TIDMANGS
RNS Number : 7167Q
Angus Energy PLC
30 June 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT
FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018 ("MAR"), AND IS DISCLOSED IN ACCORDANCE WITH
THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF MAR.
30 June 2022
Angus Energy Plc
("Angus Energy", "Angus" or the "Company")
Interim Accounts for the six months ended 31 March 2022
Angus Energy is pleased to announce its interim accounts for the
six months ended 31 March 2022 as set out below. A copy of the
Interims is available on the Company's website
www.angusenergy.co.uk
.
Enquiries:
Angus Energy Plc www.angusenergy.co.uk
George Lucan Tel: +44 (0) 208
899 6380
Beaumont Cornish www.beaumontcornish.com
(Nomad)
James Biddle/ Roland Tel: +44 (0) 207
Cornish 628 3396
WH Ireland Limited
(Broker)
Katy Mitchell/ Harry Tel: +44 (0) 113
Ansell 394 6600
Flagstaff PR/IR angus@flagstaffcomms.com
Tim Thompson Tel: +44 (0) 207
129 1474
Fergus Mellon
Aleph Commodities info@alephcommodities.com
Notes
About Angus Energy plc
Angus Energy plc is a UK AIM quoted independent onshore Energy
Transition company with a complementary portfolio of clean gas
development assets, onshore geothermal projects, and legacy oil
producing fields. Angus is focused on becoming a leading onshore UK
diversified clean energy and energy infrastructure company. Angus
Energy has a 100% interest in the Saltfleetby Gas Field (PEDL005),
majority owns and operates conventional oil production fields at
Brockham (PL 235) and Lidsey (PL 241) and has a 25% interest in the
Balcombe Licence (PEDL244).
Important Notices
This announcement contains 'forward-looking statements'
concerning the Company that are subject to risks and uncertainties.
Generally, the words 'will', 'may', 'should', 'continue',
'believes', 'targets', 'plans', 'expects', 'aims', 'intends',
'anticipates' or similar expressions or negatives thereof identify
forward-looking statements. These forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from those expressed in the forward-looking
statements. Many of these risks and uncertainties relate to factors
that are beyond the Company's ability to control or estimate
precisely. The Company cannot give any assurance that such
forward-looking statements will prove to have been correct. The
reader is cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
announcement. The Company does not undertake any obligation to
update or revise publicly any of the forward-looking statements set
out herein, whether as a result of new information, future events
or otherwise, except to the extent legally required.
Nothing contained herein shall be deemed to be a forecast,
projection or estimate of the future financial performance of the
Company.
Chairman's Statement
Dear shareholders,
I am pleased to share with you the interim results for the six
months ended 31 March 2022.
Operational Highlights
Saltfleetby
On 24 May 2022, the Company executed a share purchase agreement
to acquire the entire issued share capital of the Company's current
joint venture partner in the Saltfleetby Project (the "Project"),
Saltfleetby Energy Limited, which owns a 49% working interest in
the Project thereby giving Angus Energy a 100% interest in the
Project.
With all equipment necessary to export gas now on site, the
process has been handed over to commissioning specialists. With the
leak testing complete, commissioning is expected to take between
one and two weeks with a target date for first gas export (ie
sales) between the 7th and 12th July.
Angus looks forward to providing updates via Twitter, Linked-In
and RNS Reach on detailed progress through the remainder of the
commissioning sequence.
Geothermal
The Company continues to progress its ambitions of becoming a
low-cost UK producer of baseload geothermal power. The Company
previously completed a desk top based study which identified an
area with the highest heat flow in SW England. In July 2021 the
company acquired radiometric data over the area of interest.
Austinbridgeporth Limited, in conjunction with Imperial College
successfully carried out a land gravity and radiometrics survey
over a 35km(2) area of interest. The gravity data was recorded at
200m intervals along the survey lines with spacing of 250m and a
total of circa 700 stations were acquired. The newly acquired data
has an increased coverage of data points compared to available data
and therefore a more accurate representation of the subsurface. On
the back of these results the company has entered discussions with
five landowners progressed to negotiating draft heads of terms to
enter into land leases.
Brockham
The application to the Environment Agency for permission to
re-inject formation water to maintain pressure in that reservoir to
gain maximum hydrocarbon recovery was issued on 02 March 2022.
Subsequently the Company has recommenced oil production and water
reinjection in the Portland reservoir. Current average rates of
production from the BRX2-Y well are 50 barrels of oil per day (net
40 bopd to Angus) with an approximately equal amount of formation
water produced and reinjected daily into BRX3.
Plans for a reperforation of the BRX4-Z well in the Portland
reservoir, which would also involve abandonment of the Kimmeridge
layer in that well, for which planning permission was recently
obtained, are being discussed with our other regulators.
Balcombe
Despite the West Sussex County Council Planning Officer's
decision to recommend approval of the Company's application for a
one year extended well test at the Company's oilfield site at
Balcombe the West Sussex County Council's Planning Committee has
rejected the Company's planning application for an Extended Well
Test. Angus strongly disagrees with their opinion and an
application to appeal was submitted in October 2021. Amongst other
things, the appeal references the local and national planning
policies referred to by the Planning Committee and why both Angus
and the Planning Officer believe the development is acceptable when
it is considered against the development plan and any relevant
material considerations. In summary the principle of the
development has been previously accepted, the site selection
represents the best environmental option and is safeguarded, energy
Policy states that the domestic oil and gas industry has a critical
role in maintaining the country's energy security and is a major
contributor to our economy and minerals are given great weight with
the extraction of hydrocarbons seen as central to the UK energy
policy in the immediate and long-term future. In light of the above
and the current energy crisis we find ourselves in, the Angus
management team are confident that the appeal will be
overturned.
Lidsey
The Company completed the reprocessing and reinterpreting of the
Lidsey seismic data. One of the conclusions of the work is that
previous seismic mapping both underestimated the aerial extent of
the reservoir and most importantly its shape. The Company therefore
acquired a new line of seismic data and reprocess the existing
seismic lines.
The Company's seismic reinterpretation of the Lidsey field was
completed and, has been subject to rigorous third party
verification. The new mapping shows there to be a significant
structure not dissimilar in area to the original structure
considered by the previous Competent Person's Report, which
continues to support a commercially significant estimate of oil in
place. However, the interpretation does allow Angus to narrow its
field of focus in target selection and explore low-cost options for
remediation of the field's productivity centre around the reuse,
workover or side-tracking of the existing wells and these will be
considered with our partners in the next stage of the work.
Financial Highlights
The Group recorded a loss of GBP31.750m for the period, which
included an unrealized loss of GBP30.459m in relation to the
derivative instrument, resulting in an adjusted loss of GBP1.291m
(2020: GBP1.479m). As per note 3(e) in the Audited Annual Accounts
to 30 September 2021, the Group uses derivative financial
instrument, to hedge its commodity price risk, such as commodity
swap contracts. The Group has elected not to apply the hedge
accounting on this derivative. Derivative financial instruments are
recognized at fair value on the date on which the contract is
entered into and subsequently measured at fair value. Derivatives
are carried as financial assets when the fair value is greater than
its initial measurement and financial liabilities when fair value
is negative. Any gains or losses arising from the changes in fair
value of the derivatives are recognised in the statement of profit
and loss and other comprehensive income, as recorded in this period
and further detailed in note 11 below.
On 20 October 2021, and further to the RNS of 20 April 2020,
detailing the terms of a GBP1.4m Convertible Loan Note repayable on
17 April 2022, the Company announced that the holder, Knowe
Properties Limited, had agreed to extend the final mandatory
repayment date by a further 12 months until 17 April 2023.
The Note, which was otherwise convertible at 1p per ordinary
share from 17 February 2022, will now only be convertible at the
earliest of 17 July 2022. Additionally, the Company retains the
right to repay the Note at any time with the additional grant of
warrants at 1.3p per share as detailed in the RNS of 20 April 2020.
All other terms of the Note remain the same. In consideration for
this extension the Company issued to the Noteholder 11,200,000
ordinary shares (the "Shares") in the Company for nil
consideration.
On 3 December 2021, the Company raised gross proceeds of
GBP750,000 through the placing of 115,384,611 Ordinary Shares to
certain institutional and other investors at a price of 0.65 pence
per share.
On 6 January 2022, the Company announced that it was undertaking
a review of the strategic options. These options include, but were
not limited to, a sale of the Company which will be conducted under
the framework of a "formal sale process" in accordance with the
Takeover Code.
On 4 February 2022, the Company raised gross proceeds of
GBP1,400,000 through the placing of 175,000,000 Ordinary Shares to
certain institutional and other investors at a price of 0.8 pence
per share.
On 9 March 2022, and further to the announcement of 9 June 2021,
the Company announced that it had reached a settlement agreement
with a financial services provider (not being the Company's broker
or Nomad) with whom it has been in dispute relating to the
Saltfleetby Loan Facility. As part of this settlement agreement the
Company issued 39,200,000 ordinary shares.
On 8 April 2022, the Company announced that whilst it will
continue its strategic review at the asset level only, it has ended
the "formal sale process" of the Company which it had commenced
previously in accordance with Rules 2.4 and 2.6 of the Takeover
Code. Accordingly, the Company is no longer in an offer period as
defined by the Takeover Code.
On 11 April 2022, the Company raised gross proceeds of
GBP675,000 through the placing of 61,363,634 Ordinary Shares to
certain institutional and other investors at a price of 1.1 pence
per share.
On 24 May 2022, the Company announce that it has executed a
share purchase agreement to acquire the entire issued share capital
of the Company's current joint venture partner in the Saltfleetby
Project, Saltfleetby Energy Limited, which owns a 49% working
interest in the Project thereby giving Angus Energy a 100% interest
in the Project. To fund the Acquisition and other working capital
requirements, the Company had concurrently arranged a direct
subscription with affiliates of Aleph International Holdings (UK)
Limited pursuant to which Aleph has subscribed for a total of
546,000,000 Ordinary Shares in the Company at a price of 1.0989011
pence, being GBP6,000,000 (Direct Subscription) split into an
initial unconditional tranche of GBP3,000,000 and a second tranche
of GBP3,000,000 conditional on Shareholder approval.
Summary of the Acquisition
The Company has executed a share purchase agreement to acquire
the entire issued share capital of the Target from Forum Energy
Services Limited. The total effective consideration payable
pursuant to the SPA is the sum of GBP15,452,000, which
comprises:
-- GBP250,000 to be paid in cash at Completion;
-- the issue of 91 million Ordinary Shares at 1.0989011 pence per share at Completion;
-- the issue and allotment of the 546,000,000 Ordinary Shares at
a price of 1.2 pence per Ordinary Share at Completion; and
-- up to GBP6,250,000 in deferred consideration to be paid in
instalments from net cash payments to Angus Energy from the Project
through to 31 March 2025 (and subject to an upward or downward net
cash adjustment) as and when those payments would have been
available to SEL under the Company's Senior Debt Facility of May
2021.
Following completion of the Acquisition, the Group now owns a
100% working interest in, and will continue to be the operator of,
the Saltfleetby Licence.
As at 31 March 2022, Angus Energy recognised 100% of the
liabilities of the Debt Facility and Derivative Liability relating
to the Saltfleetby Field, thereby reporting liabilities of GBP12
million owed under the Debt Facility and a Derivative Liability of
GBP85.493 million. Angus Energy recognised a debtor of GBP6.372
million and GBP41.892 million in respect of these last two amounts,
thereby accounting for SEL's 49% interest. Following completion of
the Acquisition, Angus Energy will recognise 100% of the Project
revenues, costs and liabilities with no farmee interest
represented.
As at 31 March 2022 the Group had cash of GBP1,441,340.
Outlook
With the Saltfleetby project shortly to be flowing gas, we look
forward to steady production before the drilling on the SF7
Sidetrack. As we continue to work hard to achieve this, we remain
focused on delivering value from all the assets in our portfolio,
which includes our Geothermal project. Together with our funding
partners we are well placed to take the Company forward and achieve
our objectives.
Lord Clanwilliam
Non-Executive Chairman
29 June 2022
ANGUS ENERGY PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 31 March 2022
Six months Six months
31 March 31 March
2022 2021
Note Unaudited Unaudited
GBP'000 GBP'000
Revenue 4 27 -
Cost of sales (37) (166)
----------- -----------
Gross Loss (10) (166)
Administrative expenses (1,228) (1,196)
Share based payment charge - (81)
Operating loss (1,238) (1,443)
Derivative Financial Instrument loss (30,459) -
Finance cost (53) (36)
Loss on ordinary activities before
taxation (31,750) (1,479)
Income tax expense - -
----------- -----------
Loss for the period attributable
to the
equity holder of the Company (31,750) (1,479)
=========== ===========
Loss per share (EPS): GBP GBP
Basic and diluted (whole GBP's) 12 (0.029) (0.002)
=========== ===========
ANGUS ENERGY PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 March 2022
As at As at As at
31 March 31 March 30 September
2022 2021 2021
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 5 9 11 8
Exploration and evaluation
assets 6 16,465 9,499 13,073
Oil production assets 7 6,572 6,493 6,534
Leases 11 23 11
Trade and other receivables 8 20,139 - 11,117
----------- ----------- --------------
43,196 16,026 30,743
----------- ----------- --------------
Current assets
Trade and other receivables 8 28,386 760 5,132
AFS finance investments 27 - 28
Cash and bank balances 1,441 591 6,160
----------- ----------- --------------
29,854 1,351 11,320
----------- ----------- --------------
Total Assets 73,050 17,377 42,063
=========== =========== ==============
Equity
Share capital 13 2,615 1,833 1,933
Share premium 13 25,251 23,272 23,605
Merger reserve (200) (200) (200)
Loan Note reserve 106 106 106
Accumulated loss (59,213) (13,445) (27,463)
----------- ----------- --------------
Total Equity (31,441) 11,566 (2,019)
=========== =========== ==============
Current liabilities
Trade and other payables 9 2,632 1,576 1,974
Loan payable - current 10 3,600 - 1,500
Derivative liability -
current 11 44,393 - 3,083
50,625 1,576 6,557
Non-current liabilities
Provisions 16 3,007 3,007 3,007
Trade and other payables 1,359 1,228 1,331
Loan payable - non current 10 8,400 - 10,500
Derivatives Liability
- non current 11 41,100 - 22,687
----------- ----------- --------------
Total non-current liabilities 53,866 4,235 37,525
----------- ----------- --------------
Total liabilities 104,491 5,811 44,082
=========== =========== ==============
Total Equity and Liabilities 73,050 17,377 42,063
=========== =========== ==============
ANGUS ENERGY PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 March 2022
Share Share Merger Loan Note Retained Total
Capital premium Reserve reserve Earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 October
2020 1,430 21,982 (200) 106 (12,047) 11,271
-------- -------- -------- ----------- ---------- --------
Loss for the period - - - - (1,479) (1,479)
Total comprehensive income
for the period - - - - (1,479) (1,479)
-------- -------- -------- ----------- ---------- --------
Transaction with owners:
Issue of placing shares 403 1,405 - - - 1,809
Less: issuance costs - (115) - - - (115)
Granted of options and
warrants - - - - 81 81
-------- -------- -------- ----------- ---------- --------
Balance at 31 March 2021 1,833 23,272 (200) 106 (13,445) 11,566
======== ======== ======== =========== ========== ========
Balance at 1 October
2020 1,430 21,982 (200) 106 (12,047) 11,271
Loss for the year - - - - (15,598) (15,598)
-------- -------- -------- ----------- ---------- --------
Total comprehensive income
for the year - - - - (15,598) (15,598)
-------- -------- -------- ----------- ---------- --------
Transaction with owners:
Issue of shares 503 1,770 - - - 2,273
Less: issuance cost - (147) - - - (147)
Granted of share option - - - - 182 182
-------- -------- -------- ----------- ---------- --------
Balance at 30 September
2021 1,933 23,605 (200) 106 (27,463) (2,019)
======== ======== ======== =========== ========== ========
Loss for the period - - - - (31,750) (31,750)
-------- -------- -------- ----------- ---------- --------
Total comprehensive income
for the period - - - - (31,750) (31,750)
-------- -------- -------- ----------- ---------- --------
Transaction with owners:
Issue of placing shares 682 1,802 - - - 2,484
Less: issuance costs - (156) - - - (156)
Granted of options and -
warrants - - - - -
-------- -------- -------- ----------- ---------- --------
Balance at 31 March 2022 2,615 25,251 (200) 106 (59,213) (31,441)
======== ======== ======== =========== ========== ========
ANGUS ENERGY PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 31 March 2022
Six months Six months
31 March 31 March
2022 2021
Unaudited Unaudited
GBP'000 GBP'000
Cash flow from operating activities
Loss before taxation (31,750) (1,479)
Adjustment for:
Derivative financial loss 30,459 -
Interest payable 53 36
Share based payment charge - 81
Depreciation and amortisation charges 2 3
Operating cash flows before movements
in working capital (1,236) (1,359)
(Increase) in trade and other receivables (3,011) (151)
Increase / (Decrease) in trade and other
payables 633 (27)
Lease principal repayment - (12)
Cash used in operating activities (3,614) (1,549)
Income tax paid - -
----------- -----------
Net cash used in operating activities (3,614) (1,549)
----------- -----------
Cash flows from investing activities
Changes in Investment in share 1 -
Acquisition of exploration and evaluation
assets (3,392) (1,316)
Acquisition of fixed assets and oil
production assets (42) (89)
Net cash used in investing activities (3,433) (1,405)
----------- -----------
Cash flows from financing activities
Net proceeds from issue of share capital 2,328 1,693
Net cash generated from financing activities 2,328 1,693
----------- -----------
Net increase in cash & cash equivalents (4,719) (1,261)
Cash and equivalent at beginning of
year 6,160 1,852
----------- -----------
Cash and equivalent at end of period 1,441 591
=========== ===========
NOTES TO THE FINANCIAL INFORMATION
1. GENERAL INFORMATION AND PRINCIPAL ACTIVITIES
Angus Energy Plc (the "Company") was incorporated in United
Kingdom as a limited company with company number 09616076. The
registered office of the Company is Building 3, Chiswick Park, 566
Chiswick High Road, London, W4 5YA, UK.
This financial information is for the Company and its
subsidiaries undertakings (together, the "Group").
The principal activities of the entities of the Group are as
follows:
Country of
Name of Company Incorporation Principal Activities
i) Angus Energy Holdings UK United Kingdom Investment holding
Limited company
ii) Angus Energy Weald Basin United Kingdom Investment holding
No. 1 Limited company
iii) Angus Energy Weald Basin United Kingdom Investment holding
No. 2 Limited company
iv) Angus Energy Weald Basin United Kingdom Oil & Gas extraction
No. 3 Limited for distribution to
third parties
The principal place of business of the Group is in United
Kingdom.
The interim consolidated financial information is presented in
the nearest thousands of Pound Sterling (GBP'000), which is the
presentation currency of the group. The functional currency of each
of the individual entity is the local currency of each individual
entity.
2. BASIS OF PREPARATION
The interim consolidated financial information for the six
months ended 31 March 2022 and 31 March 2021 have been prepared in
accordance with IAS 34, Interim Financial Reporting which are
unaudited and do not constitute a set of statutory financial
statements.
The principal accounting policies used in preparing the interim
results are the same as those applied in the Group's financial
statements as at and for the year ended 30 September 2021, which
have been prepared in accordance with International Accounting
Standards in conformity with the requirements of the Companies Act
2006. The auditors' report on those accounts was unqualified and
did not draw attention to any matters by way of emphasis.
A copy of the audited consolidated financial statements for the
year ended 30 September 2021 is available on the Company's
website.
The interim report for the six months ended 31 March 2022 was
approved by the Directors on 29 June 2022.
Going Concern
The consolidated financial statements have been prepared on a
going concern basis. The Group made a loss for the period of
GBP31.750 million which included an unrealized loss of GBP30.459
million for the derivative instrument resulting in an adjusted loss
of GBP1.291 million (2021: loss of GBP1.479 million) and recorded a
net cash outflow from operating activities of GBP3.614 million
(2020: GBP1.549 million). The Group meets its day to day working
capital requirements through existing cash reserves. At 31 March
2022, the Group had GBP1.441 million of available cash.
The COVID-19 pandemic has not had a significant immediate impact
on the Company's operations. The Oil and Gas industry has been
deemed critical and thus we have been allowed to continue
operations. The Directors are aware that if the current situation
becomes prolonged then this may change. The consolidated financial
statements have been prepared on a going concern basis.
In response to this extraordinary period, the Directors have
taken the prudent decision to introduce cost saving measures where
possible to preserve working capital. The Directors have assessed
the Group's working capital forecasts for a minimum of 12 months
from the date of the approval of these financial statements. In
undertaking this assessment, the Directors have reviewed the
underlying business risks, and the potential implications these
risks would have on the Group's liquidity and its business model
over the assessment period. This assessment included a detailed
cash flow analysis prepared by the management, and they also
considered several reasonably plausible downside scenarios. The
scenarios included potential delays to expected future revenues. In
making their overall assessment the Directors took into account the
advanced stage of the development of the Saltfleetby gas field and
the impact of the derivative instrument if there were delays to
first gas. As outlined in note 11 the Group has committed to future
cash flows as a result of the derivatives in place which are due
even if first gas is delayed.
In respect of Balcombe the Directors have considered the
likelihood of a successful appeal.
Based on the current management's plan, management considered
that the working capital from the expected revenue generation are
sufficient for the expenditure to date as well as the planned
forecast expenditure for the forthcoming twelve months from the
date of the approval of this financial statement. As a result of
that review the Directors consider that it is appropriate to adopt
the going concern basis preparation.
3. CRITICAL ACCOUNTING ESTIMATES AND SOURCES OF ESTIMATION UNCERTAINTY
In applying the accounting policies, the directors may at times
require to make critical accounting judgements and estimates about
the carrying amount of assets and liabilities. These estimates and
assumptions, when made, are based on historical experience and
other factors that the directors consider are relevant.
The key estimates and assumptions concerning the future and
other key sources of estimation uncertainty at the end of the
financial year, that have significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are reviewed are as stated below.
Key accounting judgements
(a) Impairment of non-current asset
The group's non-current assets represent its most significant
assets, comprising of oil production assets, exploration and
evaluation (E&E) assets on its onshore site.
Management is required to assess exploration and evaluation
(E&E) assets for indicators of impairment and has considered
the economic value of individual E&E assets. The carrying
amount of the E&E asset are subject to a separate review for
indicators if impairment, by reference of the impairment indicators
set out in IFRS 6, which is inherently judgemental.
Processing operations are large, scarce assets requiring
significant technical and financial resources to operate. Their
value may be sensitive to a range of characteristics unique to each
asset and key sources of estimation uncertainty include proved
reserve estimates, future cash flow expected to arise from the
cash-generating unit and a suitable discount rate.
In performing impairment reviews, the Group assesses the
recoverable amount of its operating assets principally with
reference to the Group's independent competent person's report,
estimates of future oil prices, operating costs, capital
expenditure necessary to extract those reserves and the discount
rate to be applied to such revenues and costs for the purpose of
deriving a recoverable value.
As detailed in note 6 and 7, the carrying value amount of the
Group's E&E assets and oil production assets at 31 March 2022
were approximately GBP16.465m and GBP6.572m respectively. No
impairments were made during the interim period.
4. OPERATING SEGMENTS
Operating segments are prepared in a manner consistent with the
internal reporting provided to the management as its chief
operating decision maker in order to allocate resources to segments
and to assess their performance .
Currently, the Group's principal revenue is derived from the
sale of oil. All revenue arose from continuing operations within
the United Kingdom. Therefore, management considers no detail of
operating and geographical segments information is to be reported.
Nonetheless, the Group's revenue can be classified into the
following streams:
31 March 31 March
2022 2021
GBP'000 GBP'000
Sale of oil 27 -
All the non-current assets of the Group are located in the
United Kingdom.
All revenue arising from sale of oil is derived from a single
customer.
5. PROPERTY, PLANT AND Equipment
During the period, the Group incurred GBP3,215 additions to
property, plant and equipment (1H 2021: GBP3,000). The depreciation
charge for the period on the Group's property, plant and equipment
was GBP2,478 (1H 2021: GBP3,195).
6. EXPLORATion ANd evALUaTion ASSETS
During 2019, the Group acquired a 51% interest of the
Saltfleetby Gas Field (PEDL005) from Saltfleetby Energy Limited. An
initial payment of GBP2.5m was paid to Angus in connection with the
field abandonment cost.
Total
GBP'000
Cost or valuation
At 31 March 2021 9,499
Additions 3,574
-------------------------------------
At 30 September 2021 13,073
Additions 3,392
-------------------------------------
At 31 March 2022 16,465
-------------------------------------
Amortisation
At 30 September 2021 -
Charge for the period -
-------------------------------------
At 31 March 2022 -
Net book value
At 30 September 2021 13,073
==============================
At 31 March 2022 16,465
==============================
At 31 March 2021 9,499
==============================
7. OIL PRODUCTION ASSETS
Total
GBP'000
Cost or valuation
At 30 September 2020 7,373
Additions 87
-------------------------------------
At 31 March 2021 7,460
Additions 41
-------------------------------------
At 30 September 2021 7,501
Additions 38
-------------------------------------
At 31 March 2022 7,539
-------------------------------------
Depreciation and impairment
At 30 September 2020 967
Charge for the period -
-------------------------------------
At 31 March 2021 967
Depreciation for the period -
Impairment for the period -
-------------------------------------
At 30 September 2021 967
Charge for the period -
-------------------------------------
At 31 March 2022 967
-------------------------------------
Net book value
At 30 September 2021 6,534
==============================
At 31 March 2021 6,493
==============================
At 31 March 2022 6,572
==============================
Depreciation of oil production assets is included in cost of
sales in the consolidated statement of comprehensive income.
As of 31 March 2022, the Group retained 80% interest in Lidsey
field and 80% in Brockham field and is still the operator of both
fields.
8. TRADE AND OTHER RECEIVABLES
31 March 31 March 30 September
2022 2021 2021
GBP'000 GBP'000 GBP'000
Non-current
Contract
Debtor -
derivative 20,139 - 11,117
-------------------------------- ------------------------------ ------------------------------
- - 11,117
Current
Contract
debtor -
derivative 21,753 - 1,510
VAT
recoverable 167 87 218
Amount due
from
farmees 6,372 522 3,073
Other
receivables 94 151 331
------------------------------- ----------------------------- -----------------------------
28,386 760 5,132
------------------------------- ----------------------------- -----------------------------
48,525 760 16,249
The carrying amount of trade and other receivables approximates
to their fair value.
9. TRADE AND OTHER PAYABLES
31 March 31 March 30 September
2022 2021 2021
GBP'000 GBP'000 GBP'000
Trade payables 2,273 1,263 1,068
Other taxation 179 139 -
VAT payable - - 22
Accruals 173 137 231
Other payables 7 13 289
Interest
payable - loan - - 364
Lease Liability - 24 -
------------------------------- ----------------------------- -----------------------------
2,632 1,576 1,974
------------------------------- ----------------------------- -----------------------------
10. LOAN PAYABLE
On 17 May 2021, the Group signed a Loan Facility, conditional on
the setting of the derivative and regulatory approval of the
royalty from the Oil and Gas Authority, between Angus Energy and
Saltfleetby Energy Limited and Mercuria Energy Trading Limited and
Aleph Saltfleetby Limited as the co-Lender. The term of the Loan
Facility provides for a four year amortisation loan facility of up
to GBP12 million with a 12% margin over LIBOR, a 3% commitment fee
payable out of the facility, a share granted of 30 million shares
in Angus, issued over the life of the facility and an override of
8% of gross revenue following the repayment of the facility.
The GBP12 million facility is required for the re-development of
the Saltfleetby Gas Field and the drilling of the side-track well
in line with the Field Development Plan and the Plans for the
acceleration of production through the fast-tracking of the
side-track well.
31 March 31 March 30 September
2022 2021 2021
Repayment date schedule GBP'000 GBP'000 GBP'000
were as follows:
Current
1(st) year 3,600 - 1,500
Non-Current
2(nd) year 4,200 - 4,200
3(rd) year 4,200 - 4,200
4(th) year - 2,100
Total Facility Loan GBP12,000 - GBP12,000
============================ =================== ========= ==============
11. DERIVATIVES LIABILITY
On 01 June 2021, Angus Energy Weald Basin no. 3 Limited (AWB3)
entered into a derivative agreement with Mercuria Energy Trading SA
(METS) under a Swap contract as part of the condition of the Loan
Facility Note 10. The derivative instrument was used to mitigate
price risk on the expected future cash flow from the production of
Saltfleetby Gas Field. Under the Swap contract, AWB3 will pay METS
the floating price while METS will pay AWB3 the fixed price on the
sale of gas from the field.
Further details of the contract as at 31 March 2022 are
as below:
Period of Gas Production Quantity in Fixed price
Therms in pence
per Therms
1-Jul-22 30-Sep-22 3,375,000 0.4140
1-Oct-22 31-Mar-23 10,500,000 0.5205
1-Apr-23 30-Jun-23 5,250,000 0.3755
1-Jul-23 30-Sep-23 4,500,000 0.3755
1-Oct-23 31-Mar-24 9,000,000 0.4655
1-Apr-24 30-Jun-24 4,500,000 0.3560
1-Jul-24 30-Sep-24 3,750,000 0.3560
1-Oct-24 31-Mar-25 7,500,000 0.4500
1-Apr-25 30-Jun-25 3,750,000 0.3525
52,125,000
====================================== =============== ===============
As of reporting date, the expected cash flow on the sale of
natural gas amounted to GBP107.840m resulting in a loss of
GBP85.493m of which the Groups effective share is at GBP43.601m on
its 51% participating interest. The resulting loss on the Swap
contract was a result of the steep rise in the prices of natural
gas affecting the Group as the floating price payer as of reporting
date.
The Group has recognized the gross liability and the
corresponding receivable due from the Contract Debtor.
The cash flow forecast for the coming years on the derivatives
on the accompanying consolidated financial position as
of 31 March 2022 are:
Cash Flow of Derivative 31 March 31 March 31 March 30 June Total
Instruments 2023 2024 2025 2025
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- --------- --------- -------- --------
Cash Inflow 6,863 7,851 6,312 1,321 22,347
Cash Outlflow 51,256 33,201 19,746 3,637 107,840
Net Liability on Swap
Contract 44,393 25,350 13,434 2,316 85,493
========================= ========= ========= ========= ======== ========
Specific valuation technique used to value the financial
instruments includes fair value measurement derived from inputs
other than quoted prices included within Level 1 of fair value
hierarchy valuation, that are observable for the instrument either
directly or indirectly.
The carrying value of the financial instrument approximates
their fair value and was valued using Level 2 fair value hierarchy
valuation. The fair value has been determined with reference to
commodity yield curves, as adjusted for liquidity and trading
volumes as at the reporting date supplied by the Group's derivative
partner, Mercuria Energy Trading. Management considered that the
value provided by Mercuria Energy Trading best represented the fair
value of these arrangements as the forward pricing curves did not
take into account other market conditions.
The nature of these arrangements in the present environment is
such that material fluctuations in the value of the derivatives are
occurring on a daily basis. Wholesale gas prices have increased
substantially, but remain highly volatile, in this year and as a
result, the loss on these contracts has also increased
significantly.
The loss on these contracts at 31 March 2022 represents the
forecast spot-price value of the gas to be extracted against the
value fixed to be provided to the Group. Under projected gas
production volumes, these arrangements will fix the amount payable
to the group for the contracted volumes, with any excess of volume
being able to be sold at the available spot price.
In the event that the Group does not meet its production
timetable, the swaps will crystallise as a liability at the dates
at the proposed periods of gas production in the swap
agreements.
12. EARNINGS PER SHARE
Basic EPS amounts are calculated by dividing the loss for the
year attributable to equity holders of the Group by the weighted
average number of ordinary shares outstanding during the
period.
Diluted EPS amounts are calculated by dividing the loss for the
year attributable to equity holders of the Group by the weighted
average number of ordinary shares outstanding during the period
plus the weighted average number of ordinary shares that would be
issued on conversion of all the dilutive potential ordinary shares
into ordinary shares.
The following reflects the income and share data used in the
basic and diluted EPS computations:
31 March 31 March
2022 2021
Net loss attributable to equity holders
of the Group (31,750,000) (1,479,000)
Weighted average number of ordinary
shares 1,088,669,800 757,730,962
Basic and diluted (loss) per share (0.029) (0.002)
The diluted loss per share was not applicable as there were no
dilutive potential ordinary shares outstanding at the end of the
reporting period.
13. Share Capital AND RESERVE
Number Ordinary Share Premium
of shares shares GBP'000
GBP'000
Issued:
As at 30 September 2020 715,158,324 1,430 21,982
9 November 2020 - issue of shares 9,678,945 20 38
16 December 2020- issue of shares 41,664,999 83 167
26 January 2021 - issue of shares 150,000,000 300 1,200
Less: issuance cost (115)
As at 31 March 2021 916,502,268 1,833 23,272
-------------- --------- --------------
8 April 2021- issue of shares 15,000,000 30 120
3 June 2021-isse of shares 35,000,000 70 245
Less: Issuance of costs (32)
-------------- --------- --------------
As at 30 September 2021 966,502,268 1,933 23,605
19 October 2021 - issue of shares 11,200,000 22 -
6 December 2021- issue of shares 115,384,611 232 519
8 February 2022 - issue of shares 175,000,000 350 1,050
21 March 2022 - issue shares 39,200,000 78 233
Less: Issuance of cost (156)
-------------- --------- --------------
As at 31 March 2022 1,307,286,879 2,615 25,251
-------------- --------- --------------
On 19 October 2021, the Company issued 11,200,000 shares at a
price 0.20p for 12 months extension of GBP1.4m Convertible Loan
Note issued on 20 April 2020. Knowe Properties Limited, has agreed
to extend the mandatory repayment date to 17 April 2023.
On 6 December 2021, the Company issued 115,384,611 shares at a
price 0.65p with WH Ireland for increase on contingency for
Saltfleetby budget, Geothermal subsurface and potential acquisition
work, planning and regulatory matters in respect of current oil
fields and general working capital for the Company's ongoing
activities.
On 8 February 2022, the Company issued 175,000,000 shares at a
price 0.8p with WH Ireland for increase on contingency for
Saltfleetby budget (90% finalised), Geothermal subsurface and
potential acquisition work and for general working capital.
On 21 March 2022, the Company issued 39,200,000 shares at a
price 0.8p with WH Ireland for the legal settlement as per the
agreement dates 9 March 2022 with Gneiss Energy Limited.
The ordinary shares have a par value of GBP0.002 per share and
are fully paid. These shares carry no right to fixed income and
have no preferences or restrictions attached to them.
14. SHARE OPTIONS AND WARRANTS
On 13 October 2016, the Group implemented an Enterprise
Management Incentive Scheme followed by a
NED and Consultant Share Option Scheme (The Scheme).
At 30 September 2021, the Group had 77,950,892 share options and
211,301,066 warrants outstanding in respect of ordinary shares.
During the period ended 31 March 2022 the Group has issued no
options and 15,752,773 warrants. The outstanding and exercisable of
share options and warrants was 305,004,731 with a weighted average
price of GBP0.019 at 31 March 2022.
The inputs into the model were as follows:
Options Warrants Warrants Warrants
Stock price 0.90p 0.90p 0.90p 0.90p
Exercise price 0.009p 0.0118p 0.0133p 0.0148p
Interest rate 0.5% 0.5% 0.5% 0.5%
Volatility 30% 30% 30% 30%
Time to maturity 3 years 3 years 3 years 3 years
15. SEASONALITY OF GROUP BUSINESS
T here are no seasonal factors that materially affect the
operations of any company in the Group.
16. PROVISIONS FOR OTHER LIABILITIES AND CHANGES
31 March 31 March 30 September
2022 2021 2021
GBP'000 GBP'000 GBP'000
Abandonment
costs 3,007 3,007 3,007
--------------------------------------- --------------------------------------- ---------------------------------------
The Group makes full provision for the future costs of
decommissioning oil production facilities and pipelines on the
installation of those facilities. The amount provision is expected
to be incurred up to 2029 when the producing oil and gas properties
are expected to cease operations.
These provisions have been created based on the Group's internal
estimates and expectation of the decommissioning costs likely to
incur in the future. For the period under review, the directors
have assessed that the discount rate and inflation rate to be
applied to the current cost of decommissioning to be similar. On
this basis, the current cost is considered to be similar to the
discounted net present value.
17. SUBSEQUENT EVENTS
On 8 April 2022, the Company announced that whilst it will
continue its strategic review at the asset level only, it has ended
the "formal sale process" of the Company which it had commenced
previously in accordance with Rules 2.4 and 2.6 of the Takeover
Code. Accordingly, the Company is no longer in an offer period as
defined by the Takeover Code.
On 11 April 2022, the Company raised gross proceeds of
GBP675,000 through the placing of 61,363,634 Ordinary Shares to
certain institutional and other investors at a price of 1.1 pence
per share.
On 24 May 2022, the Company announce that it has executed a
share purchase agreement to acquire the entire issued share capital
of the Company's current joint venture partner in the Saltfleetby
Project, Saltfleetby Energy Limited, which owns a 49% working
interest in the Project thereby giving Angus Energy a 100% interest
in the Project. To fund the Acquisition and other working capital
requirements, the Company had concurrently arranged a direct
subscription with affiliates of Aleph International Holdings (UK)
Limited pursuant to which Aleph has subscribed for a total of
546,000,000 Ordinary Shares in the Company at a price of 1.0989011
pence, being GBP6,000,000 (Direct Subscription) split into an
initial unconditional tranche of GBP3,000,000 and a second tranche
of GBP3,000,000 conditional on Shareholder approval.
Summary of the Acquisition
The Company executed a share purchase agreement to acquire the
entire issued share capital of the Target from Forum Energy
Services Limited. The total effective consideration payable
pursuant to the SPA is the sum of GBP15,452,000, which
comprises:
-- GBP250,000 to be paid in cash at Completion;
-- the issue of 91 million Ordinary Shares at 1.0989011 pence
per share at Completion;
-- the issue and allotment of the 546,000,000 Ordinary Shares at
a price of 1.2 pence per Ordinary Share (GBP6,552,000) at
Completion; and
-- up to GBP6,250,000 in deferred consideration to be paid in
instalments from net cash payments to Angus Energy from the Project
through to 31 March 2025 (and subject to an upward or downward net
cash adjustment) as and when those payments would have been
available to SEL under the Company's Senior Debt Facility of May
2021.
-- The deferred consideration payment is accelerated if there is
any Change of Control all early repayment/termination of the
Facility Agreement.
Following completion of the Acquisition, the Group now owns a
100% working interest in, and would continue to be the operator of,
the Saltfleetby Licence.
As at 31 March 2022, Angus Energy recognised 100% of the
liabilities of the Debt Facility and Derivative Liability relating
to the Saltfleetby Field, thereby reporting liabilities of GBP12
million owed under the Debt Facility and a Derivative Liability of
GBP85.493 million. Angus Energy recognised a debtor of GBP6.372
million and GBP41.892 million in respect of these last two amounts,
thereby accounting for SEL's 49% interest. Following completion of
the Acquisition, Angus Energy will recognise 100% of the Project
revenues, costs and liabilities with no farmee interest
represented.
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END
IR SEUFWUEESEFM
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