REG - Angus Energy PLC - Updated Saltfleetby CPR

Angus EnergyAnnouncement

17/10/2023 07:00

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RNS Number : 2955Q  Angus Energy PLC  17 October 2023

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.

 

 

 

17 October 2023

 

Angus Energy Plc

("Angus Energy", the "Company" or together with its subsidiaries, the "Group")

(AIM:ANGS)

 

Updated Saltfleetby Competent Persons Report ("CPR")

 

·    Updated CPR commissioned at the Company's wholly-owned Saltfleetby
Gas Field ("Saltfleetby" or "SGF") on the basis of Angus' decision to drill
two new wells in 2025-2026, for a total of five wells producing from the
Westphalian Main Reservoir along with potential for conversion for gas storage
or CO2 injection in the future

·    P90 NPV10 valuation of £57.1 million and P50 NPV10 valuation of
£64.5 million post tax, (including the full impact of the Energy Profits
Levy)

·    Over 2 BCF of Sales Gas produced and exported since August 2022

·    Reserves uncertainty reduced from 2021 CPR with P90 Gross Sales Gas
Reserves up by 8 BCF to 24.2 BCF and P50 Reserves decreased by 2.6 BCF to 27.2
BCF net of historic production

Revised Saltfleetby Competent Persons Report

Angus Energy Plc (AIM: ANGS) is pleased to share the updated Competent Persons
Report ("CPR") for its Saltfleetby Gas Field ("SGF").  The full CPR is
available for download in the "Presentations" section of the Company's website
(www.angusenergy.co.uk/media/presentations).

The CPR, performed by Oilfield International Limited, gives the net present
value of the cash flows from SGF, including the impact from the revised capex,
the senior loan facility debt service costs, the associated royalties and the
mandatory hedging.  Oilfield International Limited has used a discount rate
of 10%. The CPR is updated from the previous CPR commissioned by Angus in
October 2021 ("2021 CPR").

The new CPR has taken account of production performance from the 3 wells in
the SGF in the period from August 2022, when it was brought on line, to the
end of July 2023. During this time, 2 BCF of sales gas has been processed and
exported. The CPR includes an allowance for plant availability of 92.3% and an
estimate of gas consumed in operations of 10% (P50) to 15% (P90), compared to
2.75% in the 2021 CPR, one of the reasons for the decrease in P50 Reserves as
noted above. The Company is confident that gas usage will prove to be lower
than this estimate once the plant has fully stabilised with the new flowline
in operation.

Two further wells on the Main Westphalian reservoir, SF9 and SF10, are
scheduled to enter production in January 2025 and January 2026 respectively,
to extend plateau production and accelerate the extraction of gas.  The cost
of these additional wells, expected to be funded out of field cashflows, has
been included in the NPV10 valuations outlined above.

We highlight below the NCF and NPV10, discounted to August 1st, 2023: Net
Attributable to the Company:

 

                                          Net Cash Flow Attributable to the Company     NPV10 Attributable to the Company     Operator

 Scenario                                 1P                     2P                     1P                 2P
 Including AEWB's Contractual Loan terms  £m MOD                 £m MOD                 £m MOD             £m MOD             AEWB
 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 CPR includes Reserves in the Main Field Westphalian Reservoir and
Contigent Resources in the Main Field Namurian Reservoir and Southern Lobe
Westphalian Reservoir as follows:

 

 

Main Field Westphalian Reservoir: Sales Gas Reserves: Gross, and Net
Attributable to the Company after Royalties:

 

 Saltfleetby Field*                Gross       Net Attributable to AE      Operator
 Sales Gas Reserves                1P    2P    1P            2P
                                   BCF   BCF   BCF           BCF

 Main Field Westphalian Reservoir  24.2  27.2  22.4          25.2          AEWB

 

 

 

 

 

 

 

Main Field Westphalian Reservoir: Sales Liquids Reserves: Gross, and Net
Attributable to the Company after Royalties:

 

 Saltfleetby Field*                Gross         Net Attributable to AE      Operator
 Sales Gas Reserves                1P     2P     1P            2P
                                   M STB  M STB  M STB         M STB

 Main Field Westphalian Reservoir  357    447    332           415           AEWB

 

* Angus Energy Plc ("AE") through its wholly owned subsdiaries Angus Energy
Weald Basin No 3 Ltd ("AWEB") and Saltfleetby Energy Limited, has a 100%
working interest in the Saltfleetby Gas Field which is part of the UK onshore
licence PEDL005. The figures quoted above have been prepared in compliance
with the SPE Petroleum Resource Management System (SPE-PRMS).

 

Both cases are inclusive of the projected Energy Profits Levy, which has had a
major impact on the valuation of SGF. Despite this, the CPR has confirmed the
significant value of the field and the value of additional drilling to
accelerate the production of the field's reserves.

 

 

Contingent Gas Resources: Main Field Namurian Reservoir and Southern Lobe
Westphalian Reservoir

 

 Saltfleetby Field                         Gross              Operator
 Sales Gas Contingent Resources            1C    2C

                                                       3C
                                           BCF   BCF   BCF

 Main Field Westphalian Reservoir          0.1   1.7          AEWB

                                                       3.7
 Southern Satellite Westphalian Reservoir  10.2  15.6

                                                       22.9

 Total Remaining Recoverable Gas           10.3  17.2

                                                       26.7

 

The 1C Sales Gas Contingent Resources are stated net of 15% Gas Consumed in
Operations (CiO). The 2C and 3C are stated net of 10% CiO. In the 2021 report,
they were stated net of 2.75% CiO.

 

 

 

 

 

Contingent Liquids Resources: Main Field Namurian Reservoir and Southern Lobe
Westphalian Reservoir

 

 Saltfleetby Field                         Gross                Operator
 Liquids Contingent Resources              1C     2C

                                                         3C
                                           M STB  M STB  M STB

 Main Field Westphalian Reservoir          3      26            AEWB

                                                         57
 Southern Satellite Westphalian Reservoir  152    213

                                                         275

 Total Remaining Recoverable Gas           155    238

                                                         332

 

 

More information about Angus' plans for SGF will be shared as the Company
progesses with its projects. A full production update will be given, as usual,
at the end of the calendar quarter.

 

 

Richard Herbert, CEO of the Company commented "Following the redevelopment of
the Saltfleeby Field and a first year of successful production, it is very
reassuring to confirm from the production of the 3 wells in the field that the
reservoir is performing according to our expectations. We have been able to
narrow the range of uncertainty on the Reserves, with a significant increase
in the P90 high-confidence estimate. Despite using a more conservative
shrinkage factor for gas consumed in operations and the significant impact of
the Energy Profits Levy, net cash flow, discounted and undiscounted, remains
strong. This evaluation allows us to plan the next phase of development of the
Saltfleetby reservoir with confidence."

 

 

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
 
                Tel: +44 (0) 208 899 6380

 

Beaumont Cornish Limited (Nomad)      www.beaumontcornish.com
(http://www.beaumontcornish.com)

 

James Biddle / Roland Cornish                   Tel: +44 (0)
207 628 3396

 

WH Ireland Limited (Broker)

 

Katy Mitchell / Harry Ansell
Tel: +44 (0) 207 220 1666

 

Flagstaff PR/IR
 
                angus@flagstaffcomms.com

 

Tim Thompson / Fergus Mellon                 Tel: +44 (0) 207
129 1474

 

Aleph Commodities
                info@alephcommodities.com

 

Qualified Person's Statement: Richard Herbert, CEO of the Company, who has
over 43 years of relevant experience in the oil and gas industry, has approved
the information contained in this announcement. Richard Herbert is a Fellow
of the Geological Society and a member of American Association of Petroleum
Geologists.

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.

Glossary of Technical Terms Used in this Announcemennt and the CPR

ADR - Abandonment, Decommissioning and Reclamation Expenditure

bbl - Barrels

/bbl - per barrel

Bscf or Bcf - Billion standard cubic feet

bcpd - Barrels of condensate per day

bbl/d - Barrels of Oil per day

blpd - Barrels of liquid per day

bpd - Barrels per day

boe - Barrels of Oil equivalent @ xxx MCF/bbl

boepd - Barrels of Oil equivalent per day @ xxx MCF/bbl

bopd - Barrels Oil per day

bwpd - Barrels of water per day

bwpd - Barrels water per day

C$,CAD$, CDN$ - Canadian Dollar

CAPEX - Capital Expenditure

E&A - Exploration & Appraisal

E&P - Exploration and Production

EBIT - Earnings before Interest and Tax

EBITDA - Earnings before interest, tax, depreciation, and amortisation

EI - Entitlement Interest

EIA - Environmental Impact Assessment

EMV - Expected Monetary Value

EOR - Enhanced Oil Recovery

EUR - Estimated Ultimate Recovery

FDP Field Development Plan

G&A General and Administrative costs

GIIP Gas initially in place

GOR Gas Oil Ratio

HSE Health, Safety and Environment

HSSE-SR Health, Safety, Security, Environment and Social Responsibility

IRR - Internal Rate of Return

km - Kilometres

km2 - Square kilometres

LoF - Life of Field

m - Metres

$m - Million US dollars

M - Thousand, especially of volume

m3 - Cubic metres

Mcf or Mscf - Thousand standard cubic feet

MMcf or MMscf - Million standard cubic feet

m3d - Cubic metres per day

Mean - Arithmetic average of a set of numbers

Median - Middle value in a set of values

Mm3 - Thousand Cubic metres

Mm3d - Thousand Cubic metres per day

MM - Million (especially of volume and energy)

MMbbl - Millions of barrels

MMBTU - Millions of British Thermal Units

Mode - Value that exists most frequently in a set of values = most likely

Mscfd - Thousand standard cubic feet per day

MMscfd - Million standard cubic feet per day

NGL - Natural Gas Liquids

NPV - Net Present Value

IRR - Internal Rate of Return

MIRR - Modified Rate of Return (Reinvestment of CF at market rate)

OCM - Operating Committee Meeting

OPEX - Operating Expenditure

p.a. - Per annum

P&A - Plugged and abandoned

PDP - Proved Developed Producing

PUD - Proved Undeveloped

PVT - Pressure volume temperature

P10 - 10% Probability

P50 - 50% Probability

P90 - 90% Probability

Rf - Recovery factor

Sales Gas - Gas that satisfies all National Grid plc's quality and safety
specifications and so can be transported through the National Gas Grid to
domestic and industrial consumers.

scf or cf - Standard Cubic Feet

scfd or cfd - Standard Cubic Feet per day

scf/ton - Standard cubic foot per ton

SEC - Securities and Exchange Commission

SPE - Society of Petroleum Engineers

SPE PRMS - 2018 Guidelines for categorising and valuing petroleum resources

SPEE - Society of Petroleum Evaluation Engineers

STB or stb - Stock tank barrel

STOIIP - Stock tank Oil initially in place

T - Tonnes

TD - Total Depth

Te - Tonnes equivalent

Tscf or Tcf - Trillion standard cubic feet

TCM - Technical Committee Meeting

Tpd - Tonnes per day

US$ - United States Dollar

WI - Working Interest

1H20 - First half (6 months) of 2020 (example of date)

2Q20 - Second quarter (3 months) of 2020 (example of date)

2D - Two dimensional

3D - Three dimensional

4D - Four dimensional

1P - Proved Reserves

2P - Proved plus Probable Reserves

3P - Proved plus Probable plus Possible Reserves

Contingent Resources - Those quantities of gas and liquids estimated, as of a
given date, to be potentially recoverable from known accumulations by
application of development projects but which are not currently considered to
be commercially recoverable due to one or more contingencies.

1C - Denotes a low estimate of contingent resources.

2C - Denotes the most likely estimate of contingent resources.

3C - Denotes a high estimate of contingent resources.

% - Percentag

Reserves are those quantities of petroleum anticipated to be commercially
recoverable by application of development projects to known accumulations from
a given date forward under defined conditions. Reserves must satisfy four
criteria: Discovered, Recoverable, Commercial, and Remaining (as of the
evaluation's effective date) based on the development project(s) applied.
Reserves are recommended as sales quantities as metered at the reference
point. Where the entity also recognizes quantities Consumed in Operations
(CiO), as Reserves these quantities must be recorded separately.
Non-hydrocarbon quantities are recognized as Reserves only when sold together
with hydrocarbons or CiO associated with petroleum production. If the
nonhydrocarbon is separated before sales, it is excluded from Reserves.
Reserves are further categorized in accordance with the range of uncertainty
and should be subclassified based on project maturity and/or characterized by
development and production status.

Contingent Resources are those quantities of petroleum estimated, as of a
given date, to be potentially recoverable from known accumulations by
application of development projects, but which are not currently considered to
be commercially recoverable due to one or more contingencies. Contingent may
include, for example, projects for which there are currently no viable
markets, or where commercial recovery is dependent on technology under
development, or where evaluation of the accumulation is insufficient to
clearly assess commerciality. Contingent are further categorized in accordance
with the level of certainty associated with the estimates and may be
sub-classified based on project maturity and/or characterized by their
economic status.

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