Further to the announcement of 15 May 2023, Angus Energy (AIM: ANGS) is pleased to announce that production at the Saltfleetby Field has reached a steady operating state from the 3 producing wells in the field, B2, A4 and the new B7T.
After a short duration plant outage, we are now exporting gas to the National Grid at a combined average daily rate of 9.5 mmscfd, reaching peak flows of over 10 mmscf. The new B7T well continues to clean-up and the Company anticipates exceeding a combined average daily rate of 10 mmscfd, on a sustainable basis.
We have seen gas prices falling back to lower summer levels over recent weeks, but winter 2023-2024 pricing is strong, with forecasted prices at £1.24 per therm on Heren NBP pubished trading data. On the basis of continued production at this level, known hedge prices and published market forward prices we should be generating approximately £2.5 million of revenues on average each month for winter 2023 from Saltfleetby.
Potential Future Drilling and Gas Storage
Angus continues to evaluate storage opportunities at Saltfleetby variously for natural gas, hydrogen and CO2. To advance this, the Company has also engaged planning consultants to submit a further planning permission for an expanded site at Saltfleetby to encompass a number of new wells and process plant.
The drilling will initially address the Namurian reservoir, below the presently exploited Westphalian, as a commercial source of natural gas but wells will also be designed to be repurposed as potential injection wells for gas storage, whether in the Namurian or Westphalian, and for which further planning permissions at national level would be sought if deemed appropriate.
Furthermore, following on from the pioneering use of hydrogen tight Soluforce pipe in the first commercial transmission grid connection at Theddlethorpe Entry Point, Angus will be exploring the design parameters around the management of hydrogen or CO2 at high pressures, alongside traditional storage of natural gas.
The Namurian reservoir, which sits below the Westphalian from which the Company currently extracts natural gas, has produced 1.5 bcf to date but a very wide variation of gas in place exists between our own recent CPRs and internal estimates by previous Operators, Gazprom-Wintershall and Roc Oil. To date no detailed interpretation of the Namurian, independent from the Westphalian, has been undertaken and accordingly a full third party re-interpretation of both reservoirs is presently underway, expected to complete in October.
In 2006 Gazprom-Wintershall estimated the storage capacity of the overall field to be between 700 and 800 million cubic metres, making it easily the largest onshore storage facility in the UK. Estimates by Angus of storage capacity are somewhat higher and do not include the Namurian.
Richard Herbert, CEO, writes: “The Company is pleased to have reached this production milestone and to be able to turn attention to both organic and inorganic growth opportunities. Gas storage is an obvious and topical one. Properly engineered to manage H2 or CO2 as well as natural gas, storage at Saltfleetby has the potential to meet the twin demands of present and future administrations for clean energy and energy security and we are pleased to be able to align shareholder interests with those longer term goals whilst offering the possibility of enhanced gas recoveries in the medium term.”
