Angus Energy (LSE:ANGS) — Investor update presentation

0:03 Afternoon, ladies and gentlemen, and welcome to the ANGUS ENERGY PLC Investor Update Presentation. Situated on the right hand corner of your screen. Simply type in your question and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via our investor meet company dashboard, and we'll notify you when they're ready for your review.

0:34 I'd also like to remind you that this presentation is being recorded. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to George Lucan, Managing Director and Andrew Hollis, Technical Director of ANGUS ENERGY PLC. Good afternoon. Thank you, Paul. Good afternoon, ladies and gentlemen. This presentation, this update has been promised for a little while. It's to some extent in direct response to the government's white paper, which is one of the most extensive revisions of our nation's energy policy we've seen in a long while. And we're not the only company, clearly, wrestling with the implications of this white paper. Pretty much every oil company from the largest to the smallest is thinking along the lines we're thinking of how do we fit into the new picture, what's the impact on our legacy assets, what is the best way in which we can continue to make money for our shareholders in a changing energy environment.

1:41 Now, I've laid out there on the front page four areas, but it's essentially three immediate areas. We we have these legacy oil producing assets at Brockman Lizzie. I haven't omitted Balkham deliberately because of the recent council decision, mainly because we don't have what I believe would be a fit for purpose competent person's report for the reservoir as we understand it. Nonetheless, that's one of the producing asset potentially producing assets. Deep thermal in The UK is something we've you've heard a lot about from us. I'd like to elaborate more and I hope to do so almost continuously this year.

2:28 And the third, you're all familiar with, which is our gas interest in Lincolnshire, what was formerly the largest UK onshore gas field. Those are the three key strands. Now, do we stop there? Well, we're a small company with some limited resources but there's obvious other opportunities in storage, energy storage, battery storage, biomass, waste to energy and so forth. Solar and wind are a pretty crowded space. But I mentioned them as ancillary, as points of interest. And actually opportunistically, there may be occasions when we see sites or we have sites where these things are are these particular avenues could be explored further. But it's essentially geothermal where which is a natural running from our drilling experience in oil and gas than the oil assets, legacy oil assets, I'm afraid they are, in a fifteen year view or a ten year view, and clean gas.

3:30 And moving on. I'm going to go off video to conserve bandwidth here. Now, everyone's aware that particularly in electricity, we're rapidly going green. In fact, this graph you see here terminates around two thousand and eighteen, nineteen. Even since then, the last two years, the proportion here that is biofuels, wind and solar in particular have grown very, very markedly. Still, bulk of electric generation is natural gas and nuclear's share is very gently declining.

4:18 I'm not an expert in nuclear, how quickly that decline will continue, but this section here has very rapidly increased. Now there's some very obvious points to rapidly make about wind and solar which is that sometimes the sun doesn't shine and sometimes the wind doesn't blow which means that this capacity here has to suddenly expand to fill the gap. And one of the things that that that not many people seem to have reflected on is the rise in the cost of electricity in the last twenty years. It used to be, I think, about 67% of the CPI, and it's risen to about a 130% of the CPI. It used to be the days you will remember, some of you, when the pence per kilowatt hour on your energy bills wasn't so wildly different on the electric as to the gas, and now it is very wildly different. So I think I'm repaying 3 p a kilowatt hour on my gas at any rate.

5:24 And something like 18 plus p on my electric and three p on gas equates to about 90 p a therm. So you can imagine the therm equivalent for the electric. Now, very frankly, some of that is because of this wind and solar. This wind and solar demands redundant gas capacity be maintained to back it up. So its true cost isn't really disclosed or taken out into a separate part of the equation so that we could all look at the true cost of wind and solar. One of the important points I'm coming to, I hope not too slowly, is that geothermal and to some extent hydropower and nuclear, as options, don't have that problem. They they don't demand huge amounts of redundant capacity.

6:19 And with every bit of redundant capacity, you have to raise the electricity price, basically, to pay some poor, gas power plant operator to stay open for, whatever, a hundred days of the year rather than but maintain the place more or less fully manned and with all the associated regulatory and other costs of maintenance.

6:39 So so that as this lovely wind and solar grows much beyond, I think it hit almost 47% year ago, the problem only gets worse in terms of the cost to the nation of subsidizing it secretly, in effect, providing all this redundant capacity to deal with the outages.

7:05 The second slide here really shows the magnitude of the problem that faces most Western countries in terms of transition. You can see that although we've got some friendly, say 47% of this electric bit here is now nice and green, the rest isn't. We're we're we're an overwhelming carbon economy. This, of course, is is probably feedstock to here, but then a little bit of airline kerosene. But the bulk of it is is you and I driving around in in cars. And, yes, there's these targets for electric by 2030,

7:50 which are ambitious. But even they they don't take into account some of the environmental damage from cobalt and lithium, which I don't think have been fully factored into everybody's equations. The the nicest solution for this would be a clean burning fuel like hydrogen, but as we know, conversion of methane to hydrogen or even generation of so called green methane has not proven yet to be something we can take to commodity scale very easily. Natural gas is a clean, relatively cleaner burning fuel, obviously, than oil, and that is overwhelmingly here, of course, just heat for our houses.

8:37 And that's another aspect in which geothermal is interesting because it's not actually the geothermal that we're looking at, but a number of our compares in the industry here, the industry, oil and gas industry, are also looking at, which is district heating. In our view, we we we've not looked at that avenue, and Andrew Hollis, our technical director, can come to why. But, essentially, with regard to requiring so much support from local and national government as to be not our favoured choice. So what do we say briefly, what's us for ANGUS. And this is very important to us. It may not sound important to you, every time we look for a permit, a permission, an authorisation from any part of society now, we need to be able to say these things, and we want to be able to say these things as well.

9:34 So for us, it's a few points. We we we gotta be realistic about it, which is that just to go back for a second, this lot ain't going away in a hurry, however hard we try. So we're realists. We're we're innovators. We're we're trying to put in hydrogen ready pipe. We're we're actually closely following some of the thermal cracking programs which and developments. We've had already had some some important meetings with with with one of the representatives of the Humber Hydrogen Initiative. We're we're we're on it. We're looking at anything we can provide to that mix.

10:20 Certainly, I would regard methane to hydrogen conversion as as the one solution for clean burning automobiles in the long run. But we're looking also at stewardship, which is regarding our assets and our sites as things we have stewardship over and we have to develop responsibly, always looking at end of life, alternative uses where appropriate, or even simultaneous uses, which is difficult, as you know, in when dealing with flammable or highly pressured materials. We we we'd like to move and in geothermal to be reliable providers, and that's that's the point I've made very strongly earlier, which is that wind and solar aren't that. They're they're relatively high cost and and unreliable.

11:16 And we actually like being small scale. That doesn't mean that we don't achieve large size as a company, but in a crowded country like Britain or most of Western Europe, actually, there isn't a lot of room for big projects. You can park them a long way offshore, but if you want to get good projects done, you have to get very local, keep it small scale, keep it inoffensive, nexus well with the local community. And and that's something which we would aim to do. And and be good neighbors, actually, as as we've said there. Honest. This sounds like a a little bit of a marketing blurb. I would say honest in that we want to make money.

12:01 It would be the simple truth. We wanna make money for our shareholders to keep them engaged and invested in us and supporting us.

12:12 So, to summarize it, we've got a deep geothermal project, which Andrew will talk a little bit about. It's baseload generation. We have looked at heat and and power generation for geothermal assisted agriculture. We've we've we've done extensive work at on repurposing wells for midrange electricity generation, not flash generation, but ESG EGS, sorry. At, we put in hydrogen ready pipe and but I but I'm making a point here now, and I will make it again toward the end of this presentation, the cash flows from existing hydrocarbon streams are a vital source of our finance in in transition.

13:00 We cannot be in a situation where regulators or planners, start saying, well, transition isn't happening fast enough. Stop doing that now and just somehow dig us a GSR well or show us a solar park, whatever. That life doesn't work like that. Transition is a verb movement, and it implies steady movement, not being having one's legs cut off. I mean, that's scrambling on the ground trying to get into, whatever is considered the latest and greatest.

13:35 So, anyway, without further ado, I I I had to set that up because, as I say, we we now face funders and all sorts of plans and regulations, and you you have to be able to look them in the face and say that's the case, and it is. This is this is the new ANGUS. This is where we want to be. So one one component of that is gas and exploiting the gas field. I'm acutely conscious, from the questions that I've received today and the many posts, and questions we've received on our website of how frustrated everybody is with the speed of the gas field development here. I think Andrew will share a little bit later that a a lot of the cause of this has been actually getting the funding in place. Nonetheless, Andrew, actually, will you talk a little bit about this slide since you prepared it?

14:26 Yes. Absolutely. Guess I prepared this actually as an internal view to show what it's costing us in terms of time and delivery of the project while we obtain the funding. And the fact is that financial institutions do not move quickly. And so it's taken us something like six months to move from initial discussions with a with a likely provider through to being close to receiving the money. And I say close, we're still not quite there yet. But as a result, we've effectively lost about six months that we couldn't we couldn't really continue to fund the project. We couldn't continue to to buy kit. We couldn't even continue to do much in the way of of design except what we could achieve ourselves by our own effort efforts, which has been quite considerable,

15:29 really. And so we are looking forward in the next few weeks to getting to a position where we have the funds to move ahead again. And I think we have a a stronger position to move ahead now than we have before. Yep. Thank you, Andrew.

15:48 In terms of the progress update, Andrew, do you want to cover this? I'm very happy to. Well, yes. But this slide was really just to indicate that we are taking advantage of of the latest technologies as well as doing things as cheaply as humanly possible.

16:09 So for example, the national transmission system requires us to put the highest quality gas into the system. It's probably the most difficult quality requirement anywhere in the world for gas to go into the into the grid. And so we have gone to enormous lengths to have a quality monitoring and control system, which is fit for purpose, which is as cheap as possible, but still meets NTS standards. And I think we've achieved something which is frankly

16:46 quite quite a challenge with a system that we have now purchased and which is moving towards being being actually constructed. Yeah. And also, ANGUS ENERGY PLC. Was going to add. How many other gas fields onshore are there in The UK roughly, do you think?

17:08 No. They're very, very few. Probably They will see. Come from one hand, I would think. Definitely on one hand. I would have said one or two. Nearly all the gas infrastructure and equipment is designed for offshore in the in The UK. There there really isn't a lot of precedent for for this kind of a field in in in recent years. This was a 1999 field. I I can't say that that there's been more than five that I know of in recent

17:40 decades onshore, which means there's a very low level of infrastructure support for a small to mid range gas field, which means that you actually equipment procurement is not simple. You're going abroad and all over the place to get the right bits and nor is there rational pricing. Most of the big houses in Aberdeen, particularly the design houses, are purposed toward North Sea and North Sea budget. For them, it's very difficult to contemplate a field of this side size. And I think West Newton, when, as we will have it will, comes on stream, in some years' time, they will face exactly the situation we've had in terms of procurement, in terms of pricing in the market, and in terms of our size, our midrange size makes it really very difficult for us to procure, in addition to protectionist legislation I've already mentioned.

18:38 Yes. I think that is critical. But unlike The U. S. Where there's a huge secondhand market for gas field equipment and you can pick up new, used, reconditioned, whatever equipment very, very quickly and easily. Here, everything has to meet CE standards and the market is minute. So you either build it from scratch at huge expense or you spend a lot of money converting US based equipment to meet European standards. Yep. I suppose the the other things to say here is our EA and HSE permits are all underway. It's a critical part of the whole process.

19:25 And OGA approval, our field of own plan, our final version of it will be with the OGA very shortly. They they're not going to say approve this until the financing is in place. So those things should happen more or less simultaneously.

19:43 Here's where we've ended up with with our key equipment. A caterpillar aerial bundle is one of the most commonly used compression and generation mixes across the world. It's extremely reliable, very good solid engines as of being rebuilt or or and and completely refurbished according to European spec. UniFlare, we've already acquired the flare. It's one of these shrouded flares. Let's say it burns at extreme high heat in order to minimize emissions. Honeywell, a very regular provider of services to all the good and the great in the wholesale industry, in gas in particular. So we're very pleased to have them as a provider of our metering and analysis skids.

20:45 Delta, I have tried wherever possible to be sourcing locally or as local as possible as far out of Sheffield so as to fulfill the promise we made to Lincolnshire, which was that we would we would try and have a manifest benefit on the local economy. Crofty is our our our one new purchase at present from The US. But again, that's being spec to European standards. I just put this in here to say we went with a CPR of a relatively modest gas price, 38 p per therm. As you know, on a ten year average, it's much higher than that. On a five year average, that's probably not far off. But there is in all of this this transition work and the oil price crash of last year a a definitive reduction in CapEx across the industry, and there is the prospect for real spikes in the coming years.

21:50 I'm not gonna make be nostradamus and tell you that, but definitely have a better oil price. We are gonna hedge some of this production. But my my my instinct is is for an an outward trend over the next decade of the life of the field. Geothermal, Cisco straightened this. We've said here a target to deliver 50 megawatts by by 2028. And that may sound ambitious or may not sound at all ambitious. Let's go through some of the economics around geothermal and the reason why we're looking. It's obviously complementary to our business. We've got all the drilling, knowledge of reservoir that's necessary. Andrew will go through some of these the detail of what goes on under the ground here and what needs to go on above ground to get electric production generation.

22:53 Right now, we we put a health warning in there. We progressed planning, conceptual design, and budgeting. We've actually done a huge amount of technical work as well. We've also engaged with a US company with some under an NDA with some highly innovative downhole techniques. We looked at some innovative risk reducing techniques of our own, and we are in discussions with one particular landlord over a site and have identified more sites and we would approach landlords the coming weeks and months. Just briefly geothermal, think of essentially three uses. One, geothermal district heating, don't need an awful lot of temperature, which means you don't need an awful lot of depth.

23:46 But you do need to spend a heck of a lot on on building out pipework. Two is so called EGS or enhanced geothermal systems that basically you've not quite got the extreme heat you need for flash generation, but with a little bit of help of an so called organic Rankin cycle, you can use different working fluids to obtain the necessary pressures to drive a turbine and generate.

24:18 And the third type is flash generation. Now the truth of the matter is the bulk of electricity generation from geothermal around the world that's been successful, And I say the bulk, the overwhelming bulk is flash generation. And the second point to note is that the overwhelming amount of that electricity generation is from relatively shallow reservoirs, in particular, from the Pacific Ring Of Fire, all the volcanic region coming up from New Zealand through Philippines, Indonesia, Japan and then back down through California, Mexico and Central America. That's probably 80% of all geothermal generation.

24:57 There are there is, of course, very good generation in in in Iceland, Italy, in Turkey, and some in Kenya. But other than that, across Europe, there there is a negligible amount

25:13 of even flash generation and certainly a negligible amount of this enhanced geothermal generation. We're looking at flash generation, so we're having to get to hot rocks. Hot rocks are deep. So there there's two one thing in particular that follows from that is the drilling is expensive. And I suppose the focus of of our of our work for the last six months has been about how do you derisk the drilling. And Andrew can can share some of our ideas. I'd rather not share them all, Andrew,

25:52 about this, which which are quite well well considered. But let's let's go through some simple economics really quickly. We We've heard of estimates of geothermal cost per megawatt hour and they're about 5,000,000 sterling per megawatt hour. If you look right across

26:25 it'll be about that. So which will generate five megawatts. George, I do apologize. You just seem to just skip out there. I think you may have just lost connectivity. If you could just step back a couple of seconds for the audience, that'd be great. Yeah. Surely. We were just gonna do some quick economics. There's one paper which I I recently read. It gave £5,000,000 very roughly as the average cost of a megawatt hour of capacity geothermal capacity. And if we're doing five megawatts, you're you're clearly looking at about £25,000,000 there. In The UK, a good tariff such as those that existed for hydro a couple years back might get you 6p a kilowatt hour. That gives you £60 for a a megawatt of of capacity. That roughly works out within 8 thousand hour a year at around about £22,000,000, just a little bit more, and and then you knock off that from OpEx. Now you do that over twenty years, you barely break even.

27:43 So there's something very wrong with the economics there. And and, essentially, apart from some of the risk reducing measures we're talking about, it's cost reduction in the drilling. Most of the drilling done certainly in Europe has not been done by oil oilmen who who have more, I might believe, more innovative techniques. And the second part of it is obviously scale. Your cost per megawatt hour does fall dramatically as you go up toward larger amounts generation. So if we went from five to 25 megawatt on a single site, you know, we we would estimate that the cost there would fall to 3 or even £2,000,000 per megawatt hour. And then, again, and this is what's difficult for shareholders who are used to looking at oil and gas cash flows to get their head around, is you multiply the resultant cash flow stream over twenty years and and the sums become very, very attractive.

28:58 Now, ANGUS clearly doesn't have the budget for that kind of investment. And what I'm talking about from here on in would be more about period of time when ANGUS has gone beyond a pilot project, howsoever funded, into what I would call quasi development phase. Now I do believe there is lots of capital around for that. So I I'm not over overawed by the size of the investment required. It's clearly not one we're going to obtain out of the AIM or or I believe ever anyone else would have been able to obtain out of the AIM. I I don't think that level of risk appetite exists.

29:43 So have been we have been spending some time exploring funding avenues, and I hope to be able to elaborate on them in the coming weeks and months. I I'm gonna I've taken a bit too much time on on that geothermal economics. I'm gonna hand over to you, Andrew, to to whiz through these slides because I'm trying to get through this presentation in the next ten minutes. Okay. Well, we looked at the areas that might lend themselves to geothermal energy in The UK. I'm talking about deep geothermal, not heat pumps and things of that sort.

30:32 The hottest rocks in The UK are clearly in some of the granites in Scotland and in the Southwest in the granites of Dartmoor and Bodmin and Penzance. Now the interesting thing is that those granites in North West are significantly hotter than anywhere else. And they are probably the only granites at this stage that would give us sufficient heat for the current technology to be economically viable. And there are one of two projects which are already in hand in that area, the United Downs in Cornwall and the Eden Project also in Cornwall. But those are relatively small demonstration projects, and we see a need to move gradually beyond that to something which can be scaled up into a full sized power station.

31:27 Let's move on to the next slide. This shows the reason why we like this area in particular. The colors show the heat production from the granite, which is highest in the areas around the edge of each granite and in particular in Northeast Dartmoor. But also, it it compares on the right hand side the heat generated by granites in Scotland, but also the heat flow that comes from them. And it's abundantly clear that the heat flow in the granites in Cornwall is much higher than in Scotland. And therefore, the amount of heat that you can take from an individual well on an individual region of the granite is much greater.

32:17 So we believe that this is an obvious area to to look at. I'm particularly excited about it because I live there. But the the the feeling is that this is the opportunity in The UK. Now granite is pretty hard rock and it is virtually impermeable. So the only way in which you can get large quantities of water to to move around it is if there's a natural fracture system where, as we've said many, many times in the past, ANGUS is not into fracking, and therefore, we look for we will need to look for natural fractures in the rock itself. We looked at the geology of the area and found the largest faults in the area of the Southwest granites, and those are the areas that we're targeting for our development.

33:14 So we're looking at areas with massive deep faults, particularly in the area East of of Dartmoor, where we can reasonably guarantee that there will be high enough flow rates of water that would be that are necessary for power generation. Now, as George touched on the question of how on earth we try and keep the cost down for drilling. Now, if you grind your way slowly through granite, it's going to take a long time and cost a great deal. So we're looking at ways and means of avoiding that by drilling out well through the relatively softer, still quite hard, but relatively softer rocks around the granite and then turning into the granite at a depth that we need to.

34:12 That way we believe we can shave a significant amount of time off drilling time. We also, using the sort of technologies that are common in oil wells, oil and gas wells throughout the world, we don't really see a need for two wells. We can return the cooler water into the granite using the same wellbore just with the technology of multilaterals. So we believe there are ways and means of reducing the costs of drilling. We're also looking at the technology of drilling itself and looking at new methods which are more suited to this sort of rock and conditions. With this, we aim to achieve temperatures around about 200 degrees centigrade at the bottom of the well.

35:06 And it's comforting to know that the United Downs, very slightly shallow well than we had in mind, they are achieving about 190 degrees centigrade at the bottom of the well. So it's certainly achievable. So we are moving towards looking for a precise location for for drilling. We're looking at designs of wells. We're looking at the equipment and starting to look at different types of turbine for generating power. And in short, we are moving through the initial stages of our feasibility study and conceptual design to come up with a with a project which is which is viable. And we are talking to a range of different contractors and consultants to to get this right.

36:02 So you're right. Yeah. I I I think you've covered that quite well there, Andrew. We're we're gonna whistle through the oil assets. There there is we we call this good husbandry in transition because we are we we recognize that these fields are if you like, they have a shelf life, but the shelf life is is, we believe, a good happy seven, eight, nine, ten years away. Lidzi is a is part of a separate presentation which we won't go into now, but we we paused. Basically, there have been, I think, four operators in history on this field over thirty years, and it's somewhat remarkable to me. I don't have that length of time in the industry to discover that it's not uncommon to take seismic without making allowance for different levels of of of different material, so called depth conversion work. It's depth conversion work we've never done on this field, and we have done it.

37:16 And it's shown quite remarkable resulting variation, which which really does fit entirely with the experience we had on x two and the experience one of our previous operators had on x one. So we basically are are going out right now, and we're going to do some straightforward seismic acquisition, a thumper along a road, which we've already budgeted and squirreled away some money. That will be followed by some two two months, Andrew, work on reprocessing at We're not being reprocessing the the existing seismic lines. We are adding one additional line, which will help us tie the old seismic together more effectively.

38:09 And then reinterpreting the revised data, which we've seen some sample lines that have been worked on and the quality is very good. And this should help us to confirm the new structures in enough detail that they could then be drilled. I think I would just add that it was abundantly clear after drilling the X2 well that something was wrong. All of the previous mapping did not map the position of that well correctly. And so we went back to the absolute basics of trying to identify what was wrong. And we found one common factor between all the previous mapping over the last thirty years or so and addressed that particular problem.

38:57 Yeah. So that's it's by I think quite happy coincidence. We now have 80% of that field. Now the the recoverable mentioned in in the common persons report back in two thousand and fifteen, sixteen were very, very low because the only well that he had to go off was the x one. But nonetheless, the the all in place figure is is a good high figure and depending on we will do a small competent person's report at at at the end of this seismic interpretation process this year, partly with a view, dear shareholders, to selling some of this license down to fund the sidetrack so that we're not coming to you. We're hoping this will be self funding.

39:49 And I think what we'd like to do that is close out the seismic, get a planning permission in, and get any EA permitting in, and and have a small common person's report validating our analysis. Now that's that that we get all that together, it's an extremely attractive package because unlike some some sites, it's not particularly contentious from an environmental point point of view. It will be easy to drill. It's got a nice trunk road near it. It's got sewerage, plant next door, landfill site. It's not one which jumps out at you as being highly sensitive. Not to say there's not nice countryside around, but it it doesn't suffer some of the burdens that some other sites do, special scientific interest and and and AONV and so forth.

40:39 So I think it could be a ready to drill opportunity by the end of the year and our task to go and get some some funding to get it drilled. I shall just go back there and it's not fair to talk about value of oil in place. But if you if you talk about fractions of the oil in place, well, clearly, this this oil in place, 9,000,000 barrels, even if a minute fraction were obtainable and no competent person has said that it is, so 10% even, be in itself worth, you know, a 30 pound a barrel, very considerable sum. We have 80% of that.

41:40 So when I say very considerable I think it's worth saying that this field has never been considered for a proper development. It's always there was one appraisal well that was right on the edge and that clearly wasn't the basis for a future development. We went into the x two well with the hope that that would be the start of the development, and clearly, it wasn't. If we now have a reliable structure map, then we are in a position to go back to basics and plan the development of the field. And that should yield a sensible recovery from the available oil in place. Yeah. A very considerable one.

42:30 Brockham, that cement bond log which we promised was completed, and that will shortly be as of early next week, rubber stamped by a third party and submitted to the environment agency who have all of the previous work, the hydrogeological risk assessment. And we have been through an enhanced pre act service there, and I'm hopeful that they will grant permission to reinject and that this will improve recoveries. And I'm not going to go into any further technical detail on that. Lastly, very disappointing this week. We got pushed back by the committee the planning committee at West Sussex County Council.

43:15 We haven't I haven't yet seen, least as of this afternoon, the formal reasons, written response and written reasons for declining the application. We will certainly engage with their planning services department and discuss them and discuss any requirements they put on us. And we will also consult our own legal advisers counsel as to whether or not to challenge this decision. I don't want to prejudice those discussions. My strong inclination at present is to to challenge. I strongly believe as I began this discussion, and it's one one of the reasons I began in in this fashion was to make this plane of transition is not about shutting down every oil field in The UK and saying putting people out of work and saying, well, don't worry. Some, you know, Danes will come in and put another offshore wind farm down. And it's about and the government makes it clear in that white paper.

44:18 It's about helping all companies to repivot toward good things. But it doesn't say you just abandon historical legacy assets where you've sunk millions of pounds of shareholders' money in and just walk away and say, alright, well, bad luck. You know, you're bust. Piss off, ANGUS. So I I don't agree with their interpretation. I don't agree with their interpretation of public interest. Think the government made it very plain energy security, and the benefit to The UK economy from continued oil extraction, to which I might add the benefit of maintaining an engineering and skill space onshore is important and is in the public interest and is a manifest defence for the very modest and sensitively managed works we were proposing there. That's my personal view.

45:07 The board will take a decision when it's had legal advice on this matter and when we've had an opportunity to talk in a less charged environment with the Planning Department of West Sussex. So that's it, gents. I'm going to go straight into my Q and A. Fantastic. George, Andrew, thank you very much for your presentation there. And ladies and gentlemen, do please continue to submit your questions using the Q and A tab situated in the right hand corner of your screen. Just want the company to take a few moments to review those investor questions submitted already. I'd like to remind you that recording this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard on the Investor Meet company platform.

45:55 I'd also like to remind you that your feedback is important to the company, and immediately after the presentation has ended, you'll be redirected for the opportunity to provide feedback in order that the company can better understand your views and expectations. George, Andrew, we have received a number of presubmitted questions from investors, and perhaps I could just start off the q and a session with those, if I may. Please do, Paul. The first question we've had here is, please can you elaborate on the economics around geothermal? And I know you touched on this in the presentation itself. What kind of value could be added to the market capitalization of ANGUS over time? Thanks, Paul. I'll just go back over some of those numbers because I rather garbled. We spoke about £5,000,000 per megawatt to get geothermal running, and we said, well, that's five megawatts, which might be a single closed loop system, you're looking at £25,000,000, and the economics don't really stack up, at least at UK electricity prices.

46:56 They they they they they probably would at German ones and Danish ones, which like ours are inflated to support wind and solar, but more so. However, if you start talking about five of of those systems, so you're up to sort of 25 or even four, go up to and keep the numbers nice and round and you take revenues up to about £10,000,000 a year at a feed in tariff of, say, GBP 60 a megawatt hour. Over twenty years, you'll have some GBP 200,000,000 of revenue and your economies of scale in terms of maintenance operating costs come right down.

47:43 So perhaps even 190,000,000 of net revenue net operating cash flow. So against that, you're not necessarily looking at the same level of five times 25 of cost because we really are going to work down the well cost there. You're still going to have and and we're also working down the chemical cost of the equipment. Basically, on some simple economics, there could be, in a project like that, of 20 to 25 megawatts, about GBP 120,000,000 worth of value. Now ANGUS is not going to get all of that because he's not going to be able to fund all of it. But it only has to take a relatively small fraction to have a very material impact on our share price. And we're talking about one well pad there.

48:38 And we'd hope for a reasonable fraction as operator and we would make some investments ourselves. So I'm trying to give people an idea of the scale of one site and how four or five loop systems on one site could generate over 20 a kind of figures like 200,000,000. And if you work the front end and the cost right, even if you need a little bit of grant money here and there to get risk capital in there, not to justify the economics, but to get the risk capital in there, There's there's a, you know, once once you break over the exploration phase, there's a tremendous value accretion for ANGUS and its shareholders and a long term raison d'etre for the company going well, well beyond oil.

49:27 So yes, I strongly believe that there is good economics in geothermal. Thanks, Paul. Next one. Next one we've got here is what sort of timeline is realistic on these projects, again relating back to geothermal? Yeah. Well, timeline in The UK is a nightmare as in any Western European country. You you you pay for living in a very civilized country with good good protection. Eighteen months is a bare minimum for getting, you know, anything done, frankly, like getting getting a shovel into the ground. In in terms of what we can do in in terms of funding and planning while that process is going on, I I think we can squeeze a heck of a lot into those eighteen months. That means that what follows isn't extensive.

50:21 And I've also like to say this, when I took over with Balkum had just been closed out by accident as a possibility and we were into long term issues with Brokham which went wrong very rapidly and after that, the acquisition of Solvalevy, all of these things you find you've gotten over one regulatory hurdle, takes six months to go straight into another one, it's another six months, into another one, and so on. Is no single system here and very often one regulator would like to see one permission completed. So eighteen months is a bare minimum. What I think you can do in this country is have a lot of these projects.

51:11 We only had two or three. I'd like to see us have eight on the shelf permanently running through the regulatory system and you just take them out when when they're nicely when when they're ready to go. So I already apologize for the past and the tremendous frustration and delays we've had, but it is now a fact of life and it's a fact of life. You can only overcome by having a pipeline. Thanks, Paul. Next question. Thank you. On Salt Fleet B, can you walk us through some of the delays and cost overruns and give us assurances that this is not a black hole? Oh, that that is not a black hole. That this thing can can chuck a heck of a lot of money. I I have absolutely no doubt.

52:00 At moderate, we we've we've taken the CPR numbers for for peak production, plateau production because it runs for a few years. The the the field even at, you know, at the forward curve is chucking out £14,000,000 of gross and the fixed cost there is £2,000,000 So ignoring lending costs and servicing debt, this thing would certainly after the loans repaid, which we hope will be accelerated repayment, this thing could chuck 7 odd million quid at ANGUS at CPR prices every year and that's our market cap every year.

52:48 So it's no black hole. Delays, I won't toss it off and say, oh it's a big project. It is a relatively big project because we don't have a lot of natural comparisons or comparators or fellow people in the industry who are doing a similar thing. So the whole industry is geared towards serving the North Sea, not small gas fields. There are issues with that and it was a surprise. Perhaps it shouldn't have been a surprise. It certainly wasn't something which shareholders raised with us.

53:36 We ourselves were quite surprised by the paucity of other gas fields onshore in The UK. That's a material part of the problems we've had in terms of equipment procurement. But I believe that we're over them. I believe if anything prices have been coming in since the announcement in November and that we will be able to get a better deal for shareholders than than we announced then. Thank you. I I think just touch on this one as well. It was when the debt is out of the way, what kind of cash can this field generate after costs each year? I think you have just touched on it, George. If there's anything else you can add there. No. Except to say, I hope, well, it would be with with with a good with a good following win, we'll we'll get these debt the debt clear clear out of our head within within three or four years. The target is that the facility is there for four years, but it is possible to repay it early and derisk the whole project for everyone.

54:43 Fantastic. Thank you. Let's move on to the next one. How soon will you know if the new seismic line supports the company's view of the reservoir at Lindsay? Well, Andrew, that that that's one for you when when when you put your thumbprint on the ground. We hope to We hope to acquire the new seismic line in about four weeks' time. It'll only take a few days to actually to actually do it. But as most of these things, it takes a lot longer to get approval. So in about four weeks' time, we should be acquiring the seismic line. A few weeks after that, we should have the processing completed. So I'm hoping that in about two three months from now, we should have a reliable new map of the field. We'll perform a competent person's report at around about that time.

55:37 And we I would hope that by the summer, we are ready to try and have a definite farm out of the asset so that we can fund the drilling of a new well. Andrew, by the way, once the seismic line's been acquired and plotted out, does that give you any quick indication? Is there anything you can announce? Not really, Larry. We need to have the new seismic line, which basically just ties together a lot of north south lines that have previously been hard to tie together properly. It enables us to have a much more reliable mapping of the structure. We're pretty convinced that the new mapping now with the proper depth conversion is correct, but we would like to refine it further and have a structural map that we can hang our hat on by the summer.

56:45 Good. Paul, next one. Thank you. What are the intentions of the company with regard to Brockham? It is to obtain this environment agency permit for water injection. That water injection will hopefully support the reservoir and improve recoveries from the existing producer well. We have as well, I think Andrew you could explain this, a possibility not yet permitted to use the BRX4Z well that was addressing the Cambridge a couple of years back in order to improve recoveries further. And Andrew, you might explain where the BRX-4Z Yes. That particular well, which was drilled for the Kimmerich, happens to be very favorably placed for the portland. In fact, it's more or less on the crest of the structure.

57:47 We have the opportunity to abandon the Kimridge section and perforate the Portland in that well at relatively modest cost, meeting some of the requirements of the OGA to ensure that we keep on top of well abandonment and at the same time give us another producer. So I'm quite excited about the possibility of adding another well in right on the top of the structure where it's needed. Thanks. Paul, thank you. I'm just conscious of time as we're coming up to the hour. I think we've got a couple of questions further that we can go through. If that's okay, just let's start with the next one we've got here. If the if the company's view is correct, how soon could the reservoir be drilled?

58:37 Lizzie. That I I I I would like to think that we have we have an opportunity to get straight in. Well, what we would do as I said earlier is we would submit planning regardless. And again, this comes down to our our chastened knowledge that you just press ahead into the system. So you you don't try and run anything concurrently, but you've gotta you've just gotta fire all guns because the the the wait time otherwise is crucifying for any business in The UK if they're not in oil and gas. So so we would submit planning now. I mean, it's conceivable we could get planning this year. As I say, it's non con it's we don't believe it's a contentious site.

59:27 I can't speak for how council will come to treat it but we don't believe so. So our view might be it could be shovel ready by the end of the year. The key would be funding. Andrew, you you we we have no firm well cost, but for this sort of well, what would you you say? This length of side track? Think it's probably dangerous because I'd only have to release an hour or something. Yes. Absolutely. But what I would say is that our intention is to do all of the relatively low cost work, which is required to prepare to drill.

1:00:18 So this is the mapping, the reserve determination, the well design, the planning and applications and approvals. And then with a farm in need say, there you go, this is ready to drill. You pay for the well and you get a percentage of the license. Yeah. Exactly. If a small although, again, we reiterate, it's not this is not a a common person's report, but clearly, we get if we were lucky enough to get 20% recoveries, say, then then these these figures really do dwarf the the relatively simple task to hand. So in in terms of risk to reward is bloody good. It is good.

1:01:05 If if Andrew and his team's seismic is correct which which I believe it is and our partners in that field believe it is, their experts believe it is and our own third party people believe it is. So and you yourself can judge from that detailed presentation whether or not it's worth the candle But I think the risk reward here is really very good for shareholders, particularly if we're able to fund this by shutting down some of our very large interest in the field. So, yeah, soon and good risk reward. Thank you, George. Thank you, Andrew. As I said, I've just gone through the hour. George, I don't know if there are any other questions you can see that you could just perhaps pick off at the end or I think I've got one more here just unless you can hear. I've got one here which is from Simon C. What are the near term catalysts for the business in creating value?

1:01:59 Clearly everyone is waiting for a decision on Solvigli, not a decision, but hearing an announcement of funding. We're very confident about it. That's going to be a not so much a catalyst for the business, but it's certainly a catalyst for the share price. But for us, beyond that, I believe actually, Lindsay is also a great accretion to the real value in the business. I'm very so the And thing I've been most excited about since I joined. So I'd love to see that firmed up and funded and permitted. Thanks.

1:02:45 Thank you and thank you both to George and Andrew. Think you've addressed a number of those questions and of course you will review all questions submitted today and we'll publish those answers back on the Investor Me company platform. George, perhaps I could just ask you just for a few final words to wrap up please if possible. Yes, I'd just like to say we hear frustration and anger at cost overruns and time overruns. I won't say these aren't our fault. There's some things you can anticipate. There's some things you can't. But I don't see this as a pattern. I see it as a peculiarity. We are, as I say, relatively unique in being a mid sized onshore UK gas field and even being able to wrangle our way through all the regulation and the irrationality of the supply market around us and the legislation around us. It is not a it's not been a dull, we haven't got everything perfect but it's not a function of absolute incompetence or stupidity.

1:03:52 I can guarantee you that it is quite a task. People work bloody hard here for shareholders and and I think we've got some great prospects for you. So hang hang on in there. It it will be good. Thank you very much indeed. George and Andrew, thank you for updating investors today. Can I please ask investors not to close the session? You'll be automatically redirected for the opportunity to provide your feedback. If you've accessed the meeting from the website, the feedback page will appear in front of you. Access the meeting via the link sent to in the email. You'll simply be asked to log back in and submit your feedback, which takes just a few seconds and is greatly appreciated by the company. On behalf of ANGUS ENERGY PLC, we'd like to thank you for attending today's session. That now concludes today's event. Thank you again, and good evening.