Gas production at Saltfleetby in Lincolnshire helped to generate revenue of nearly £16.5m for Angus Energy in the six months to March 2023. This compared to £27,000 for the same period in 2022.

In interim accounts published today, Angus said the three producing wells at Saltfleetby sent gas to the national grid at the target rate of 9.5 million standard cubic feet per day (mmscfd).

The company said it made an operating profit of £6.486m (up from a loss of £1.238m in the first half of 2022).

Profit on ordinary activities before tax was boosted to more than £115m by reduced future liability on the company’s gas derivative instrument following gas price movements. This compares with a loss of more than £31m for the same period in 2022.

Angus said it was negotiating for a £6m bridging loan, which, combined with an extended existing £3m bridge, would allow the company to close out the final rolled hedges arising from late production in the autumn of 2022. The loans would also fund evaluation of acquisitions and development of storage at Saltfleetby, Angus said.

Operations

Saltfleetby, Lincolnshire

Angus said further planning permission would be sought for an expanded site with new wells and processing plant.

Angus currently extracts gas from the Westphalian reservoir. The new wells would be planned to extract gas from the deeper Namurian reservoir but also could be repurposed as potential injection wells for gas storage. Reinterpretation of both reservoirs is underway and expected in October 2023, Angus said.

Estimates by a former operator indicated that storage capacity at Saltfleetby was 700-800 million cubic meter. This would make it the largest onshore storage facility in the UK. Angus Energy said its estimates of storage capacity in the Westphalian were even higher.

Balcombe, West Sussex

A legal challenge will be heard in July 2023 against the decision by the planning inspectorate to grant permission for a one year well test. Angus said a decision by the Environment Agency on a variation to the Balcombe permit was imminent.

Brockham, Surrey

The field has been shut during the accounting period for maintenance and equipment overhaul. Plans are being made to restart production in the second half of 2023.

Lidsey, West Sussex

The field has been shut-in waiting for the resumption of Brockham production to evaluation options for combined operations.

Geothermal

Angus said it had compiled a detailed geothermal development plan, focused on two unnamed areas. The work programme for each area would begin with gravity and heat flow modelling, seismic surveys, shallow drilling and a third party feasibility study.

Key figures

For the six months to 31 March 2023

Revenue: £16.466m (six months to 31 March 2022: £27,000)

Gross profit or loss: £8.948m (six months to 31 March 2022: loss of £10,000)

Admin expenses: £1.499m (six months to 31 March 2022: £1.228m)

Operating profit: £6.486m (six months to 31 March 2022: loss of £1.238m)

Derivative financial instrument: gain of £121.222m (six months to 31 March 2022: loss of £30.459m)

Profit on ordinary activities before taxation: £115.298m – included gain from derivative instrument (six months to 31 March 2022: loss of £31.750m)

Net cash inflow from operating activities: £6.290m (six months to 31 March 2022: cash outflow of £3.614m)

Total assets: £97.809m (six months to 31 March 2022: £73.050m)

Total liabilities: £66.485m (six months to 31 March 2022: £104.491m)

Sale of oil: £735,000 (six months to 31 March 2022: £27,000)

Sale of gas: £51.731m (six months to 31 March 2022: zero)

Cash: £3.17m (six months to 31 March 2022: £1.441m)