Member Info for Peterashbeck

I assume that the two parties who have acquired 7% of the company over the last few days will expect not to have to hold too long to start seeing a return on their investment but even if you are spiked just now I would not worry about it, as I can’t see that we will be at these levels for long.. As we have seen this morning and Friday, when this moves it really flies and there is big money to be made when it does.

This has already shown it has the to move fast legs and when any significant buys come in it is going to fly. The two TR1s that have been released show that approx. 7% of shares have recently been bought and this has driven the share price up to more than double, and at the spike almost treble.

The key point is that because there are so few shares in issue then this 7% that has been bought and announced only equates to 3.3 million shares traded or less than £300k even at the current price. I think that the price will settle around here for now but as soon as any news comes in or additional buys arrive then we can expect it to do a similar rise again. After all, the market cap is still only £4 million.

I said on Friday that with under 50 million shares in issue that this would go like a rocket but I was not expecting a 100% rise today. Imagine what is going to happen when they announce that an asset has gone in this. It has huge potential. I am going to increase my position here significantly today. Just need to time it right.

Which means the perfect time for a good entry point, even with Friday's rise. As has been mentioned below, with under 50 million shares in issue and even less in the free float, this will go up like a rocket when any news come out. Potential to multi-bag in short order here.

Not bad for a SPAC. I'll be keeping an eye on this one.

Thanks HITS - much appreciated.

I am trying to update my calculations and cannot find where to source the month by month gas production figures for Angus but I keep seeing that other people have got them on twitter. Could anyone help me out by providing the link please? Thanks very much.

DRB83 - the hedge volumes can be seen on page 49 of the Saltfleetby Reserves Valuation Report here: https://www.angusenergy.co.uk/wp-content/uploads/2021/10/Angus-Energy-Saltfleetby-Reserves-Valuation-Report.pdf

DRB83 – I made a spreadsheet on this ages ago based on the figures that Angus published for the hedge (they are available on the company website somewhere).

The total amount of gas hedged in therms between July 2022 (the start) and June 2023 is 18,120,397 (an average of 1,812,040 therms per month). At a production rate of 5.88 mmscf/d then this would give a total production between September 2022 and June 2023 of 18,389,357 which is more than enough to cover the hedge.

In terms of cash generated, remember that the value of the hedged gas over this time period delivers Angus £8 million and then the excess of 268,960 would deliver another £2 million at an average price of £6.93 per therm. So I would expect Angus to make £1 million per month over the next 10 months without the sidetrack and at these current production rates. This is more than enough to both service the loan and to cover the cost of drilling the sidetrack.

So the flow rate from B2 is 3.06 MMSCF and the flow rate from A4 is 2.82MMSCF which means a total production of 5.88MMSCF per day. This is more than enough to meet all of the hedge requirements going forwards even without the sidetrack. Job done boys, its now just a case of counting the cash and then drilling the sidetrack to up the income to £50 million + per year.

Head In the Sand, I am well aware of what the value of the production is in therms and have posted the calculations before, but just in case you need to be reminded here it is in simple terms.

1. The total value of the gas sold to the hedge is £8 million regardless of the price of gas. On top of this you have an excess of 644,253 therms over the hedge (at 6mmscf/d) which would be worth approx. £4.5 million at the average forward gas price of £6.93. Total £12 million but likely to be a little more so more as due to the re-arrangement of the hedge there will be more market gas sold in the winter period (higher priced) than I have budgeted for.

2. I am absolutely aware of what the hedge is in therms, it seems however that you are not. The total amount of gas hedged in therms between July 2022 (the start) and June 2023 is 18.120.397 (an average of 1,812,040 therms per month). At a production rate of 6 mmscf/d then this would give a total production between September 2022 and June 2023 of 18,764,650, hence the free 644,253 therms to be sold on market I mentioned earlier.

3. At the 7mmscf/d that you mentioned earlier this would give a total production (between Sept 22 – June 23) in therms of 21,892,092. If we subtract the therms hedged from this we get a remained to be sold on market of 3,771,695. Once again using the average price of £6.93 per therm then this give a profit of 3,771,695 * £6.93 = £26,175,561. Add on the guaranteed £8 million from the hedged amount of money and you get £34,175,561. It’s really not complicated.

As for your comment that you never said that it would only produce at 2.4mmscf/d that is not my recollection of things at all. My memory is of you mentioning more than once that the official OGA figures showed average production of 2.4 mmscfd over the last several months of the field being in production, but having had a quick look through your post history I cannot find the actual posts, so if you maintain that you never said this then I am happy to apologies and take your word for it. You definitely said on more than one occasion that Angus would need a successful sidetrack in order that they meet the hedge requirements though – I assume that you agree that you said this?

"The claim made was that the first well was producing 10 million cubic initially by itself (and it categorically isn't).

Howey, you may be right, but then again ANGS's RNSed statement is literally crystal clear and thus just a tad tricky to misinterpret accidentally.

Regardless, the key figure to know is consistent/"normalised" flow from both existing wells combined."

HITS – it is nice to see you mentioning that Saltfleetby could produce 10mmscf/d without drilling a sidetrack, especially since you spent so long telling us all that it was just Poundland and would never produce more than 2.4mmscf/d.

Personally, I think that with the decline the two current wells will only produce a total of about 7mmscf/d. At this rate, all of the missing hedged amount would be covered by mid-November and then by June the company would make £26 million in market sales and an additional £8 million in the hedged money.

Then on top of this we have the sidetrack, but depending on how well the other two wells produce this may not even be necessary since we know that the maximum production capacity for the equipment is 10mmscf/d.

Penguins’ post has just made me realise that I made a very large error in the calculations that I posted earlier. I was so focused on how long it would take to pay off the hedge with the missed July and August amounts rolled over to next year that I completely forgot to include any revenue from the hedge itself and over the course of the next 9 months (from September to June) this amounts to another £8 million which I had not accounted for.

Obviously this takes us up to a revenue of £15 million between now and June 2023 even without the sidetrack.

In a minor correction to my first post it should be noted that in the Q1 & Q2 production sections I mentioned the monthly production rate not the quarterly one. This should obviously be multiplied by three to get the correct number. Apologies.

Going forward

From August 2023 onward if the gas price continues at this average (£6.93) and with the hedged amount dropping to 4.5 mmscf/d until the end of the year then Angus will make a further £23million in H2 2023 and this is still only at production of 6 mmscf/d.

Even assuming that the gas price drops right back down to £2.50 per therm then Angus will make an additional £10 million in H2 without the sidetrack.

So in short, without the sidetrack coming online then Angus will make between £17.8 million and £27 million by the end of 2023 dependent on gas prices.

If the sidetrack does come online on Jan 1st 2023 and production increases to 10mmscf/d then the numbers change radically. Production in Q3 & 4 2022 would remain the same as before but production in Q1 2023 would pay off all of the amount hedged by the middle of January and leave an excess of nearly 1 million therms by the end of that month. By the end of June 2023 then the excess production would be 8,150,113 therms which would mean a total revenue between September 2021 and June 2023 of £56 million to Angus (at £6.93 per therm).

If the gas price continued to be 6.93 per therm throughout the rest of 2023 then Angus would show an H2 revenue of £62 miillion.

So there is no ttightness on cashflow whatever happens, instead there is just the option of good revenue of absolutely spectacular £100 million + revenue.

No Head In the Sand, no I had not confused mmscfd and monthly production, but I had however, forgotten to put in the excess hedged amounts that needed to be added between September 2022 and June 2023 which does have a small (£4.2 million) affect on the revenue generated over the next 9 months and means that the minimum amount of money that Angus can make is actually £7.8 million at 6mmscf/d rather than the £12 million I originally quoted.

In order that there is no further confusion about the calculations I explain all of the workings belos

6mmscf/d translates into 1,876,465therms per month.
The hedged volumes per day were (as per Angus’ documentation)

Jul-22 3.34 MMSCF 1,044,566 therms hedged per month
Aug-22 3.34 MMSCF 1,044,566 therms hedged per month
Sep-22 3.45 MMSCF 1,078,967 therms hedged per month
Oct-22 5.19 MMSCF 1,623,142 therms hedged per month
Nov-22 5.37 MMSCF 1,679,436 therms hedged per month
Dec-22 5.19 MMSCF 1,623,142 therms hedged per month
Jan-23 5.19 MMSCF 1,623,142 therms hedged per month
Feb-23 5.75 MMSCF 1,798,279 therms hedged per month
Mar-23 5.19 MMSCF 1,623,142 therms hedged per month
Apr-23 5.37 MMSCF 1,679,436 therms hedged per month
May-23 5.19 MMSCF 1,623,142 therms hedged per month
Jun-23 5.37 MMSCF 1,679,436 therms hedged per month
Jul-23 4.45 MMSCF 1,391,712 therms hedged per month

So in total there hedged amount was originally

Q3 2022 there was 3,168,098 therms hedged
Q4 2022 there was 4,925,721 therms hedged
Q1 2023 there was 5,044,563 therms hedged
Q2 2023 there was 4,082,015 therms hedged

Obviously there has been no production in July and August and production will only commence for September now so this means that Angus start with 2,089,131 thems owed to the hedge.

At 6mmscf/d starting in September this means production of

Q3 2022 there will be production of 1,876,465 therms (down 1,291,633 therms on where the hedge should be)

Q4 2022 there will be production of 5,629,395 therms (down 587,959 therms on where the hedge should be)

Q1 2023 there will be production of 1,876,465 therms (down 3,127 therms on where the hedge should be)

Q2 2023 there will be production of 1,876,465 therms (up 1,129,066 therms on where the hedge should be)

So over the course of this 9 months then Angus will produce 1,129,066 therms more than they owe the hedge and all of this can be sold at market rates.

To calculate afinancial value on this then we take the average of the expected gas prices between September 2022 and June 2023 then we get an average price of £6.93 pence per therm and the multiplication of these two numbers means an income of £7.8 million.

HITS – as ever, some of your post is accurate but claiming that with the hedge at 5.8 it will be a drain on working capital until the sidetrack is drilled is simply untrue.

If Angus get 6mmscf/d out per month and the first two quarters have 5.8 mmscf hedged the this means (at the current gas price of £5.70 per therm) that they will generate £1.9 million in operational profit from the hedged sales and an additional £700k from the market sale of the excess giving them an income over the two months of £2.6 million. (£1.3 million per month).

Even if we assume that the hedge remains at 5.8 all the way until the end of Q2 2022 then with the forward prices as they are:

September £5.70
October £6.30
November £1.15
December £7.87
January £7.80
February £7.80
Q2 £6.68

This will mean that the company will generate £12.3 million in operational profit over the next 9 months without the sidetrack.

If the sidetrack is successful and brings production up to the 10mmscf/d level that George has talked about previously then even if this only happens at the beginning of January the revenue generated will go through the roof:

Sept- Dec at production of 6mmscf/d would generate a revenue of: £5.2 million and Jan-1 June (at 10mmscf/d production) would generate a revenue of: £65 million.

In short, even without the sidetrack then revenue and cashflow is comfortably profitable even at a hedge of 5.8mmscf/s every month, but with the sidetrack in place it goes from comfortable to raining cash.

The company have said on a number of occasions that they will produce enough gas at Saltfleetby to cover the highest levels of the hedge even without drilling the sidetrack. This is what their analysis has told them and this is what convinced Aleph etc to lend them the money in the first place. Given that most figures that are operated on for financial reasons are very conservative I expect the gas output to comfortably exceed the hedge values. Remember, that these were done at the same time as the loan was being sorted out and so if they had thought that there was any danger of not easily exceeding the hedge then they juts would have made the hedge numbers smaller and for a longer time.

All of this stuff about will they won't they make the hedge is just nonsensical scaremongering. Of course, once they drill the sidetrack and get the production levels up to 10MMSCFd then they will be able to really take advantage of the new gas price levels and at a point in time when they are also getting to keep 100% of the revenue.

HITS – I realise that the second half of the Aleph group package requires shareholder approval which is why I wrote that: “ only half of them have been formally issued yet as the remaining 273 million (plus 173.1 million warrants) require shareholder’s approval which will be given at the General Meeting on Monday 13th June.” I agree with your second statement though – this approval is indeed no more than a formality.

As for your query as to why Aleph are only listed as showing holding 7.19% on the Significant Shareholders section of the Angus website, I think that this is a very sensible question, but in my opinion it also has a very simple answer.

If you notice in my original post I mentioned the shares as being allocated to the “Aleph group” not to Aleph themselves. This is because in the “Acquisition of 49% interest in Saltfleetby” RNS it specifies that the £6million is raised “with a group of family offices and private investors led by Aleph”. In short, Aleph did not come up with 100% of the £6 million and therefore they do not control 100% of the 546 million shares.

My reading on this is that Aleph have not sold any shares but in the first tranche of shares issued they only own 7.19% and the rest are owned by the private investors and family offices mentioned above – though all presumably owning less than would be required to issue a TR1. My assumption (but this is only a guess) is that Aleph will be issued a further 7.19% when the second tranche of shares are approved and that they will hold onto this as well. Remember, that the key point for Aleph is that they only have the right to appoint two non-exec directors to the Angus board as long as they own above 10% of the company so I would be surprised if they sold any of their allocated shares in the near future.

Whether deliberate or unintentional there seems to be some degree of confusion over the amount of shares that are going to be issued and the (slightly bizarre inference that there is going to be another placing). If you read through the two RNSs that have been issued (the acquisition of Saltfleetby and the Notice of GM) then all of the information is there, however it is a little confusing so for clarity here is the explanation.

1) There is not going to be a further placing above the £6 million that has already been announced in the RNS of the 24th May. Every one of the 546 million shares that are allocated to the Aleph group as part of the £6 million investment is taken up, but only half of them have been formally issued yet as the remaining 273 million (plus 173.1 million warrants) require shareholder’s approval which will be given at the General Meeting on Monday 13th June.

2) The board are also asking for approval at the GM to be permitted to issue a further 682,438,000 shares should they need to (basically in order cover the Saltfleetby covenants). Out of this 682,438,000 they are also asking for permission to sell up to 341,219,000 into the market to raise capital should this be required in the future. However, if is important to note that this comes out of the 682 million and is not in addition to the 682 million. It is also important to note that this is absolutely standard behaviour amongst listed companies. All of them need to have the flexibility to issue shares for the board to make purchases without holding a GM to approve this every time.

The placing for £6 million has already happened. The shares have been sold and the market knows this and is expecting them to be issued. The approval to issue further shares is just standard practice for listed companies – after all there would be no point in running a listed company if you could not issue shares in it. Inevitably some more shares will be issued at some time in the future but they would presumably be related to future acquisitions or covenant requirements and it is definitely not something we need to be concerned about in the near-term. Before they start thinking about issuing any more shares the company simply need to get on with generating cash out of Saltlfeetby and with the 49% acquisition, at least 100% of this cash is now coming to Angus.