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Today's RNS reported a high wellhead pressure of 80+ bar. This equivalent to 1176 psi. Previously I calculated the wellhead pressure to be 778 psi. I used an average gas gradient extracted from Google. Obviousely the pressure reported on Angus board of 440 psi was wrong.
The above pressure is an excellent news. It inducate a viable reservoir in SFB and successful field life ahead. I wish I was invested in Angus when the share was 0.7-0.8p. I am not sure now when the next buying oppurtunity will arise. The number of shares in Angus now exceed 2 billion and if you add about 0.5 billion of AAOG it will become more than 2.5b.

OofyProsser
Forest sold SEM 49% of SFB to ANGS but got 21% of total SFB in ANGS. I f you double that number you get slightly less nimber than 49%. But he also got cash £4-5 m. What is important is he got an entity (ANGS) that will develope the field for him. I would not say this is a bad deal. Adding to that he is now a direcror of combined entity ANGUS.
As for being able to use the £42m tax losses, this will depend on result of the oncomming election. He should have sold this problem 2 years ago.

In my previous post 165, I said :
"Tthe Net Present Value (NPV) for Saltfleetby reservoir(ANGS+SEM), based on gas price of £2.24/therm,was calculated to be £250m.
A discount factor was used in the original CPR on each year of future production ( about 10%) to arrive at the above NPV. Therefore the future cash flow is a lot highrt than above NPV of £250m. So Paul Forest must think it was worth hiding AAOG for its tax losses of £42m in spite of the fact that ANGS and SEM have £22m and £27m of tax losses respectively.
AAOG tax losses of £42m could have been reversed in any entity that generate cash flow."
So AAOG yax losses can be used for in ANGS without any problem.

https://www.msn.com/en-gb/news/uknews/the-eight-tory-leadership-candidates-battling-to-replace-boris-johnson-as-next-prime-minister/ar-AAZwkbW

"the Foreign Secretary signalled that she would cut corporation tax, "
Liz Truss among the eight leading prime minister candidates left, promissed reduction of corporation tax.
May be we are not finished as yet.

I still hope we are not completely finished.
On ANGS bulletin board someone reported a wellhead pressure of 440 psi for SFB. Previously I calculated the sxpected wellhead pressure to be 778 psi in my post 163. It is nearly half what I expected in my calculation. Why?????

https://www.theguardian.com/business/2022/jun/19/windfall-tax-seriously-flawed-says-north-sea-oil-and-gas-producer-energy-rishi-sunak?ref=biztoc.com&curator=biztoc.com

In todays Sunday guardian, the chancellor is dictating:
"Companies are not allowed to reduce the tax with losses made in previous years or money spent on decommissioning North Sea oil platforms."

Angus Market Cap £15m

The Net Present Value (NPV) for Saltfleetby reservoir was calculated to be £250m based on gas price of £2.24/therm.
As the gas price now is £1.60/therm, The new NPV is 250 x 1.6 / 2.24 = £179m.
No of bags Angus is capable to produce 179/15 = 12 bags
The gas price is forecasted to go much higher in the future.

In the CPR those rates were calculated (by the computer) against a wellhead pressure of 90psi. I f this wellhead pressure is reduced to say 20psi those flowrate could increase substantially. Also in the North sea the general trend is that the reserves of any fields tend to increase with time as more data and informaion become available. This is why reserves are reported as P90....P50.
Note: I an not invested in Angus.

The production profiles presented in the 2021 CPR (produced by Oilfield International) could only have been produced by reservoir simulation, ie digitalization of the resevoir into the computer. I could not see that Oilfield International has done this work. So it must have been produced by the original operator Gasprom. They thew it away and paid abandonment cost on top of it when the gas price was low.

" the CPR P90 assumes quite a rapid dwindling in production after the first 3-4 years."

The following is CPR 2021:
https://www.angusenergy.co.uk/wp-content/uploads/2021/10/Angus-Energy-Saltfleetby-Reserves-Valuation-Report.pdf

PAGE 45 shows P90 sales gas rate vs time for the year 2022-2038 for the developement plan of 2wells plus a sidetrack. There is still plenty of gas to produce and plenty of revenues to be generated. As there was a delay in first gas the plot must be shifted to the right by one year.
As for windfall tax I thought the Government disagreed with the plan.

Oofy Prosser
On Angus bulletin board, there are skeptics who say how come Paul Forest sold SEM at this particular time. He must know the project is going to fail and he bail out because he knows someething we dont. But also Lucan knows the project just as good and he paid him £4.5 in cash and a big share in the combined entity.

Oofy Prosser
You are talking about operational problems that can be resolved . These happen in all companies all the time. What is important here is that Angus has assets that are in demand and can be commercialsed in the near future. Not a lot of company have that. AAOG offer tax allawance of £42m. This is more than market cap of both ANGS and SEL combined. The only correct course of action is to reverse AAOG into the combined entity. Lucan has never worried about diluting share holders before. Why should he worry now. I hope I am not wrong here. I was not wrong before when I said ANGS and SEL should combine in one entity. Have a good weekend all.

Irish Mouse
Thanks for replying.
Regarding Paul Forest Offy Prosser said “He’s not built a business for shareholders”. I think this is accurate. AAOG could have been reversed into any equity that generates cash flow some two years ago. But he did not do that and I hope that Ms Cope resignation has nothing to do with this. RMP after going bust was reversed into FME in a very short period ot time.
I still think that Angus will be a buying opportunity in the future but only after AAOG shares of about 500 m are dealt with. I calculated the NPV of both ANGS and SEL some time ago and it is equivalent to mid cap company market cap. The future cashflow generated from SFB can absorb tax losses from ANGS,SEL and AAOG.
The gas price is not going to get cheaper with time.

Irish
Do you have an opinion whether it is good or bad, for AAOG, that Cope has gone? She never has been a great help. That is for sure.

The last paragraph should read:
The expected wellhead pressure of SFB is about 778 psi. The resevoir pressure is 1280 psi :while the original reservoir pressure was above 4000 psi.

Here is an attempt to calculate the existing wellhead pressure of Saltfleetby field.
From the following CPR :
https://www.angusenergy.co.uk/wp-content/uploads/2019/12/Saltfleetby-Gas-Field-Dec19.pdf
the following data were extracted:
-Last P/Z value was reported to be 1600 psi
-Average reservoir depth 2300m(7550 ft)
From google:
The gas gradient ranges between 0.003 to 0.130 psi/ft.
The average gas gradient of 0.0665 psi/ft was taken.

The Z factor is always less than 1 and need to be calculated. If we assume it to be 0.8 then the last recorded reservoir pressure would be 0.8 x 1600 = 1280 psi.
The hydrostatic gas coloumn pressure is
7550 x 0.0665 = 502 psi.
By subtracting this from reservoir pressure of 1280 as calculated above we get the existint wellhead pressure:
1280-502 = 778 psi
The expected wellhead pressure of SFB is about 778 psi while the original reservoir pressure was above 4000 psi.

Irish
I was trying to see if I could buy some ANGS shares before dilution but was put off by Oofy Prosser. I am still trying to enter into ANGS but cannot see how the inclusion of AAOG shares would not bring further dilution.

SEM is now absorbed by ANGS. I am hoping that AAOG will not be obsrbed into the setup just yet. I would like first to see the field produces at steady rates to meet the hedge requirements.

Tthe Net Present Value (NPV) for Saltfleetby reservoir(ANGS+SEM), based on gas price of £2.24/therm,was calculated to be £250m.
A discount factor was used in the original CPR on each year of future production ( about 10%) to arrive at the above NPV. Therefore the future cash flow is a lot highrt than above NPV of £250m. So Paul Forest must think it was worth hiding AAOG for its tax losses of £42m in spite of the fact that ANGS and SEM have £22m and £27m of tax losses respectively.
AAOG tax losses of £42m could have been reversed in any entity that generate cash flow.

Also the deliverability of the two wells for the following 3 years might be impaired (for some reason) and fail to meet hedge requirement thereby loosing the whole the field. Drilling a sidetrack will hedge against that as it is life and death situation. This is mere speculation.