Angus Energy (LSE:ANGS) — Investor Presentation

0:02 Good afternoon, ladies and gentlemen, and welcome to the ANGUS ENERGY Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Just simply type in your questions at any time and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today, we'll publish those responses where it's appropriate to do so on the investment company platform. Before we begin, we'd like to submit the following poll and I'm sure the company will be most grateful for your participation. And I'd

0:33 now like to hand over to Richard Herbert, CEO. Good afternoon. Yes. Well, afternoon, everybody. And thank you very much for joining this investor presentation from ANGUS ENERGY and also thank you to those of you that have submitted questions ahead of the meeting. We hope to see some more questions coming in from you as the meeting progresses. As you know we have been very active operationally and with our refinancing project during the last few months. Now that the refinancing has closed this is a good time to review the way forward for ANGUS having now achieved some good stability both operationally and financially. I'm joined in this webinar by our newly appointed interim chair Chris Zielinski who's sitting on my left hand side.

1:26 Chris has been a non executive director of ANGUS for the past two years prior to his appointment into the chair role. And also on my right hand side is our Wells and subsurface director Ross Pearson who joined ANGUS in the middle of last year and who brings a very deep experience of onshore oil and gas operations including here in The UK. Unfortunately, our Finance Director, Carlos Fernandez, was unable to join this meeting because he was called into jury service this week. I'm now going to switch to the slides so that we can start the presentation. Plan here is to talk through the presentation and then we'll go to the Q and A at the end of that.

2:16 And so this slide shows the structure of the event. I'm going to start with a brief update on HSE and operations and also a summary of the results of the refinancing and then Chris is going to take us through our financial results for the financial year which ended in September 2023. Ross will then take over to talk about our development plans with the assets that the company has and then I will touch on strategy and future plans for ANGUS. Before we have a quick word on the recent changes on the Board of Directors and moving to the Q and A. So that's the plan for the session.

3:03 This slide really summarizes what we believe that the company is at the moment. We've obviously been working in the last year and a half to put a new production facility into operation and that always has its gremlins, its problems that we have to deal with, but we believe that we have stabilized production now from Saltfleet D and I'll talk a little bit about that in a minute. We have attracted a strong management team to the company composed of individuals with many decades of industry experience and much of it with majors like BP, Shell, British Gas. The refinancing has stabilized the company's balance sheet providing funds for the attractive investment options that we have within our portfolio and it has also introduced Trafigura as a strategic partner going forwards because Trafigura as you know is a very large trading company that is not necessarily interested in companies of the size of ANGUS but it sees it as an exciting growth opportunity and they would like to work with us to grow the company in the future.

4:26 We have very healthy gas reserves as confirmed by the 2023 competent persons report that we published and as Ross will describe we have potential reserves upside and the possibility in the longer term of converting the salt fleeting field into gas storage. And we have a range of growth opportunities both within our current portfolio and also outside as the oil and gas industry continues to consolidate and financing of oil and gas projects gets harder, we believe that we will have a very strong competitive advantage working with a partner like Trekker. So let me move now to a quick update on first of all HSE which is very important priority for ANGUS. We're very conscious of the requirement to operate in a safe and environmentally responsible manner.

5:23 This is a priority for me as the CEO, for our management and for all of our field operators. And I'm pleased to say that we haven't had a recordable injury in any of our operations since December 2022. On the environment, we have been meeting our flare consent limits and our emissions monitoring is ongoing and we actually have an agenda to reduce our emissions over time and we've just for example invested to replace all of the burner tips in our flares at sort fleetly so that they burn more efficiently. We've had no regulatory breaches this year to date and our main environmental improvements are now focused on noise because we do have neighbors although we're in a rural area we do have people living near the field and there is quite considerable noise that comes from our from our two compressor units.

6:24 So we installed monitoring stations to to in order to be able to measure the noise levels and proactively manage noise over time and we're also in the final stages of designing some acoustic hoods that will be put over the compressors which we are confident will reduce the noise levels to within the statutory levels that we're required to operate to. We can't fully enclose the compressors because they're they're running on natural gas and there is natural gas flowing through them, so that wouldn't be safe, but we can put these hoods over the top. If I turn now to production, obviously, the salt fleet gas probe is currently the only asset which which ANGUS has in production.

7:15 In the first quarter of twenty twenty four, and that's the quarter that's just about to end, we forecast that we will deliver between six point eight and six point nine million therms of sales gas to the national grid, which is equivalent to 2,300,000 therms of sales gas a month or 75,000 terms a day. And if we want to put that in terms of that we're more used to in our industry of gas flow rates that's 194,000 cubic meters a day or 6,900,000 standard cubic feet and that production is coming from the three wells that we currently have in production. Going forward our expectation for daily production with dual compressor operation is between seven and eight million cubic feet a day. So we think we can do better than the first quarter when we've been doing quite a lot of maintenance both planned maintenance and also some unplanned maintenance on our compressors.

8:21 Operational efficiency in the first quarter is forecast to be over 90% and it's continuing to improve. As I said efficiency this quarter has been impacted by compressor maintenance shutdowns. We made a planned intervention in the a compressor for regular service and we also made an intervention in the in the b compressor engine in order to replace all the cylinder heads. We had dual compressor operations reinstated on the March 20 and now sales gas flows are increasing again as we clear the fluids from the wellbores.

9:07 Our wells continue to perform as expected in line with the forecasts that were made last year at the time of the competent process report. Many of you will remember that after the drilling and tie in of the third producing well E7 last year, there was a long period of well cleanup due to the large quantities of mud additives that were flowing back. We had a lot of solids production from that well and this required the use of expensive rented temporary flow line equipment and a temporary separator to prevent the solids from entering the main production separator. Fortunately that solids production dropped off at the end of last year and we were able to complete the installation of the permanent flow line for that well and that has brought our operating costs down by over £100,000 a month and we are now operating at an equivalent operating cost of £13.50 per barrel of oil equivalent, which we believe for onshore UK is very

10:19 competitive. To maximize the economic recovery of gas and condensate from salt fleet B, as we outlined in the competent persons report last year, we have also ordered a booster compressor which is being constructed in The US and which will be delivered to this country and installed on-site during the fourth quarter of the year.

10:47 And the front end engineering design on that compressor is progressing well. What that compressor does is it allows us to draw the reservoir pressure right down to what we call a bandana pressure which is probably just a few bar three or four bar pressure which allows us to get as much gas out of the field as we possibly can. So I think in summary on operations after some plant reliability challenges during 2022 and 2023 and the impact of the solids production from the new B7 well, operations have sold completely have now stabilized and are achieving our targets. And with the successful closing of the new debt facility with Trafigura, which I'll talk about in a minute, we're also in a position to now purchase critical spares which we can keep in Lincolnshire and which will allow us to minimize downtime when dealing with unplanned maintenance issues in the future.

11:48 O'Dangus is currently shut in oil fields in Southern England at Brochham and Lindsay. We've been working to clean up some of the tanks and make repairs to some of the equipment in preparation for the restart of production in the near future and Ross will be speaking about that in a few minutes in his development section. Going forwards, ANGUS will report on production on a regular basis. We'll provide information about our operational efficiency and the progress with our development projects to raise production so that our investors can see on regular basis how the company is doing. I'd now like to move and talk about our refinancing project which closed in late February.

12:38 As we announced in February, we've entered into a new senior secured debt facility with commodity trader Trafigura and

12:51 that facility which has now been fully drawn provides ANGUS with £20,000,000 which we're using to repay existing debt, manage our creditors and provide the CapEx for the planned projects that the company wants to undertake on its assets. Before we discuss the new facility, I think it's important just to remember the context behind the refinancing exercise. As you will recall in 2021 the company raised £12,000,000 of debt for the redevelopment of the Sault Flippi field and the drilling of the B7 well. And in 2022 it agreed to buy a 50% share of the field which it didn't own which was owned by a company called Fora for a consideration of £6,250,000 and that was treated as a deferred consideration to be paid over time as cash flows permitted.

13:49 The initial development loan was accompanied by a financial hedging program which started in July 2022 and which ends in July 20 in June 2025 in which about 65% of our forecast production was forward gas production was hedged in swap instruments a of about 45p per third which was the prevailing price at that time in 2021. As you know the Saltfleetby field startup was not achieved until the end of August twenty twenty two which was some two months after the start of the hedging program and given the extremely high gas prices in 2022 as a result of the Ukraine war, this resulted in significant hedge losses to ANGUS of over £7,000,000 which were then deepened by some production issues in the later part of 2022.

14:54 So in addition to the hedge losses there were also cost overruns on the plant commissioning due to engineering problems with gas compression trains and the condensate stabilization unit which are now thankfully resolved.

15:08 And the B7 well which was drilled in twenty twenty two-twenty three encountered a series of drilling difficulties which resulted in the well costing significantly more than had been predicted. So in March and July 2023, ANGUS took on two bridge loans totaling GBP 9,000,000 to manage these cost overruns and hedging losses. The March loan of GBP 3,000,000 was converted to shares in October last year and the remaining GBP 6,000,000 bridge loan, which was expensive and due for repayment in January of this year necessitated the refinancing of the company's debt in order to stabilise our financial position. The new facility with Trafigura has allowed the remaining principal on the original senior debt to be repaid alongside outstanding bridge loan and interest and also we've paid off close to 40% of the balance due to Forum for the half of the company that was purchased in 2022.

16:13 The company now has sufficient liquidity to settle with legacy creditors from the drilling operations on the V7 well and to plan for capital expenditure at Salt Flickley including the booster compressor that I mentioned, the acoustic hoods, critical maintenance spares and also the preparations for future drilling which Ross will talk about later. And the Brokham field is planned to restore oil production in the second quarter of this year. A summary of the terms of the new facility are on the slide that you're seeing here. It's a five year facility. The interest rate is 8% above Sonia and we have no principal repayments due until March 2025.

17:01 So although the amount of debt that the company has has gone up, the actual cost of that debt is similar to what we would have been paying under our previous smaller debt if the refinancing hadn't happened. As part of the refinancing package Trafigura will act as sole off taker of the sales gas produced at the field for a five year period on terms which are in line with the previous offtake agreement that we had with Shell. The development loan hedges that were put in place in 2021 have been novated to Trafigura until their expiry in June 2025. After that, ANGUS will be required to maintain a hedging position, hedging a portion of its twelve month ahead and its twelve to eighteen month ahead production until the facility has been fully repaid.

17:58 Foreign Energy Services deferred consideration for the 50% of the field acquired by ANGUS has now been reduced to GBP2.9 billion and we have put in place a payment plan to clear the outstanding balance by June 2025. And finally as agreed with when the original loan for field development was taken out in 2021, repayment of the original senior debt has triggered the payment of an 8% royalty to our former lenders which was triggered on the first of March this year. That royalty payment only applies to existing wells, so if we if and when we come to drill new wells in the future royalty will not apply to them.

18:48 And now having gone through the refinancing, I'm going to hand over to Chris who will take you through a summary of the financial results which we recently published. The financials for the year end September 2023 show a healthy revenue of 28,200,000. This is despite only operating with one compressor until May 2023 when the second compressor was commissioned.

19:26 The resulting EBITDA was 17,000,000 with an operating profit of 4.8. The main difference between EBITDA and profit was mostly made up by a depletion adjustments for the reserves, which we hope you'll hear more about how in fact reserves hopefully will be increased due to some of the work we're doing. The profit for the year though is an amazing 117,800,000. This is an amazing number, especially when you look at the earnings per share. Considering the share price is 0.4 today, you're talking about an earning an earning per share of 3.4p, which is 10 times almost the share price.

20:22 The major factor for this amazing profit or this substantial profit was from the derivative instruments, which in fact came to about 130,000,000. This number reflects the improvement in the delta between the more recent forward prices and the hedges applied during the period when the original financing was arranged.

20:53 It is a paper sort of profit. However, it basically reflects us a much better sort of position around the hedges as prices for the hedged volumes have actually decreased. I move on to development plans, and I hand over to my colleague. Thanks, Chris. Waiting for the slide there, Jim. Good. Yes. So just to be clear, because I don't think you can see us, Ross is going to now take over to talk about our development plans. Yeah. So now the fun part. As Richard mentioned in the introduction, I've been looking across ANGUS' asset portfolio to to identify and advance organic opportunities with an obvious starting focus of of the salt safety field.

21:48 ANGUS ENERGY has recent recently completed a number of work streams to refine our understanding of the field. The first being, obviously, as Richard mentioned, the the renewed CPR assessment, which was published October 2023.

22:06 Additionally, we've done a bottom up geological interpretation of the field, which includes reprocessing and reinterpreting three d seismic, which has generated a high resolution top structure map. We've done a new stratigraphic correlation of the reservoir unit. We've arrived the petrophysics, the well logs, and we've done a probabilistic evaluation of volumetrics, which indicates potential upside, which is not captured in the reported reserves. I'll take you through some more details on that in the coming slides. So going forward, we will identify drilling opportunities to accelerate production from Salt Flapie and potentially increase the field wide reserves. This will require renewed geological and dynamic reservoir models, utilizing the new base structure map and the revised petrophysics.

22:56 In order to reduce the capital development costs, we'll look at utilizing existing suspended wells for sidetracks, but we will also considering drilling new wells, designed to optimize production. A planning application is currently being drafted to be submitted to Lincoln County Council for permission to drill additional wells before we submitted mid-twenty twenty four. Our medium to long term strategy for Salt Lake B is to assess the viability of natural gas and CO2 storage. To this end, we've signed a MOU with Trafigura Trafigura to evaluate the potential results affected in the next eighteen to twenty four months.

23:41 This could be a significant opportunity for ANGUS. There's currently very limited gas storage capacity in The UK or alternatively, if it's deemed the field would be better suited for CO2 disposal. It's in an ideal location with a very close proximity to the planned Viking c o two pipeline. So the the competent first report completed in 2023 by Oilfield International of the Salt Pit Slimpy field, the results are summarized in the table below. Notably, there's the seven BCF of two p sales gas with the associated liquids. Along with the reserve assessment, the CPR also demonstrates a very strong cash flow and excellent economics as displayed in the table attached.

24:36 If you want to have a look at the CPR, the full CPR is published on our website, and there's a link on the presentation.

24:44 So as mentioned, ANGUS has completed a revised geological, geophysical, and petrophysical analysis of the salt reefer field with some very encouraging results. Most notably, being an indication of a much deeper gas water contact than previously assumed. This has a potential to have significant gas in place and potential to discover undeveloped or under underdeveloped resources within the field. This is the structure map that we're looking at on the slide, and it demonstrates the impact of the deeper gas water contact with the yellow yellow polygon in the middle being the previously assumed gas water contact and the orange and red representing the most likely and maximum gas water contact.

25:32 As you as you can see, this significantly increases the size of the field and in turn, the volume of gas within the reservoir. You'll also see three sections that have been identified, signified by the one, two, and three. This is where we've identified, Crestle Sands in the two a two a or two b reservoir. So this is a revised reservoir cross section of the Westphalian Reservoir from the sulfate field. The main reservoir section is in the middle, which is the one c slash d reservoir

26:11 in that yellow color, And it's likely where from the horizon that's contributed to the major historic and current production from the field. As the reserve of CPR look at the connected volumes, it is also where the majority of the 27 Bcf of 2P remaining reserve would be likely to produce from. So this this analysis has also highlighted some areas of Prudential

26:36 unconnected sections of the reservoir, and that's signified by the stars you'll see on the cross section. The main being the one at the bottom, the deeper Numerian target, and then you'll see two the two upper higher stars on the on the cross section represent areas of the two a and two b sands, which may not be drained.

26:59 From and so from just sort of general comment. From the perspective of well delivery, operating costs, and the efficiently newly built facilities, so it will be the premium onshore field in The UK, and and as we've shown here, still has significant growth potential. So that brings us on to the southern oil fields. ANGUS has three oil license in the Weil Basin in Southern England. There's the Brockham Field, Lidsey Field, and Bulkham Field, which are all highlighted in orange on this map. The three sites are currently suspended, but we're putting together work programs to bring the sites back into operation. So first, the Brockham Field, which has three wells, two suspended oil cruisers, and one water injection well, which is used for pressure support in Portland Reservoir.

27:52 The first step from the Brock the first step in the Brockham restart will be a workover of the Brockham 2Y well to replace the tubing and install a downhole pump in order to bring back on production, along with restarting the Brockham three pressure support well. Brockham restart is the furthest advance in our portfolio requiring with all the regulatory requirements already approved, sorry, all the regulatory approvals already in place and site preparation for rig arrival is underway. We anticipate having the rig on-site in Q2 this year. The initial production from this well is circa 20 barrels a day, but has potential to increase that to 50 barrels a day with some upgrades once the wells back online and we've established stable production.

28:45 As the workovers are relatively low, this is a very economically robust project. Additionally, on success of this project, we have an additional well that we can recomplete in the same formation, which will add to the total production from the field. Onto the Lindsay field, which is currently suspended due to high water disposal costs. However, if we can dispose of the water at our Brockham site, there's potential to significantly reduce the costs and get the field back online. The planning application is currently being drafted to gain approval to bring off-site water to the Brockham Field. Not only will this allow the economic restart of the Litvi Field, but it will also assist in the Brockham pressure support in the producing reservoir.

29:34 So welcome after extended planning delays of the Welcome field, we believe that the most recent appeal to our planning approval will be dismissed by the court, and we will again have permission to conduct the planned extended well test on the horizontal

29:51 well to Z site. So what was considered appraisal project? We believe there's a significant oil potential in the Cambridge formation as proven by the offsetting Horse Hill field, which is produced from the same reservoir. Just to give a little background, the Kimmerer formation is a naturally fractured limestone with proven quantities of oil and the ability to flow at higher rates. The extended well test that we have planned is required to confirm the commercial oil rates that are achievable, but also to properly design a production facility in the future. Ross, thank you very much for that. To wrap up now, let me just talk for a bit about our strategy and future plans.

30:43 So now with this background of stable production and cash flow generation and our strength and balance sheet, ANGUS is now looking at growth. We have a management team with many years of experience in international oil and gas operations. And as Ross has just described, we're evaluating multiple opportunities for growth in our existing assets, including the potential for gas storage.

31:12 We see a large number of inorganic options both in The UK and internationally and are in the process of developing a strategy consistent with our capabilities to secure new assets for the company and we expect to be assisted in this process by our new strategic partner Trafigura. And obviously as we go forward on this new path and look at new opportunities, we will be keeping our investors updated on our strategic growth plans. Let me now hand over to Chris to just say a few words about our Board of Directors and then we'll move to the Q and A session after that.

31:53 Over the past year, ANGUS has become the largest onshore gas producer in The UK. This is a major achievement. We have further refinancing at the same time has given ANGUS a stable platform for future growth both organically and inorganically. So we have basically stabilized production and we've stabilized all our finances.

32:18 The recent board is reflect ANGUS' alignment with this growth strategy. My personal experience is over forty years in the energy business, thirty of those specifically in the M and A space. We believe that the changes and there'll be a few more which will reflect this new direction. The board will present a strategy to investors in a similar form as this, in the form of a webinar in the coming months. This will be a combination of organic developments, some of which you've heard, there'll be some more, and inorganic mergers and acquisitions which we'll start sort of showing us talking about and then of course actually acting on them.

33:13 Very good. Thank you. Thank you, Chris. Sorry. We I should have put that slide up while you were talking. So that shows you as the interim chairman. We have a non executive director, Paul Forrest, from Forum. And at the moment, we have two executive directors myself and our finance director Carlos Fernandez and we as Chris mentioned now we'll be looking to strengthen the board in due course. So let's now move to the Q and A section of the presentation. And I'm going to hand back to Mark for the introduction to that, please. Great, Richard. Thank you very much indeed to you all for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. Want to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investment company dashboard.

34:15 Richard, I'll just bring up your camera for the Q and A, if I may. As you can see, you've had a number of questions submitted by investors both ahead of today's event and during the presentation itself. And if I may just hand back to you to read out those questions where appropriate to give response and I'll pick up from you at the end. Very good. Thank you, Mark. Yeah, we welcome any additional questions from on the basis of listening to the presentation. But let's start with some of the questions that were posted ahead of the meeting. We had a question, could you go into more detail around how the derivative loss impacts the day to day running of the business? And does this mean the company has negative cash reserves?

35:01 Chris, you talked a little bit about this with financial results. Would you like to address that one? Yeah. The first thing is that the derivative loss doesn't impact the day to day running of the business in any way. We basically hedge certain volumes. They are at a price, which as Richard mentioned in the past, that was sort of around 45p on average. However, gradually, we're actually decreasing the volumes on those and we are going to come into a much more dynamic sort of hedging mechanism. The hedging is done basically to guarantee a certain amount of income for the company.

35:49 That's all it is. It's just it's just a mechanism for stabilizing some of our income. And we'll we'll be able to do this in a much more dynamic way within about fifteen months as we sort of move out of the first phase into a much better sort of strategy. Does ANGUS make a profit? I've already mentioned, in fact it made a huge profit last year. It does even when you sort of I think the important figure to look at is in fact the EBITDA. The EBITDA is extremely good. It's we mentioned last for the last period it was million pounds and that is a very, very healthy earning for the company.

36:46 Very good Chris, thank you. Let's just add to that point because the question here says once the debt hedge royalties and operational costs are paid each month, does ANGUS make a profit? I mean the other way to think about that is not as a profit but worries our cash position each month. You know it's obvious from what we've said that you know, if I if I if at the moment, we have about 1,500,000 terms a month, which is hedged. And at a price of 45 p, that's about 700,000 of revenue. If we're producing 2,300,000 in a month, there's another 800,000 at the current gas price, which let's say 70 p, that would add about another 600,000. So we're making, say, 1.2, £1,300,000 a month of revenue.

37:36 Know that's easy to calculate from the numbers that we've put out. That revenue is more than sufficient to pay our monthly operating costs, our G and A, we've included the hedges in that obviously and also the royalty and we currently are paying interest on our new facility but we are not paying principal. Even if we were paying principal we've got enough cash generation to be able to cover that. And still have some spare. Yeah. All right. We've got another we've got a question here. Chris was talking about M and A and all the years he spent in it. Have ANGUS got any new acquisition targets in mind at present? I can answer that in a sense yes unfortunately we will not be able to speak about them specifically.

38:34 What we are going to come back to and speak in detail about is the strategy. Each one of these sort of acquisitions will have to fit into a strategy and we're going to communicate that strategy shortly to all our shareholders. Okay. Thank you, Chris. Let's address one of the let's address one of the fresh questions for a minute, which has just come in. Many thanks for the presentation. It was very informative. However, from the perspective of prudence, where is the merit of bringing on additional board members without seeing additional revenue and even the delivery of dividend which long term shareholders have been yearning for?

39:23 Regards. Chris, would you like to I've got maybe I can add something, would you like to take that initially? Yeah, I'm just answering this. There's a number of sort of questions in there. The first thing is that actually at the moment we've actually reduced the number of board members. So we're we're one less. And in actual fact, for the last year, we've reduced them even more. So there are fewer board members. We will look at increasing that, but at the moment we've actually decreased the number of board members. The idea of seeking additional seeking additional revenue. Yes. I mean, at the end of the day, there's only two things we we can we we can do. We can actually increase the value of the company or we can pay a dividend.

40:15 The additional revenue basically does increase the value of the company. Now the truth is we will actually have to sort of pay a dividend at some point, and we intend to do so. The question is, do you want a small dividend in the short run or do you want a big dividend in the future? And that's the balance we have to look at. It's we are here to basically only deliver two things, you know, sort of and we have to be realistic about it. We'd either deliver a big increase in the value of the shares or we actually give out dividend or we do both. So we will be looking at that very, very carefully. We believe there are some fantastic opportunities for assets both in The UK and it's very, very specific when I see fairly low risk sort of regions.

41:11 And those those assets we believe will actually be booked and give a much higher sort of yield to the company. So that's what our aim is and we have to basically now not just talk about it but deliver these. Good. Thank you, Chris. I mean I'd like to just sort of build a little bit on what Chris is because I think this is a fundamental issue for a lot of our shareholders. I mean, the first point is I agree with Chris that we won't we won't be increasing the size of the board until there is a justification to do so. We've now gone quite lean on the board, and we tend to keep it that way until we have made some progress with with with the strategy.

41:57 I mean, I I I think if you look I've had an expense extensive experience in North American oil and gas companies, and and and the model that is attractive, I believe, is a is a company that is generating regular reliable dividends for its shareholders. That is the state that we want to get ANGUS to. The question is as Chris said are we there yet? We have a single asset in Lincolnshire of any size. We also have our own fields but they are you know realistically they're not large, there's not a lot of upside on them. We have a single asset which is a gas asset and therefore we are always at the mercy of gas prices and or obviously operational offsets which could affect us. So we believe that if we're targeting this dividend stream which our shareholders are yearning for, as the question pointed out, we're not in a position yet to think about that. We should be growing the portfolio somewhat to create a set of assets which we can then project forward in time over a number of years and see the cash flow from them and the dividend that could come from that. So that's part of the conversations that we're now going to be having on strategy and we can share more with you on that in the future.

43:26 But thank you very much for that question, think it's a very important one. Moving on, we had a previous question. What are the future prospects for the Lindsay site? I think it was you more or less addressed that in your presentation. Yeah. More or addressed it. You know, it's as I said, it's it's currently suspended because of the cost of water disposal. But as I said, if we can if we can get planning approval to dispose of that water at our own site in Brockham, then we can bring the well back online. It's not it's not gonna be a huge producer. It can be in the kind of ten to 15 barrels a day, but at a very low capital cost, it will still be an economically robust project. Very good. Thank you. We've got a couple of questions on gas storage.

44:12 Maybe ask you first, Ross, to address this and then move to Chris to add any other comments. So how much to shareholders is gas storage worth and how would it generate income for ANGUS? And and a sort of connected question on what's the timescales for this project to come to fruition? So we're we're looking at at gas storage opportunities at Salt Lake and elsewhere because we see kind of strategic position there where The UK becoming more dependent on UK or or on LNG or any kind of gas imports. So we just see we see a future value there.

45:00 On how that value be derived, it really depends on the characteristics of your reservoir and how quickly you can inject and extract gas. And that is part of the the main drivers of the feasibility study that we'll be be engaging with. I would say in the presentation, that is kind of an eighteen to twenty four month timeline before we'll have results from that feasibility study. Anything to add to that, Chris? I think the important thing is that there's a huge opportunity here. UK gas production is dramatically dropping due to sort of new projects not coming on and several very large investors now leaving The UK.

45:46 At the same time, which actually means that The UK is going to be very reliant for the next probably twenty years on LNG imports. The problem with LNG imports is that it requires a buffer. The storage capacity for Germany is around ninety days, storage capacity for Poland is about 100, France is about ninety days. In The UK is with there's a big argument but it's somewhere between thirty six hours and forty eight hours, probably actually about thirty six hours is the total sort of amount of storage available. Even with large storage capacity slightly increased in rough even though it will never return back to its major sort of its good days, there's a huge shortage here.

46:36 So this is going to be a major major issue. We believe that ANGUS is ideally suited now to not just look at so completely but actually look at other possibilities of storage and become a major player in something which is essential and sort of major strategic value to The UK. Chris, thank you. We're actually getting a lot of new questions so we're to and address some of these. Before we get to the new questions, there was one other question that came in earlier today, which I think is it's an important one because it's been on investors' minds and that is the issuance of new shares.

47:22 Obviously as part of the refinancing, we have a new facility which has some liquidity tests on it. Every quarter we have to test for our forward liquidity a cash position and we're doing this with a gas price that has come down significantly since we started the refinancing exercise in the middle of last year. Gas prices roughly halved I think, almost halved in that time period. So that meant that as we looked at the commitments that came with the refinancing, in particular the payment of certain fees, the payment of the royalty that we mentioned, we created flexibility for ourselves by the option at the company's option to pay some of these fees and royalty payments and considerations to forum in shares rather than cash and that was the purpose of the recent general meeting to correct the headroom for allowance to do that.

48:33 So that was relatively contained. I think there's people are still concerned about the need for further dilution. And Chris would you like to just address our thinking on that? I think I mean there's a couple of points here. Firstly, I mean I'd like to point out that the gas prices are at an extremely low number and when you take a look at Henry Hub which has been sort of running at two dollars this is not sustainable in The US which means one of the major producers or the swing sort of producers is actually going to start sort of struggling to produce at those sort of prices. However, I think the major sort of we take a look at sort of our strategy around sort of issuance of shares but really the major driver of those will be new projects both inorganic and organic which will be actually creating value sort of to the shareholders.

49:41 So the major driver for issuing of shares will be for creating value on projects which we believe will actually be well worth investing and we will be sharing that information with the shareholders. Alright. Chris, thank you. Let's move to some of the new questions that have come in. We've been asked what is our target market cap aspiration for the next two to five years given that previous previously we were talking in the hundreds of millions. This was before my time.

50:27 Yeah. Given we are currently a long way from these aspirations regardless of the business success in the last eighteen months. I mean, I don't I think to to address that, I think it's too early to set out what what our aspirations might be. I think this is a journey with a series of steps and milestones on it that will reestablish our market capitalization and our credibility with our shareholders. Clearly over the last twelve months a combination of declining gas prices and a realization that we have spent more than we had originally planned to and had to take on some expensive debt to get to this point has damaged our market cap.

51:20 But as we move forward now with some very carefully thought through growth opportunities, we would like to see a progressive increase in the value of the company. But we haven't set specific targets at this stage. I think it's always dangerous to set sort of targets, but I actually think that aspiration where we are today, really a very, very good place to start. It may have taken us a little bit longer than it should have, but we are. And we will start sort of looking at some major acquisitions, which will pump up our price sort of into the hundreds. So that's what we aim to do. That's what we intend to do.

52:06 And we will be communicating that information to our shareholders. Okay, thank you Chris. A question from Eric on previous management had identified geothermal opportunities, are these still within the current medium term plan? Ross, would you like to address that one, please? Yeah. So the previous management did do a feasibility study of in Southwest England looking at the granite area where we have higher geothermal gradients. That works and has been done and it is technically feasible. We just have to consider if it's in our future strategy. Yeah. I think, I mean, we've put geothermal a little bit on the back burner because we've had so much to do with our current portfolio and our refinancing.

53:00 Think it's fair to say that geothermal energy it has its has it's a lot of enthusiastic support but it also has a lot of challenges particularly commercial challenges. We're essentially talking about sort of oil and gas costs to drill wells and put pipelines and things in with to produce hot water, not not oil and gas. And so there's some significant challenges here, but that's not to say that it's not of interest and it's something that we intend to revisit once we've once we've addressed some of the more immediate options that we've got with with our oil and gas assets.

53:46 And, you know, I've just I've just come from a a a conference which is looking at sort of new opportunities around the world and and the ASTA which is the, as you know, think is the authority that manages oil and gas and other energy in this country. Put up a slide that showed that domestic gas has four times less carbon emissions than the LNG that we are increasingly importers with. So I think some of this is sort of sticking to our knitting and doing what we know how to do well and increase our gas production, maximize the recovery from our oil fields, and look at other opportunities. But we certainly aren't ignoring geothermal, and we will come back and and address it in due course.

54:37 We've got an interesting question on the tax position. Can you talk about your current tax position and what type of UK asset business might create the best fiscal synergies? And then there was another related question about what the Labour Party is threatening to do to production taxes. So let's address those two together. I mean our current position is that we have sufficient tax losses and capital allowances that our current tax position is we're not paying very much in the way of production taxes, corporation tax, supplementary tax and what's called the energy profits levy.

55:23 We're in this position until sometime in 2025 So we are now looking, we're actually doing some tax work to look at how we continue to optimize our tax position into the future because with the current marginal rate of 75% which the Labour Party has threatened to increase to 78% if or when they get elected, you know, obviously need to have some some tax cover on that. And so that's one of the things that we are prioritizing. And I think just just talking about what is being said by the labor party, I mean, they basically said three things. One is they want the the 75% rate to go up even higher.

56:15 They want to extend the energy profit levy for longer. I think they've added two years to it, though they would add two years to it. And they also want to remove the loopholes as they call them, which allow you to not pay the full rate of tax. Now I think that's the last one of those that's the most worrying because if the allowances for capital investment are removed then it's almost certainly going to cause virtually all investment in oil and gas in The UK onshore and more importantly maybe in the North Sea to dry out. And and and and that's gonna affect hundreds of thousands of jobs and and the future of our whole domestic oil and gas business. So I think I I think there's been some shoots, a little bit of shooting from the hip potentially.

57:12 This is something that we will monitor very carefully and it will basically play into two considerations for us. One is how do we optimize our tax position with respect to our current assets in The UK and secondly as we think about the growth of the company how exposed do we want to be to such a high tax environment and this will play into our strategy in terms of going forward as to whether we look to grow our position in The UK or look to acquire assets which are outside the country. I would add a few words. I mean, if you actually look at that scenario, you'll basically destroy the oil and gas business. At the same time, energy prices are going to go sky high, which means you'll destroy any kind of manufacturing in The UK and you'll actually end up in a situation where, you know, sort of there will almost not be any manufacturing.

58:20 And we talk about, you know, wind farms, we talk about steel, there will be no steel production. We've already seen that. So I think at some point, what I think is going to happen is there's going to be a sort of some sense coming in. I think if the gas prices are going to be three times as big as they are today, yes there's a genuine windfall sort of argument. However, if if the gas prices are in a sort of at today's sort of prices, it's actually very difficult to see how that's sustainable and in actual fact I think there will be a little bit of like I say, adjustments. So when there are huge huge profits that's one thing, but if they are the profits are not high and jobs are starting to go, we are basically going to see a slight rethink. I hope that comes soon for the sake of the country let alone sort of the oil and gas industry.

59:23 Thank you Chris. A question from Simon, what will the Board of Directors be doing to inspire and empower new retail investors and protect the current small shareholders who have the fear of a low price takeover by large shareholders? Chris, do you want to address that one in a small perspective? I mean the first thing is we are going to be looking at everything we can do to actually show the true value of our company. And it's, you know, I've I've never seen companies with share in a sort of basically, if you take a look at US companies, you're talking about multiples of EBITDA. You're talking about five times multiples of EBITDA is a norm in The US if you're buying assets.

1:00:15 And that price is extremely I mean, our share price is extremely low. So we're gonna be working very, very hard to make sure the share price does go up, a, with the full knowledge of what we're doing and all the new things, inorganic and organic, which will be coming. Yeah. And I want to stress as well, Chris, that, you know, as an AIM as an AIM company, our retail investors are very important to us. We do have a we have a small number of bigger shareholders, and and obviously, we have to consider them as well. But it's our retail investors that really make up the the lion's share of our investors, and we know what you've been through in the last twelve to eighteen months and now we have to work to turn this around and increase the share price again. We understand that.

1:01:10 And Peter makes a comment that you appreciate a bit of worry about the big future potential. We've been told that for a long time. So again, you know, there is a skepticism out there about about ANGUS, but I I hope that in this presentation you've seen the steps that we've now taken to to establish a very solid operational base with our main asset. We're bringing on oil production at a time of high oil prices with potential to add additional wells into that and we have the skills in the company now I believe especially compared with what we previously had, to be able to make these things happen and we have also been able to put ourselves onto a much more stable financial footing of the refinancing.

1:02:02 So I'm not gonna won't promise big growth today in the short term, but what I will say is we are going on a journey which will see growth and it will be done in a way that creates real returns to shareholders. That's our key measure on this. What are the Board of Directors' views on the willful current share price from Martin? Address to the Board again, Chris, I mean I think we know why the share price is where it is. Yeah, I think I'd actually say I mean again I just want to stress just take a look at the sort of future cash flows, take a look at the EBITDA, take a look at any kind of measure.

1:02:53 I mean in m and a about four or five metrics which actually value a company. If you look at any one of those metrics the value of the share price is extremely low. I mean it really is. I mean it's the share price is you know one year of EBITDA, one year of EBITDA. That's, you know, in the past I would have given of anything for deals like that. So do we think the share price is low? Yes. It is very, very low, and we're going to do everything we can to actually communicate why we think it's low and communicate why we think it's there are more and more opportunities coming in the future.

1:03:42 And then with that a question, when will the board be buying shares? Good question. Some members of the board bought shares last year. Obviously, for a long period, we were sort of locked up because we were involved in the refinancing. But I think it's fair to say we watch this space. We've had members of the management buying shares in recent days, and we will show the commitment to do that. I think probably we need to start putting this bringing this to a conclusion because we've run over the hour that we had scheduled. Just to finish, hello, thank you for this afternoon. Can we please have more of these in the future? Well that's good feedback, thank you.

1:04:29 We you know I have been criticized for being a little bit invisible as the CEO. I think you know I won't make excuses except to say we've been incredibly busy and we've been in the middle of refinancing there was very little we could talk about because there was so much to negotiate and now we're through that it is our intention to communicate on a more regular basis to communicate more openly, more clearly the performance of the company and the direction of the company. So I hope you feel that this event is something of a reset and that we can go forward from here. And just to finish the second part of that question to bring Ross back in finally, with a wider expansion at Salt Flippi, what risk do you foresee in securing planning?

1:05:19 Well, guess to start with it, we're not going be expanding Salt Flippi. There's a footprint of the of the A And B site, which would make up Solflipy, and and we're not gonna be changing that footprint. We'd be working within our current footprint. But we do have to apply for planning permission. There is a certain amount of risk to it, but as long as we're working with the community and working towards minimizing disturbances, we think that we should be able to achieve lung correction. And of course, I talked earlier about the efforts we're making to reduce the noise from our site and of course a key part of that is to make sure that we have the support of the local community when it comes to planning permission for new wells or anything else that we do on-site.

1:06:10 I'm sorry there are lots of other great questions here, but I think we're out of time. What we will do, we'll work out a mechanism to address them and try and post them on our website in some way so that people feel that they haven't been neglected. I'm sorry to those people that we couldn't get to their questions on. I'd like to thank Chris and Ross for joining me for this and particularly thank all of you for taking the time to listen to ANGUS for your interest and commitment to us. Thank you all very much. And with that, I'll say goodbye. That's great. Thank you, Richard and to the rest of the team. Could I please ask investors not to close this session as we'll now automatically redirect you. The opportunity for you to provide your feedback in order management can better understand your views and expectations.

1:06:58 This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of ANGUS ENERGY PLC, we'd like to thank you for attending today's presentation, and good evening to you. PLC would like to thank you for attending today's presentation. Good evening to you. Bye. We're going half.