TIDMANGS
RNS Number : 8556G
Angus Energy PLC
21 July 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 6/2014 AS IT FORMS
PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018 ("MAR"), AND IS DISCLOSED IN ACCORDANCE WITH
THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF MAR.
21 July 2023
Angus Energy Plc
("Angus Energy", "Angus" or the "Company")
Financing & Corporate Update
Issue of Equity and TVR
-- Average Production of 80,000 therms per day in June and
92,000 therms per day in July to date.
-- Gas revenue of GBP1.735 million in June 2023.
-- Hedged volumes now 50,000 therms per day to July 2024.
-- Future Hedges partially unwound to allow exposure to gas price increases
-- GBP6m Bridge Facility signed and being drawn
-- Existing GBP3m Bridge facility rolled
Production & Revenue Update
The Company averaged production of 80,000 therms per day in June
and has averaged 92,000 therms per day in the first 18 days of
July. As of 1(st) July, the daily hedged volume has reduced to
50,000 therms per day until July 2024 when it reduces further to
21,666 therms per day. As a result, Angus is now producing
significantly above the hedged volumes and is benefiting from
strong gas prices. It is anticipated that production will be
maintained at 90-95,000 therms per day over the next quarter. With
current prices and after hedges, the Company generated gas revenue
of GBP1.735 million in June.
Partial Hedge Unwind
The Company believes that the winters 23/24 and 24/25 will
present the possibility of price spikes as geopolitical tensions
and the potential for cold snaps remain. As a consequence, the
Company has reduced its future hedge exposure, taking advantage of
the recent sell off in gas prices. As announced, the Company has
unwound 50% of its hedge position in the second half of 2024 and
the first half of 2025. Angus has agreed to settle the following
volumes at the following fixed prices: in 3Q24, 1,840,000 therms at
GBP1.226/therm; in 4Q24/1Q25, 3,640,000 therms at GBP1.37/therm; in
2Q25, 1,820,000 therms at GBP1.07/therm. This action will provide
the Company with exposure to price upside during this period, while
keeping 50% of current hedges in place. Settlement of these
transactions will take place in the future in the normal way.
Signature of New Bridge
Angus is pleased to announce that, in line with the announcement
of 14 July 2023, it has now closed the GBP 6 million junior debt
facility (the "Bridge Facility") with Aleph Finance Limited
("AFL"), an associate of the Company's Substantial Shareholder
Aleph Commodities Limited ("ACL"). The Bridge Facility has an
initial term of three months, extendable, at the option of the
Company, for a further 3-month period. Thereafter any roll is with
mutual agreement. A roll fee of 3% applies. Interest on the Bridge
Facility, which is payable quarterly, is capitalized on each
3-month period and added to loan balance. There is no exit fee. A
3% penalty fee applies should the Bridge Facility be repaid earlier
than its stated maturity.
The Bridge Facility is priced at SONIA (Sterling Overnight Index
Average) + 15% . The Company will also issue 300 million 3 year
warrants to ACL (or associates or parties nominated by ACL) at a
strike of 1.5p per share, for which authority will be sought at the
next general meeting of the Company. The warrant strike price will
adjust to the price of any equity issued during the term of the
Bridge Facility if such equity issuance is at a price which is
lower than the Warrant strike price. The Company is not planning
any issuance ahead of a refinancing.
The proceeds of a proposed Global Refinancing, as referenced in
the RNS of 14 July 2023, are expected to repay both the current
outstanding of GBP7.3 million under the senior facility and the
combined GBP9 million bridge facilities. Alternatively, the Company
and the Lenders, by mutual consent, may either agree to extend the
bridge facilities until the Saltfleetby Field cashflows can be
utilized for debt service or, convert part or whole of the Bridge
Facility into shares at a 25% discount to the 30 day VWAP, subject
to a floor of 0.4p/share, including in an event of default, in
which case it will be at the Lender's option, if neither cure nor
other remedy can be agreed between the parties.
As identified in the Company's Interim Results announced on 30
June 2023, the Company is required to make a payment due under the
derivative instrument of approximately GBP3.5 million by 20 July
2023 for financial hedges not settled in July and August 2022 due
to late start-up of gas production at the Saltfleetby Gas Field.
This Bridge Facility will meet this obligation as well as providing
funds for existing and proposed capital, general working capital
and operating expenditures around the temporary and permanent
flowlines at Saltfleetby Gas Field.
Related Party Matters
ACL and its associates are Substantial Shareholders in the
Company and accordingly ACL and its associates, which includes
Aleph Finance Limited, are related parties under the AIM Rules.
Therefore, both the Bridge Facility and associated warrants and
fees (together the "Transaction") are related party transactions
under the AIM Rules.
ACL are entitled to an upfront 5% introducer fee (being
GBP300,000). The fee will be settled in shares at the 30 calendar
day VWAP of 0.9534 pence per share prior to the date of issue of
the Bridge Facility; accordingly Angus will issue and allot
31,466,331 shares in respect of the fee (the "New Shares").
Noting that ACL and its associates are Substantial Shareholders
in the Company, the Transaction taken as a whole, being the issue
of the GBP6 million Bridge Facility together with warrants and
associated fee arrangements with ACL, is a Related Party
Transaction under AIM Rule 13. Accordingly, the Board, none of
whose members are involved in the Transaction, having consulted
with the Company's nominated adviser, Beaumont Cornish Limited,
consider the terms of the Transaction to be fair and reasonable
insofar as shareholders are concerned. In taking this view, the
Board has carefully considered the near-term liabilities of the
Company, alternative sourcing of funding to meet these liabilities
and the terms agreed with ACL and AFL and considers them to be fair
and reasonable and comparable with other offers of funding and past
offerings by other service providers. The Board has calculated, in
accordance with the Company's usual Black Scholes model used for
the purposes of its financial reporting, the value of the Warrants
at approximately GBP260,000.
Admission to trading on AIM
Application will be made to the London Stock Exchange for
Admission of the New Shares. It is expected that admission will
become effective and dealings in the New Shares will commence at
8.00 a.m. on or around 27 July 2023.
Following the issue of the New Shares, the Company will have
3,621,860,032 Ordinary Shares in issue, each share carrying the
right to one vote (the "Enlarged Issued Share Capital). The Company
does not hold any Ordinary Shares in treasury.
Following Admission of the New Shares, the above figure of
3,621,860,032 Ordinary Shares may be used by shareholders in the
Company as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a
change to their interest in, the share capital of the Company under
the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
.
Enquiries:
Angus Energy Plc www.angusenergy.co.uk
George Lucan Tel: +44 (0) 208 899
6380
Beaumont Cornish (Nomad) www.beaumontcornish.com
James Biddle/ Roland Tel: +44 (0) 207 628
Cornish 3396
WH Ireland Limited
(Broker)
Katy Mitchell/ Harry Tel: +44 (0) 113 394
Ansell 6600
Flagstaff PR/IR angus@flagstaffcomms.com
Tim Thompson Tel: +44 (0) 207 129
1474
Fergus Mellon
Aleph Commodities info@alephcommodities.com
Qualified Person's Statement: Andrew Hollis, the Technical
Director of the Company, who has over 40 years of relevant
experience in the oil and gas industry, has approved the
information contained in this announcement. Mr Hollis is a Fellow
of the Geological Society and member of the Society of Petroleum
Engineers.
Notes
About Angus Energy plc
Angus Energy plc is a UK AIM quoted independent onshore Energy
Transition company with a complementary portfolio of clean gas
development assets, onshore geothermal projects, and legacy oil
producing fields. Angus is focused on becoming a leading onshore UK
diversified clean energy and energy infrastructure company. Angus
Energy has a 100% interest in the Saltfleetby Gas Field (PEDL005),
majority owns and operates conventional oil production fields at
Brockham (PL 235) and Lidsey (PL 241) and has a 25% interest in the
Balcombe Licence (PEDL244). Angus Energy operates all fields in
which it has an interest.
Important Notices
This announcement contains 'forward-looking statements'
concerning the Company that are subject to risks and uncertainties.
Generally, the words 'will', 'may', 'should', 'continue',
'believes', 'targets', 'plans', 'expects', 'aims', 'intends',
'anticipates' or similar expressions or negatives thereof identify
forward-looking statements. These forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from those expressed in the forward-looking
statements. Many of these risks and uncertainties relate to factors
that are beyond the Company's ability to control or estimate
precisely. The Company cannot give any assurance that such
forward-looking statements will prove to have been correct. The
reader is cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
announcement. The Company does not undertake any obligation to
update or revise publicly any of the forward-looking statements set
out herein, whether as a result of new information, future events
or otherwise, except to the extent legally required.
Nothing contained herein shall be deemed to be a forecast,
projection or estimate of the future financial performance of the
Company.
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END
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