RE: gamble20 Dec 2022 10:36
Mr008 09.16 "Because, if the CEO is confident about the SF-07 sidetrack, why not raise funds after the SF-07 sidetrack is complete?"
The CEO may be confident, but he may not have had the time to let the sidetrack produce the cash flow.
The hedge provider may have demanded almost immediate payment of the money due to them from July/August September and ANGS may not have had the money to pay. So my guess is that the hedge provider dictated the terms of the compensation (original money due + penalty+ new hedge) or had the choice of bankrupting the company. It seems likely that the company has sat on the news of the cost of the hedge penalty, while they have been organising the placing.
The conclusion I reach is that until we know the full extent of the penalty payable to the hedge provider - which appears* to be a variable amount dependent on energy prices perhaps, we will not know what the company is worth.
* Appears because the £3.3m " are expected to satisfy the majority (if not all) of the earlier closed hedges" It sounds as if we are waiting to see what gas prices will be over the next few months before we can know what payments have to be made to the hedge provider.
That may mean that if gas prices rise significantly in the months covered by the original hedges the amount to be paid will rise.
I just hope that ANGS have raised enough to cope with that possibility.
Offsetting that worry, is that if prices do rise, the production in excess of the hedged volumes will become worth more and will make the hedge penalty payments easier.
So, much rests on whether the sidetrack is successful .............................As you say - a gamble
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