the last people that you should be taking advice from. if they were any good at investing they would not have gotten themselves in the mess where they were so underwater. Generally, if you do the opposite of what they say then you will win more than you lose.
Read the RNS yourself. The company are nearly there on acquiring all of the funding that they need in order to take them through to first gas. and a totally separate entity are going to put $12 million of their own money in to do it as they know that they will make money. It's that simple.
CAPEX costs all come back over time - such as when they are monetising the Schlumberger assets in the future. it is all well and good to talk about ignoring the gas but at $120k per month that quickly adds up to be a valuable asset. Is it going to turn the company around on its onw - of course not but it is twice the annual salary of the directors so it is not to be sniffed at.
As my grandfather used to say to me - if you take care of the pennies, then the pounds will take care of themselves.
This seems to me like it is good news for a small company in the middle of a major turnaround. Acquiring the debt funding means that they have the money to carry through Saltfleetby through to first gas and that Aleph believe in the project enough to put their money in to back it.
All excellent news. I have to hand it to George Lucan, it has taken some time but he does appear to be turning the Angus ship around and setting it on a course where we can all make some money in future.
Demand has to increase for the cuts to have an effect. However, once they kick in I would expect to see much more than a gradual improvement.