Page 11 - Euroil Week 10 2020

EurOil PROJECTS & COMPANIES EurOil
Angus cheered by Saltfleetby reserve report, but losses widen
UK
Angus is looking to restart the shuttered field in 2020.
LONDON-LISTED Angus Energy’s plan to restart production at the UK’s former-largest onshore gas field has just got a boost, with an independent analysis estimating its remaining 2P gas reserves at over 900mn cubic metres.
The Saltfleetby field entered production in 1999 but was shut down in 2017 after most of its recoverable gas had been extracted. Originally plans were put forward to use the field’s reser- voirs as gas storage, but this project was deemed to be uneconomical.
Angus, which works at onshore fields in southern England, bought a 51% stake in the asset last year, announcing its intention to exploit the field’s remaining gas instead.
The company said on March 5 that a compe- tent persons’ report had been completed, plac- ing the field’s 2P reserves at 906 mcm, including around 453 mcm net to itself. The report, under- taken by Oilfield International, also estimated the field to hold 190,000 barrels of condensate.
Angus aims to restart production in 2020 and then drill a horizontal sidetrack well next year at a cost of GBP1.5mn ($1.95mn), in order to boost recovery. No other capital expenditure is needed to monetise the asset, the company said, but its shareholders can expect a return of GBP25mn ($32mn), it said citing the report.
“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 pos- itive cashflows while keeping open the possibility of further substantial upside from the contingent resources,” Angus CEO George Lucan said.
The positive analysis is a bright spot for Angus, which also on March 5 posted a widened loss as a result of increased administrative costs and an impairment charge.
Its pre-tax loss for the year ending September 30 came to GBP5mn, versus GBP2.8mn in the previous period. Admin expenses climbed 7.8% to GBP3mn, and the firm booked an impairment charge of GBP900,000.
“The year to September 2019 was unquestion- ably a difficult year for the Angus Energy Group, which saw first boardroom upheaval, a one-year delay to confirmatory works at Balcombe, fol- lowed by the discovery that the Kimmeridge well at Brockham would not commercially flow oil as part of conventional operations,” the com- panysaid.“Asaconsequence,inpart,ofthispoor operating result, the group’s financial resources were strained, resulting in a succession of equity placings. Finally, as a backdrop to this, the reg- ulatory environment has become steadily more challenging and all the while the question of sus- tainability bedevils the UK’s onshore oil and gas i n d u s t r y .” ™
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