The Angus Energy PLC (LON: ANGS) share price spiked 20.7% higher after issuing an update on the installation process at its 51% owned Saltfleetby Gas Field, which is set to unlock significant gas resources for the UK.
The onshore oil and gas company said that it had secured the heat exchangers, which were expected to have an extended delivery time, and they were now being fitted to the skids. The firm said that no other long-lead items remained.
The firm noted that engineering works on the facility were progressing according to schedule and that it had completed piling operations on the site.
Angus Energy had almost completed the foundations and plinths on the pipe rack. The pipes are currently being fitted to the shoes with the ongoing fabrication of the ancillary frames.
The oil and gas firm has ordered the cables and trays for electrical installation and will start pulling the cables and installing them in late March and April.
Investors cheered that Angus Energy had settled the litigation with a financial services provider, which it had been in dispute with regarding the Saltfleetby Loan Facility. The company agreed to issue 32.9 million new shares to settle the dispute.
The new shares will be admitted to trading on the London Stock Exchange’s AIM on 16 March 2022, ending the legal dispute and freeing the management to focus on bringing the Saltfleetby facility online in the coming months.
The oil and gas company is likely to benefit from higher energy prices in the coming months if its starts production activities from the side-track by its June 2022 deadline.
George Lucan, Angus Energy’s CEO, commented: “The focus is now away from skid delivery to installation with the aim of having the site ready for commissioning during April and producing during May. The present gas price forward curve shows very high average prices of over 400 pence per therm for 2022. In fact, gross production, of which we have a 51% share, solely from the existing wells and which is wholly unhedged for the month of June, is expected to yield 1.5 million therms or gross revenue of £7.2 million at today’s forward price for that month alone.”
“Gross production solely from the side-track, should it be successful, is again wholly unhedged for the remainder of the year and is expected to yield a further 1.5 million therms each month of which Angus share is 51%.”
Angus Energy is still focused on a formal sale process and said it was in discussions with several parties about a potential takeover of the business. However, the company is yet to reach a firm agreement with either of the parties.
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Angus Energy share price.
Angus Energy shares spiked 20.7% higher to trade at 1.0260p, rising from Wednesday’s closing price of 0.8500p.
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