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  • Writer's pictureMark Watson-Mitchell

Angus Energy – will Lucan’s shareholders get lucky this year?

After having lost £111.95m in the year to end September 2022, the big question is will shareholders in the AIM-quoted Angus Energy (LON:ANGS) see any recovery in the current year?


It is an independent onshore oil and gas development company focused on advancing its portfolio of licensed UK assets.


It must be stated that £110.31m of that loss was down to a derivative position based upon the future production and calculated using forward gas prices as at the year end.


The energy hedging contract was based upon selling forward half of the production at the group’s Saltfleetby Gas Field, in East Lincolnshire. The contract, from July 2022, was for three years, based upon a price set in the Spring of 2021.


Perhaps understandably because prices in the intervening period have risen significantly, due to the Ukraine conflict. However, it only covered half of the production for that period of time.


Its Interests


The £48m capitalised group, which is due to hold its AGM at the end of this month, is focused on leveraging its expertise to advance its portfolio of UK assets as well as acquire, manage and monetise select projects.


Described as an independent onshore Energy Transition company, it has a complementary portfolio of clean gas development assets, onshore geothermal projects, and legacy oil-producing fields.


The company is not only the 100% interest operator of the Saltfleetby gas field, which is in producing gas directly to the National Grid, but it also has exploration and production at its conventional oil assets of Balcombe, Lidsey and Brockham.


Angus Energy holds a 25% stake in and is the Operator of the Balcombe Discovery along with its partners Cuadrilla and Lucas Bolney.


The Balcombe site (PEDL 244) lies approximately 8km south-east of Crawley near the village of Balcombe.


The Lidsey Oil Field is located in the production licence PL241, onshore West Sussex near Bognor Regis, on the southern flank of the Weald Basin.


The company is the operator and majority partner of the licence and currently holds an 80% interest in the field.


The group is the operator and majority partner of production licence PL235 located in the Weald Basin, onshore UK. It currently holds a 80% interest in the Brockham Field.


The company has stated that it plans to use its geological, drilling and engineering skills to take the opportunity to repurpose onshore hydrocarbon wells for the production and storage of geothermal energy and the use of older fields for the storage of CO2 or hydrogen.


Proposed Board Reorganisation


Former Head of Exploration at BP, Richard Herbert, will be appointed Chief Executive with full control of day-to-day operations, while George Lucan is looking to take up the role of Executive Chairman focussing upon strategy and stakeholder relations.


Shareholders


There are 3,484,101,882 shares is in issue, of which Forum Energy Technologies is the largest shareholder (13.4%), others include Aleph Fin C (6.60%), Kemexon (6.39%), Knowe Properties (2.81%), Jaspal Singh (1.17%), Gneiss Energy (1.14%), PJ Tidswell (0.81%), Marr Sebastian (0.61%), Aleph Commodities (0.53%) and Adegbenga Alabi (0.38%).


Outlook


With production at Saltfleetby increasing, the company looks forward to achieving positive operational cashflow. It is confident that it will be a successful producer, with flow testing planned for late March and gas export expected from 1st April.


It will continue to explore further gas opportunities and mature its geothermal projects in the south-west of England, with the intention of not only creating shareholder value but also to address the urgent need for transition energy projects.


Conclusion


The group has the vision of becoming a significant player in the aggregation, production and storage of gas, with its current interests progressing it is now beginning to put its bricks in place in order to achieve its ambitions.


After quite a transformational year in 2022 the company now looks to be on track for delivering sales gas volume growth and profits in 2023.


Its shares, which were up to 2.72p last September, are currently just 1.375p each, from which level there should be a significant upside.


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