REG - Angus Energy PLC - Interims Results to 31 March 2024
28/06/2024 07:00
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RNS Number : 2379U Angus Energy PLC 28 June 2024
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION
(EU) NO. 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW PURSUANT TO THE EUROPEAN
UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
28 June 2024
Angus Energy Plc
("Angus Energy", the "Company" or together with its subsidiaries, the "Group")
(AIM:ANGS)
Interim Accounts for the six months ended 31 March 2024
· Gas production up year on year
· EBITDA of £6.937m
· Refinancing of existing debt with Trafigura Group PTE Ltd, providing
financial stability
· Focus on organic and inorganic growth opportunities, with Brockham
restart complete
Angus Energy is pleased to announce its interim accounts for the six months
ended 31 March 2024 as set out below. A copy of the Interims is available on
the Company's website www.angusenergy.co.uk (http://www.angusenergy.co.uk)
END
For further information on the Company, please visit www.angusenergy.co.uk
(http://www.angusenergy.co.uk) or contact:
Enquiries:
Angus Energy Plc
www.angusenergy.co.uk
(http://www.angusenergy.co.uk)
Richard Herbert
Chief Executive
Director
Via Flagstaff
Beaumont Cornish Limited (Nomad) www.beaumontcornish.com
(http://www.beaumontcornish.com)
James Biddle / Roland Cornish Tel: +44 (0)
207 628 3396
SP Angel Corporate Finance LLP (Broker)
www.spangel.co.uk (http://www.spangel.co.uk)
Stuart Gledhill / Caroline Rowe / Richard Hail Tel: +44 (0)20 3470 0470
Flagstaff PR/IR
angus@flagstaffcomms.com
Tim Thompson / Fergus Mellon / Alison Alfrey Tel: +44 (0) 207 129 1474
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 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). Angus
Energy operates all fields in which it has an interest.
Disclaimers - this Announcement includes statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "forecasts", "plans", "prepares", "anticipates",
"projects", "expects", "intends", "may", "will", "seeks", "should" or, in each
case, their negative or other variations or comparable terminology, or by
discussions of strategy, plans, objectives, goals, future events or
intentions. These forward-looking statements include all matters that are not
historical facts. They appear in a number of places throughout this
Announcement and include statements regarding the Company's and the Directors'
intentions, beliefs or current expectations concerning, amongst other things,
the Company's prospects, growth and strategy. By their nature, forward-looking
statements involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future performance. The
Company's actual performance, achievements and financial condition may differ
materially from those expressed or implied by the forward-looking statements
in this Announcement. In addition, even if the Company's results of
operations, performance, achievements and financial condition are consistent
with the forward-looking statements in this Announcement, those results or
developments may not be indicative of results or developments in subsequent
periods. Any forward-looking statements that the Company makes in this
Announcement speak only as of the date of such statement and (other than in
accordance with their legal or regulatory obligations) neither the Company,
nor the Bookrunner nor Beaumont Cornish nor any of their respective
associates, directors, officers or advisers shall be obliged to update such
statements. Comparisons of results for current and any prior periods are not
intended to express any future trends or indications of future performance,
unless expressed as such, and should only be viewed as historical data.
Beaumont Cornish Limited, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting as nominated adviser to
the Company in relation to the matters referred herein. Beaumont Cornish
Limited is acting exclusively for the Company and for no one else in relation
to the matters described in this announcement and is not advising any other
person and accordingly will not be responsible to anyone other than the
Company for providing the protections afforded to clients of Beaumont Cornish
Limited, or for providing advice in relation to the contents of this
announcement or any matter referred to in it.
Chairman's Statement
Dear Shareholders,
I am pleased to share with you the interim results for the six months ended 31
March 2024. Production was up year on year with strong EBITDA being reported.
Our growth strategy has also kick started with the refinancing of our existing
debt with Trafigura Group PTE Ltd ("Trafigura") and the reinstatement of
production at Brockham.
All operations were conducted without any harm to people or the environment.
During the period we successfully restructured the Company's debt with the
closing of the facility provided by Trafigura. The new debt facility provides
the Company with a level of financial stability which allows us to plan for
the future and to maximise the value of our assets for the benefit of all our
shareholders. Trafigura has demonstrated a strong commitment to its new
relationship with Angus and we intend to work together to evaluate the
potential for gas storage at the Saltfleetby site, increasing gas production,
developing the oil assets and other potential acquisitions in the future.
Angus is committed to creating value for shareholders through organic and
inorganic growth. We have already restarted production at Brockham which has
exceeded expectations. We are now focussing on increasing production at
Saltfleetby through activating additional wells and installing a booster
compressor. Further opportunities for crude production are being developed.
Angus is proceeding with a strategy of acquisitions that will increase
production, reduce unit costs and decrease overall risk. We have identified
three geographic regions of interest and are actively pursuing acquisition and
commercial tie up opportunities. We hope to be announcing details during the
next six months.
Revenue from oil and gas production during the period was £12.131m on
production of a gross 24,274 bbls of gas condensate and 14.161 mm therms of
natural gas. This was the result of production from the Saltfleetby Gas Field.
Average sales prices achieved during the period were £35.45/bbls for gas
condensate and £0.80/therm for natural gas.
The Group recorded a profit of £5.775m, which included an operating profit of
£2.151m. EBITDA for the period was £6.937m. The derivative profit is based
on future production and calculated using forward gas prices as at 31 March
2024. The derivative will be realised to a profit or loss when the payments
under the derivative instruments become due.
As mentioned above, another milestone was achieved post period-end, with the
restarting of production at Angus's Brockham Oil Field in Surrey. The workover
of the Brockham 2Y well to reinstate production from the field was
successfully concluded in late May. A new pump was installed in the well and
repairs and upgrades made to the surface equipment. After a period of flow to
clean-up the well, it is back online producing c. 120 bbls/day of total fluid,
of which 40% is currently oil.
Operational Highlights
Saltfleetby
Gas volumes produced and sold from the Saltfleetby Field equalled 14.161 mm
therms in aggregate for the period as against hedged volumes of 9 mm therms
for the period. Operational efficiency was 90% for the period. Gas condensate
(liquid) production was 24,274 bbls for the period.
In October 2023 Angus announced the publication of an updated independent
Competent Persons Report ("CPR") for its Saltfleetby Gas Field ("SGF")
conducted by Oilfields International Limited. The summary of the results
which includes resources and reserves for both sales gas and associated
liquids is set out below:
Saltfleetby Field Net Reserves and Contingent Resource as at August 1, 2023 1P 2P 2C
Sales Gas (Bcf) 22 25 17
Sales Liquids (Mstb) 332 415 238
Total (Mboe) 4,194 4,760 3,204
*Energy equivalent factor 5,800 cubic feet of gas per boe
The new CPR has taken account of production performance from three wells
currently on production and the addition of two further development wells in
the Main Westphalian reservoir, SF9 and SF10, which are scheduled to enter
production in January 2025 and January 2026 respectively.
The CPR also gives the net present value of the cash flows from SGF, including
the impact from the revised capex from additional drilling, projected impact
of the Energy Profits Levy, the senior loan facility debt service costs, the
associated royalties and the mandatory hedging. Oilfield International
Limited has used a discount rate of 10%.
We highlight below the NCF and NPV10, discounted to August 1st, 2023: Net
Attributable to the Company:
Net Cash Flow (NCF) Attributable to the Company NPV10 Attributable to the Company
Scenario 1P 2P 1P 2P
Pre-Tax £125.4m £153.5m £86.9m £104.1m
Post-Tax £78.9m £90.6m £57.1m £64.3m
MOD: money of the day
The full CPR is available for download in the "Presentations" section of the
Company's website (www.angusenergy.co.uk/media/presentations
(http://www.angusenergy.co.uk/media/presentations) ).
During the period, the SF7 permanent flowline construction was completed, and
the flowline tied into the main process plant. The Company also completed a
bottom-up assessment of the geological interpretation of the Saltfleetby
field. This included:
· Reprocessing and reinterpreting the 3D seismic across the field
generating a revised top structure map
· New stratigraphic correlation of the reservoir units and other
key horizons
· Revised petrophysics of key well logs
· A probabilistic evaluation of the volumetrics
This exercise has helped to constrain the structure of the reservoir and will
be critical in the planning of future development wells. Additionally, the
work has indicated the potential for underdeveloped (or undeveloped) horizons
within the reservoir. It has also reconfirmed the previously identified
production acceleration potential within the main producing reservoir unit.
Detailed Design has progressed with the Booster Compressor. Selection of the
compressor and engine, for the pressures and flowrates established by the
reservoir modelling and CPR report, have now been finalised.
Potential Future Drilling and Gas Storage
A planning application was submitted post-period end to the local planning
officer. The planning application will allow for drilling, completion and
testing of four new wells to be drilled from either the A or B site giving us
flexibility in future development.
Upon completion of the seismic remapping exercise described above, Angus will
progress with the development of a reservoir model (static and dynamic) which
is anticipated to be completed Q3 2024 and will be utilised to fine tune the
detailed design and anticipated results of future drilling targets and gas
storage potential.
Brockham
The workover of the Brockham 2Y well to reinstate production from the field
was successfully concluded post period end in late May 2024. A new pump was
installed in the well and repairs and upgrades made to the surface equipment.
After a period of flow to clean-up the well, it is back online producing c.
120 bbls/day of total fluid, of which 40% is currently oil. The well will be
monitored over the coming weeks to determine future production potential. All
produced water is reinjected at the site into the reservoir for pressure
support. Further updates on oil production from Brockham in which Angus has an
80% interest and other potential developments will be shared over the coming
months.
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 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.
On 14 February 2023, our appeal against the decision by West Sussex County
Council to refuse permission for an extended well test at the Balcombe oil
site was upheld. The Planning Inspectorates decision was subsequently
challenged in the High Court by a local residence group. In October 2023 the
High Court upheld the Planning Inspectorates decision to grant the Company the
right to test the existing well, which has now also been successfully
appealed. The Company now waits to hear whether their appeal will be
successful and should know by January 2025.
Lidsey
The Lidsey Field has been shut in during the period, waiting on the resumption
of Brockham production in order to evaluate options for combined operations.
Financial Highlights
On 30 October 2023, and previously announced on 28 September 2023, Kemexon Ltd
agreed to convert its £3m Junior Bridge Facility, together with interest and
fees, into equity in the Company at a price of 0.66 pence per share.
Accordingly, the Company issued 516,033,308 ordinary shares at 0.66 pence per
share.
On 22 February 2024, the Company announced that terms had been agreed with a
subsidiary of Trafigura Group PTE Ltd ("Trafigura ") for a refinancing of its
existing debt. The Company signed definitive loan documentation which allowed
it to draw down in full on the £20 million loan facility (the "Facility")
with Trafigura. The existing senior debt of £4.56 million was transferred to
Trafigura and the proceeds of the Facility were applied to repay the second
bridge facility of £6 million, and £1.75 million of Forum Energy's deferred
consideration from the sale of Saltfleetby Energy Limited's 49% interest in
the Saltfleetby Field to Angus in 2022. The balance of funds from the Facility
would be used to pay legacy creditors and invest in wells and equipment to
increase gas production from Saltfleetby and restart oil production from the
Brockham Field in Southern England. The existing security package encompassing
first fixed and floating charges over all the Group's leases, licences and
equipment has been novated to Trafigura as has the Gas Sales Agreement with
Shell Trading Europe Limited. The existing hedge contract was replaced with a
gas offtake, with embedded price protection.
On 6 March 2024, the Company issued 25,000,000 Ordinary Shares at 0.4 pence
per share in relation to a £750,000 fee for structuring and assistance in
securing the Trafigura £20 million Loan Facility. The total number of fee
shares is 187,500,000. The balance was issued on 19 March 2024, after
receiving additional authorities at the General Meeting on 14th March 2024.
As at 31 March 2024 the Group had cash of £5.438m.
Outlook
With the successful restructuring of the Company's debt and stable production
at Saltfleetby the management team can now turn attention to both organic and
inorganic growth opportunities and we look forward to updating shareholders as
our plans progress.
With kind regards,
Krzysztof Zielicki
Non- Executive Chairman
28 June 2024
ANGUS ENERGY PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 31 March 2024
Note Six months Six months
31 March 31 March
2024 Unaudited 2023
Unaudited
£'000 £'000
Revenue 4 12,131 16,466
Cost of sales (3,109) (2,356)
Depletion cost (4,786) (5,162)
Gross profit 4,236 8,948
Administrative expenses (2,005) (1,499)
Share based payment charge (80) (963)
Operating profit 2,151 6,486
Derivative financial instrument gain 11 8,981 121,222
Realised derivative costs 11 (3,442) (11,554)
Finance cost (1,915) (856)
Profit on ordinary activities before taxation 5,775 115,298
Income tax expense - -
Profit for the period attributable to the 5,775 115,298
equity holder of the Company
Profit per share (EPS): £ £
Basic and diluted (whole £'s) 12 0.0014 0.0315
ANGUS ENERGY PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 March 2024
As at As at As at
31 March 31 March 30 September
2024 2023 2023
Unaudited Unaudited Audited
Note £'000 £'000 £'000
Non-current assets
Property, plant and equipment 5 12 20 17
Exploration and evaluation assets 6 5,647 5,619 5,628
Oil and gas production assets 7 76,489 85,656 80,248
Lease assets - 31 25
82,148 91,326 85,918
Current assets
Trade and other receivables 8 3,941 3,266 2,976
AFS financial investments 9 13 11
Lease assets 10 33 1
Cash and cash equivalent 5,438 3,171 2,172
9,398 6,483 5,160
Total Assets 91,546 97,809 91,078
Equity
Share capital 8,789 6,868 7,254
Share premium 48,376 46,598 45,500
Merger reserve (200) (200) (200)
Loan Note reserve - 106 -
Accumulated loss (9,440) (22,048) (15,295)
Total Equity 47,525 31,324 37,259
Current liabilities
Trade and other payables 9 4,708 15,151 10,270
Loan payable 10 1,250 4,200 13,829
Derivative liability 11 10,146 20,319 12,827
16,104 39,670 36,926
Non-current liabilities
Provisions 14 4,970 4,369 4,970
Trade and other payables 9 1,610 57 23
Loan payable 10 18,750 5,250 3,013
Derivative Liability 11 2,587 17,139 8,887
Total non-current liabilities 27,917 26,815 16,893
Total liabilities 44,021 66,485 53,819
91,546 97,809
Total Equity and Liabilities 91,078
ANGUS ENERGY PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 March 2024
Share Share premium Merger Total
Capital Reserve Loan Note reserve Retained equity
Earnings
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 October 2022 5,529 38,708 (200) (138,599) (94,456)
106
- - - 115,298 115,298
Profit for the period -
Total comprehensive income - - - 115,298 115,298
for the period -
Transaction with owners:
Issue of placing shares 1,339 8,740 - - - 10,079
Less: issuance costs - (560) - - - (560)
Grant of options - - - - 963 963
Grant of Warrant as fund raise and - (290) - - 290 -
finance costs
Balance at 31 March 2023 6,868 46,598 (200) (22,048) 31,324
106
Balance at 1 October 2022 5,529 38,708 (200) 106 (138,599) (94,456)
- - - 117,810 117,810
Profit for the year -
Total comprehensive income - - - 117,810 117,810
for the year -
Transaction with owners:
Issue of shares 1,725 10,297 - (106) - 11,916
Less: issuance cost - (3,477) - - - (3,477)
Grant of share options - - - - 1,377 1,377
Grant of Warrant as fund raise and - (28) - - 4,117 4,089
finance costs
Balance at 30 September 2023 7,254 45,500 (200) (15,295) 37,259
-
- - - 5,775 5,775
Profit for the period -
Total comprehensive income - - - 5,775 5,775
for the period -
Transaction with owners:
Issue of placing shares 1,535 3,396 - - - 4,931
Less: issuance costs - (520) - - - (520)
Grant of share options - - - - 80 80
8,789 48,376 (200) - (9,440) 47,525
Balance at 31 March 2024
ANGUS ENERGY PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 31 March 2024
Six months 31 March Six months 31 March
2024 Unaudited 2023
Unaudited
£'000 £'000
Cash flow from operating activities
Profit before taxation 5,775 115,298
Adjustment for:
Unrealised derivative financial instrument (gain)/loss (8,981) (122,936)
Interest payable - 394
Share based payment charge 80 962
Depletion charges 4,786 5,162
Depreciation and amortisation charges 8 6
Loss on AFS investments 3 -
Write-off of Inventory - 4
Revaluation of Investment - 7
Lease amortisation charges 16 22
1,687 (1,081)
Operating cash flows before movements in working capital
Change in trade and other receivables (965) 841
Change in trade and other payables (1,622) 3,526
Net cash (used) / generated in operating activities (900) 3,286
Cash flows from investing activities
Payment of deferred consideration (2,358) -
Changes in trade and other payable - (196)
Acquisition of exploration and evaluation assets (19) (47)
Acquisition of oil and gas production assets (1,027) (10,025)
Net cash used in investing activities (3,404) (10,268)
Cash flows from financing activities
Loan facility repayment (16,841) (2,100)
Proceeds from loan drawdown 20,000 3,004
Lease principal repayment - (18)
Net proceeds from issue of share capital 4,411 8,520
Net cash generated from financing activities 7,570 9,406
Net increase in cash & cash equivalents 3,266 2,424
Cash and cash equivalent at beginning of year 2,172 747
Cash and cash equivalent at end of period 5,438 3,171
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 Limited United Kingdom Investment holding company
ii) Angus Energy Weald Basin No. 1 Limited United Kingdom Investment holding company
iii) Angus Energy Weald Basin No. 2 Limited United Kingdom Investment holding company
iv) Angus Energy Weald Basin No. 3 Limited United Kingdom Oil & Gas extraction for distribution to third parties
v) Saltfleetby Energy Limited United Kingdom Natural Gas Extraction
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 (£'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 2024 and 31 March 2023 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 2023, 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 2023 is available on the Company's website.
The interim report for the six months ended 31 March 2024 was approved by the
Directors on 28 June 2024.
Going Concern
The Group recorded a profit of £5.775m (2023: £115.298m), which included an
operating profit of £2.151m (2023: £6,486m). EBITDA for the period was
£6.937m (2023: £10.893m). The Group recorded net cash outflows from
operating activities of £0.900 million (2023: inflow of £3.286 million). The
Group meets its day to day working capital requirements through revenue from
oil and gas sales and existing cash reserves. As at 31 March 2024, the Group
had £5.438m (2023: £3.171m) of available cash.
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 in gas production. 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 gas production is delayed.
Forecast cashflows place reliance on there not being a suspension of gas
production for an unforeseen significant period. Current production levels
are in excess of derivative requirements. There are no present operational
concerns and whilst there are mitigating steps that could be taken, the
contracted derivative will need to be settled at a fixed point in time. In the
event of any significant delay this would be subject to further negotiation
with the derivative holder or further funding may be required. The Directors
have therefore identified a material uncertainty which may cast doubt over the
Group's ability to continue as a going concern.
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, notwithstanding the
material uncertainty as outlined above. The Directors have assessed the
company's ability to continue as a going concern and have reasonable
expectation that the company has adequate resources to continue operations for
a period of at least 12 months from the date of approval of these financial
statements.
These financial statements do not include any adjustment that may result from
any significant changes in the assumption used.
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 of 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 2024 were approximately £5.647m
and £76.489m respectively. No impairments were made during the interim
period.
4. OPERATING SEGMENTS
1. 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.
2.
Currently, the Group's principal revenue is derived from the sale of natural
gas and condensate 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
2024 2023
£'000 £'000
Sale of gas condensate 849 735
Sales of natural gas 11,282 15,731
Total Revenue 12,131 16,466
All the non-current assets of the Group are located in the United Kingdom.
All revenue arising from the sale of natural gas is derived from sales to
Shell plc and represents over 93% of the Company's revenue.
5. PROPERTY, PLANT AND Equipment
During the period, the Group did not incur any additions to property, plant
and equipment (2023: £nil). The depreciation charge for the period on the
Group's property, plant and equipment was £4,819 (2023: £6,208).
6. EXPLORATion ANd evALUaTion ASSETS
Total
£'000
Cost or valuation
At 31 March 2023 5,619
Additions 5
Increase in abandonment provision 4
-------------------------------------
At 30 September 2023 5,628
Additions 19
-------------------------------------
At 31 March 2024 5,647
-------------------------------------
Amortisation
At 30 September 2023 -
Charge for the period -
-------------------------------------
At 31 March 2024 -
------------------------
Net book value
At 30 September 2023 5,628
==============================
At 31 March 2023 5,619
==============================
At 31 March 2024 5,647
==============================
7. OIL AND GAS PRODUCTION ASSETS
Total
£'000
Cost or valuation
At 30 September 2022 82,288
Additions 10,025
-------------------------------------
At 31 March 2023 92,313
Additions 1,042
Increase in abandonment provision 597
-------------------------------------
At 30 September 2023 93,952
Additions 1,027
-------------------------------------
At 31 March 2024 94,979
-------------------------------------
Depreciation and impairment
At 30 September 2022 1,496
Charge for the period 5,161
-------------------------------------
At 31 March 2023 6,657
Charge for the period 3,330
Impairment for the period 3,717
-------------------------------------
At 30 September 2023 13,704
Charge for the period 4,786
-------------------------------------
At 31 March 2024 18,490
-------------------------------------
Net book value
At 30 September 2023 80,248
==============================
At 31 March 2023 85,656
==============================
At 31 March 2024 76,489
==============================
As of 31 March 2024, the Group retained 100% interest in Saltfleetby Field,
80% interest in Lidsey field and 80% in Brockham field and is still the
operator of all the fields.
8. TRADE AND OTHER RECEIVABLES
31 March 31 March 30 September 2023
2024 2023
£'000 £'000 £'000
Current
Accrued sales income 1,537 2,065 2,121
VAT recoverable 446 477 196
Amount due from farmees - 611 195
Rent deposit 130 6 130
Other receivables 1,828 107 334
------------------------------- ----------------------------- -----------------------------
3,941 3,266 2,976
------------------------------- ----------------------------- -----------------------------
The carrying amount of trade and other receivables approximates to their fair
value.
9. TRADE AND OTHER PAYABLES
31 March 31 March 30 September
2024 2023 2023
£'000 £'000 £'000
Non-Current
Deferred consideration on Saltfleetby
Energy Limited acquisition 1,587 - -
Lease liability 23 57 23
------------------------------- ----------------------------- -----------------------------
1,610 57 23
Current
Trade payables 2,604 4,487 4,249
Convertible loan notes - 1,347 -
Bridge Loan - 3,004 -
Other taxation - 251 -
Deferred consideration on Saltfleetby 1,300 5,538
Energy Limited acquisition 5,244
Accruals 413 137 176
Other payables 373 3 269
Interest payable - loan - 366 315
Lease Liability 18 18 17
------------------------------- ----------------------------- -----------------------------
4,708 15,151 10,270
------------------------------- ----------------------------- -----------------------------
10. LOAN PAYABLE
On 22 February 2024, the Company announced that terms had been agreed with a
subsidiary of Trafigura Group PTE Ltd ("Trafigura") for a refinancing of its
existing debt. The Company signed definitive loan documentation which allows
it to draw down in full on the £20 million loan facility (the "Facility")
with Trafigura. The existing senior debt of £4.56 million was transferred to
Trafigura and the proceeds of the Facility were applied to repay the bridge
facility of £6 million, and £1.75 million of Forum Energy's deferred
consideration from the sale of Saltfleetby Energy Limited's 49% interest in
the Saltfleetby Field to Angus in 2022.
The balance of funds from the Facility would be used to pay legacy creditors
and invest in wells and equipment to increase gas production from Saltfleetby
and restart oil production from the Brockham Field in Southern England. The
existing security package encompassing first fixed and floating charges over
all the Group's leases, licences and equipment has been novated to Trafigura
as has the Gas Sales Agreement with Shell Trading Europe Limited. The existing
hedge contract was replaced with a gas offtake, with embedded price
protection.
31 March 31 March 30 September
2024 2023 2023
Repayment date schedule is as follows: £'000 £'000 £'000
Current
1(st) year 1,250 4,200 13,829
Non-Current
2(nd) year 5,000 5,250 3,013
3(rd) year 5,000 - -
4(th) year 5,000 - -
5(th) year 3,750 - -
Total Facility Loan £20,000 £9,450 £16,842
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 £12 million Loan Facility. 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.
As part of the Trafigura loan (see note 10), the existing Mercuria hedges have
been novated and restruck with Trafigura. The Company also struck 7.3 million
therms of new hedges to price protect the Mercuria hedges crystallized in July
2023.
Further details of the contract as at 31 March 2024 are as below:
Period of Gas Production Quantity in Therms Fixed price in pence per Therms
1-Apr-24 30-Jun-24 4,500,000 29.60
1-Jul-24 30-Sep-24 3,750,000 29.60
1-Jul-24 30-Sep-24 1,840,000 56.00*
1-Oct-24 31-Mar-25 7,500,000 39.00
1-Oct-24 31-Dec-24 1,840,000 66.25*
1-Jan-25 31-Mar-25 1,800,000 72.90*
1-Apr-25 31-Jun-25 3,750,000 29.25
1-Apr-25 30-Jun-25 1,820,000 63.40*
26,800,000
*new hedges to price protect the Mercuria hedges crystallized in July 2023
Crystallised hedges at fixed price as below:
Period of Gas Production Quantity in Therms Fixed price in pence per Therms
1-Jul-24 30-Sep-24 1,840,000 122.60
1-Oct-24 31-Mar-25 3,640,000 137.00
1-Apr-25 31-Jun-25 1,820,000 107.00
7,300,000
As of the reporting date, the expected net cash flow on the sale of natural
gas amounted to £14.901m (2023: £18.142m) resulting in a derivative
liability of £12.733m (2023: £37.458m) of which the Group has now recorded
100% share on its new working interest due to the acquisition of Saltfleetby
Energy Limited.
Cash Flow of Derivative Instruments 31 March 2025 30 June 2025 Total
£'000 £'000 £'000
Cash Inflow 12,742 2,159 14,901
Cash Outflow (22,888) (4,746) (27,634)
Net Liability on Swap Contract (10,146) (2,587) (12,733)
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, Trafigura. Management considered that the value provided
by Trafigura 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 decreased substantially since March 2023,
but remain highly volatile.
The adjusted loss on these hedging contracts as of 31 March 2024 represents
the forecasted spot-price value of the gas to be extracted against the value
fixed 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 volume being able to be sold at the available spot
price.
The valuation of financial instruments as of the period resulted in a gain of
£8.981m (2023: £121.222m) as a result of a decrease in forward pricing as at
31 March 2024. An amount of £3.442m was crystalised in the period and paid
to Mercuria Energy Trading and Trafigura respectively.
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 profit 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 profit 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
2024 2023
Net profit attributable to equity holders of the Group 5,774,077 115,297,958
Weighted average number of ordinary shares 4,018,011,729 3,655,793,215
Basic and diluted profit per share (whole £'s) 0.0014 0.0315
The diluted profit per share is the same as the basic profit per share as
there were no dilutive potential ordinary shares outstanding at the end of the
reporting period.
13. SEASONALITY OF GROUP BUSINESS
There are no seasonal factors that materially affect the operations of any
company in the Group.
14. PROVISIONS FOR OTHER LIABILITIES AND CHARGES
31 March 31 March 30 September
2024 2023 2023
£'000 £'000 £'000
4,970 4,369
Abandonment costs 4,970
--------------------------------------- --------------------------------------- ---------------------------------------
The Group makes full provision for the future costs of decommissioning of oil
and gas production facilities and pipelines on the installation of those
facilities. The amount of the 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.
15. SUBSEQUENT EVENTS
On 14 May 2024, and as previously announced on
22 February 2024, the Company settled its March 2024 royalty or ORRI
("Overriding Royalty Interest") payments on Saltfleetby Field production in
shares. Accordingly, the Company issued a total of 27,448,470 Ordinary Shares
to the ORRI holders representing a value of £97,277.07.
On 19 June 2024, the Company announce that
Antoine Vayner joined the Board of Directors as a Non-Executive Director,
representing the largest shareholder, Kemexon Ltd.
Antoine brings considerable experience in
origination and execution of a variety of transactions in the energy space. He
has previously worked for St James's Wealth Management, the Mirabaud Group,
and IDCM (Finance and M&A advisory) in London, before taking a position in
strategy and business development of the investment arm of Kemexon.
Antoine's appointment reinforces Kemexon's
commitment to Angus' growth and development. The combination of Kemexon's
expertise and support should enable the Company to pursue various growth
opportunities, both organic and inorganic, that have been identified.
NOMINATED ADVISER
Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.
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