Angus Energy plc (AIM: ANGS) is pleased to announce the completion by Oilfield International, an independent energy consultancy, of a Competent Persons Report on the Saltfleetby Gas Field in PEDL005, in which Field Angus Energy has an interest of 51%. All figures that follow reflect this shareholding and are thus the net reserves, resources or present value that is attributable solely to Angus shareholders.
The full report is available on the Company website under Presentations at the following link http://www.angusenergy.co.uk/media/presentations/ In this RNS we set out Oilfield International's view of the high, mid and low cases that are set out for both reserves (3P, 2P, 1P), contingent resources (3C, 2C, 1C) and net present values as set out in tables below.
Focusing on the mean sales gas reserves, approximately equal to the 2P case, these are estimated by Oilfield International at 16 billion cubic feet (BCF). Also forming part of mean reserves are 97,000 barrels of condensate. The total cash flow after costs but before taxes of these reserves is approximately £50 million at prices derived from the gas forward curve from ICE exchange and an average forward condensate price of $42/bbl.
Oilfield International has also assigned mean contingent resources of 10 BCF.
The report envisages capital expenditure to Angus of £1.5 million (mean estimate) to bring the gas on stream in 2020 and to drill a horizontal side-track to well No. 5 during H1 2021, the latter to accelerate recovery. The Board does not anticipate any other capital expenditure to capture and monetise these identified reserves. The Board may however consider further expenditure from 2022 onward to monetise the contingent resources.
The report reports the net present value of the above reserves, but not the contingent resources, which it defines as the gas and condensate sales revenue minus the grid connection costs, capital expenditure, operating expenditure, taxation and abandonment cost, and adjusted for the time value of money. The resulting mean value of the reserves to Angus shareholders, which is also the central case, is just over £25 million, with a high case of £35 million and a low case of £16.7 million.
In terms of the price per issued Angus share these low, mid and high NPV cases are therefore estimated by the Company to be worth respectively 2.9 pence, 4.4 pence and 6.1 pence per share.
George Lucan, Managing Director, writes "This is clearly a gem of an asset and a just reward to loyal shareholders. We look forward to converting these reserves into clear cash and positive cashflows whilst keeping open the possibility of further substantial upside from the contingent resources. The exercise has been immensely useful for Angus management in identifying opportunities within the field as well as planning for connection and long-term operation. We are very grateful to Oilfield International for their hard work."