Angus Energy Plc · LSE:ANGS
Angus Energy — Investor Presentation (September 2021)
42 slides from Angus Energy's investor presentation, September 2021
Slide 1: Transition Energies
Transition Energies
Slide 2: Our Company
Our Company “… a return to ‘business as Be a low-cost UK Maximise the conversion usual’ [for oil and gas] is no producer of baseload value of geothermal longer an option. Government geothermal power heat support is in the context of delivering our net zero target. Provide handsome IRRs Advance the p
Slide 3: The Electric Challenge
The Electric Challenge • Natural gas is now clearly the last large carbon intensive element in the 77 GWe mix. • Much gas capacity is retained simply to support wind and solar. • The next steps in decarbonization will involve methane to hydrogen transformation and … • … the smoothing of variable out
Slide 4: The Transport Challenge
The Transport Challenge • Over half of UK oil products (blue) consumption is for road transport • Easy to see that this half is equal to more than 2/3rds of all electricity consumption (beige) • Switching 100% vehicles to EVs would require almost doubling total UK installed electricity capacity … •
Slide 5: Geothermal as dual solution
Geothermal as dual solution • Even with high (i.e 200C) temperatures the conversion of heat energy to electricity in conventional steam turbines can be circa 12% • Thus for every 1 GWe of geothermal electrical generation capacity about 8 GWe of heat energy is, where ancillary use cannot be found, pu
Slide 6: II: Commercial Proposition
II: Commercial Proposition NPV per site for equity holders of Scaleable proposition from MW to GW £30m at average price of 8p/kwhr Long-term IRRs for equity of between All debt refinanced in year 5 to lower 20% and 30% utility style interest rates Achievable financing with structured mix As with O&G
Slide 7: Illustrative Economics
Illustrative Economics Target per site – 20 MWe Capex and Opex per site – 20 MWe • Long-life assets 30 years + • Assumes 4 doublets of disposal and producer wells • Low technology steam generation of electricity • Capex £10m/producer well, £4m per disposal well • Baseload generation • Surface genera
Slide 8: Economics Different for each Site
Economics Different for each Site • Management believe that the variability of the Some other variations economics is overwhelmingly to the grid wholesale price of electricity and the efficiency of • Differing temperatures result in different surface conversion of heat to electric equipment and cape
Slide 9: Sensitivity to Conversion of Heat to Electric
Sensitivity to Conversion of Heat to Electric In addition to being highly sensitive to wholesale electricity prices, the cashflows are exceedingly sensitive to conversion efficiencies. The Company is actively engaged in the development of well and turbine design to improve these efficiencies from th
Slide 10: Offtake Possibilities
Offtake Possibilities 10 Angus Energy
Slide 11: To which we add Green Hydrogen
To which we add Green Hydrogen • Electrolysis is a very well worn technique. Large Alkaline water electrolysis is a well established scale applications were in place in the 1950s in technique for hydrogen production. Scaled, tried the nuclear industry. and tested faclities exist for production of 50
Slide 12: Target Roll-out of Producer & Disposal Wells
Target Roll-out of Producer & Disposal Wells • Four Doublets (Producer/Disposal wells) per Site – 20MW • Four Sites in 8 Years – 80MW • Year 1 – Site Acquisition, Planning, Design • Year 2 – Initial P(roducer)1 and D(isposal)1 well drilling, flow test • Year 3 – Connection Generation, Sales, P2+D2 •
Slide 13: Evolution of risk-to-capital of a 2-doublet programme
Evolution of risk-to-capital of a 2-doublet programme Chance of success improves radically on the drilling of the shallow disposal well for c. £4mn making the deeper producer well a better risk reward proposition. Subsequent wells within the same fault system present significantly lower exploration
Slide 14: Key is Derisking the Proposition for both Equity and Debt
Key is Derisking the Proposition for both Equity and Debt • Increase the chance of success by better subsurface studies (see Part III) • Reduce the cost of failure by reducing drilling costs (see Part IV) • Organise the programme for lowest capital at risk • drilling shallower disposal well first •
Slide 15: Role of Government
Role of Government • Most deep geothermal to date has enjoyed considerable upfront grants as well as ongoing support. • Presently an enhanced grid offtake rate per MWhr is available through the annual CfD auction. • Additionally a range of grants are available for research purposes and in recent wee
Slide 16: Further Progress
Further Progress • Three fault systems identified • Full field survey completed • Well design and rig analysis progressed • Developing research programme with a university and turbine manufacturer • Discussions with offtakers inc. DNO, and NG initiated • EA preliminary discussions • Equity and debt
Slide 17: How long can it last?
How long can it last? – Piero Ginori Conti’s monster is still breathing after a century 17 Angus Energy
Slide 18: III: Be sure of the reservoir
III: Be sure of the reservoir Know the Reservoir in Deep vs shallow capex detail Target largest fault Find best fracture & systems heat zones Improve conversion De-risk Seismmcity of heat 18 Angus Energy
Slide 19: Shallow Reservoirs
Shallow Reservoirs • Shallow Geothermal tracks volcanic activity closely. Depths of as little as 100 metres • 14 GWe of Installed Electrical Power • 3.8 GWe USA (from 1960) • 1.9 GWe Philippines (from 1979) • 1.9 GWe Indonesia (from 1923/83) • 1.0 GWe Mexico (from 1959) • 0.9 GWe NZ (from 1958) – 17
Slide 20: Deep Reservoirs
Deep Reservoirs Location: St Austell, UK Operator: Eden Geothermal TD: Drilling in progress (4.5km target) Temp: TBC °C Spud Date: 2021 Capacity: TBC Location: Redruth, UK Location: Landau, Germany Operator: GEL Operator: Geox GmbH TD: 5275 m TVD TD: 3170 m TVD Temp: 188 °C (BHT), 170 °C (production
Slide 21: Deep Reservoir Economics
Deep Reservoir Economics Getting to the energy • Drilling deep means more time with rig and crew • Material costs – 3km (EU) to 5 km (UK) of steel pipe rather than 0.5km • Volume of waste cuttings to dispose of • Heavy (expensive) rigs are traditionally thought necessary Getting the energy back to s
Slide 22: Our Deep Reservoir
Our Deep Reservoir • We want >> 1 GWe from the Cornubian batholith lying between Dartmoor and the Scilly Isles. • A huge stretch of magma-formed granite out of which certain outcrops or “plutons” emerge …. • Dartmoor, Bodmin Moor, St. Austell Moor • The plutons contains high concentrations of metall
Slide 23: Target Zones
Target Zones • The granite pluton or Cornubian Batholith – marked 3 opposite – can vary in thickness and geometry. • During the formation of these bodies, at extreme temperatures, heavier elements tend to be thrown to the periphery of the plutons. • This means we can detect the shape of the pluton w
Slide 24: Faults and Fractures
Faults and Fractures • If the plutons were sheer granite welded into outlying country rock, there would be no fractures and therefore no water and geothermal wells demand > 25,000 barrels per day circulating • In practice the target zones are areas where large fault systems have displaced the granit
Slide 25: Existing Datasets
Existing Datasets • The BGS dataset comprises gravity observations over onshore Great Britain. Most of the surveys were carried out by the BGS but the dataset includes data originally acquired by other organizations. • The Tellus SW project acquired airborne geophysical data for the counties of Corn
Slide 26: New Gravimetric
New Gravimetric Austinbridgeporth in N conjunction with Imperial College successfully carried out a land gravity and radiometrics survey over a 35km2 area of interest in July 2021 The gravity data was recorded at 200m intervals along the survey lines with spacing of 250m and a total of circa 700 sta
Slide 27: New Radiometric
New Radiometric • As previously mentioned, radiometric data was acquired over the area of interest • This shows the extent of this data overlain over the legacy Tellus SW dataset. N • The better the radioactivity the higher the heat source 27 Angus Energy
Slide 28: Radiometric – elements
Radiometric – elements Abrupt changes in radiometric data assist in fault detection N Uranium Thorium Potassium 28 Angus Energy
Slide 29: Fault finding
Fault finding • The gravity responses and anomalies are representative of the density contrasts within the subsurface. • Bringing together, gravimetric, radiometric N and geological data, key structural trends such as faulting can be interpreted, and the boundary of the granite can be mapped • This
Slide 30: Seismicity in Western Europe
Seismicity in Western Europe • Seismicity in the UK is very light compared to continental systems • Seismicity has caused issues for drilling in the Upper Rhine Graben (the intersection of France, Germany and Switzerland) • We still need to be mindful of the fact that the UK’s best fault zones are t
Slide 31: IV: Getting Costs Down
IV: Getting Costs Down Design for ease of Design for smaller rigs service Reduce casing Minimise well testing volumes time/costs Generate nearer Keep wells straight source 31 Angus Energy
Slide 32: Why costs have been high to date
Why costs have been high to date • Drilling deep means more time with rig and crew • Material costs – 5 km of steel pipe rather than 0.5km • Volume of waste cuttings to dispose of • Heavy rigs are traditionally thought necessary • Pioneers tend to overengineer as they enter the unknown sometimes rep
Slide 33: Reducing the rig requirement
Reducing the rig requirement • Using a simplified well design, whilst meeting safety and environmental needs, we can use smaller locally available rigs • The simplified well design uses less steel casing reducing the cost of materials • The well completion (the tubing used to produce the water from
Slide 34: Well location and profile
Well location and profile • Angus have previously mentioned their concept of drilling through the surrounding rocks for speed and only entering the granite at depth • However, directional drilling is expensive and can be difficult in very hot wells • By reverting to older simpler cheaper methods the
Slide 35: Drilling innovations for the future
Drilling innovations for the future • The method of drilling affects not only the size of rig used but also the rate of drilling • There are existing drilling methods appropriate to brittle hard rocks that have been used primarily in the oil and gas industry that may be transferable to geothermal dr
Slide 36: Well Testing
Well Testing • The testing of a geothermal well can be a very expensive business requiring mobilisation of a large rig and a spread of equipment for a prolonged period • Angus are planning to complete the well once in a way that enables changing out of the critical components with a small workover r
Slide 37: Minimising Heat/Friction Losses in Well
Minimising Heat/Friction Losses in Well • Geothermal heat should be converted with maximal efficiency or returned to source. There is no room or acceptance of waste in the current climate. • Heat Loss in the wellbore can significantly reduce the energy available to covert to electricity or for other
Slide 38: Thermodynamic Engagement
Thermodynamic Engagement • Angus are using an engineer with experience of steam generation and processing to examine the thermodynamics of flashing the steam in the well • This approach may offer the possibility of avoiding or reducing the need for pumping by using the gas lift opportunity given by
Slide 39: Lessons Learned from projects in UK and Europe region
Lessons Learned from projects in UK and Europe region • Wellbore T > 130°C costs rig time to cool BHA especially if it equipped with expensive MWD/LWD tools • On high temperature wells tripping is 40% of rig time • Many days spent in pressure testing equipment • Poor bit performance achieved drillin
Slide 40: Lessons Learned from projects in UK and Europe region II
Lessons Learned from projects in UK and Europe region II • Design the well trajectory so there is no need for directional work beyond 130°C • A good and reliable mud cooling system is a key to reduce rig time • Prepare a drilling programme where minimum trips are required • Equipment to be pressure
Slide 41: Disclaimer
Disclaimer This presentation is solely intended to inform existing and potential shareholders of the activities of the Company and the views of management on those activities. It is not intended to form part of any invitation by the Company to subscribe for shares and has not been prepared in connec
Slide 42: Contact
Contact Angus Energy Plc www.angusenergy.co.uk Managing Director: George Lucan T: 0208 899 6380 info@angusenergy.co.uk
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