Angus Energy has reported increased estimates of cash flow from its Saltfleetby site in Lincolnshire. But the company is likely to have to wait longer to see them with another delay in the date when gas is expected to flow.
In mid 2020, Angus predicted it would see the first Saltfleetby gas within six months. But since then, the date has slipped to early 2021, then December 2021, February 2022 and now a month later.
In a statement to investors today, Angus said a new report on the site estimated first gas by 15 March 2022. This was a conservative assumption, the company said, and it continued to “pursue its schedule” for commissioning and first gas in February 2022.
Angus has also said there was “uncertainty about the precise start date” for the planned side-track well at Saltfleetby. This was because a major piece of rig equipment was waiting to be shipped from abroad, it said. This was not expected to cause any overrun, the company added.
The report also predicted a 16% overrun in the cost of the side-track. This was caused by rising material and logistics costs, as well as the appointment of new contractors and the reprocessing and reinterpretation of a section of 3D seismic survey around the well path.
A more detailed timetable for the side-track and commissioning is expected next month.
Cash flow estimates up 50%
The Saltfleetby report also estimated a 50% increase in cash flow from Saltfleetby reflecting rising global gas prices.
The figures rose from a conservative prediction of £16.7m in February 2020 to £25.4m this month. The mid case cash flow increased from £25.2m in February 2020 to £38.5m this month.
Based on the report, Angus Energy could see revenue of £119.6m from its 51% stake in Saltfleetby (mid-case estimate).
Angus Energy’s chief executive, George Lucan, said:
“Obviously this Report is a solid validation of our efforts to restore this great onshore gas field to production with the help of our many UK based suppliers, advisors and contractors.
“Regardless of near-term fluctuations in the gas price, the higher forward gas price curve from mid-2022 onwards, which is reflected in this CPR [competent person’s report] valuation, is the result of structural gas supply-demand imbalances which, whilst only brought to light recently, are likely to favour producers for many years to come and highlight the national importance of this domestic gas supply.”