6th Jan 2022 11:48
(Alliance News) - Shares in Angus Energy PLC on Thursday jumped as it unveiled a strategic review and formal sales process and said it has been approached with an offer for its stake in the Saltfleetby gas field and for the company as a whole.
Shares London-based company were up 32% at 1.02 pence each on Thursday morning in London.
The oil & gas development company said it is committed to achieving first gas at Saltfleetby in Lincolnshire as soon as possible but also has been addressing the "urgent need" for transition energy projects in the geothermal sector in the south west of England.
Angus explained that its market capitalisation does not reflect the short-term value of hydrocarbon assets and their immediate cashflow potential, nor any long-term value in the company's scaleable geothermal project.
It is a "valuation mismatch" that other smaller energy companies have also experienced, it added.
Furthermore, the oil and gas development firm said it has received an indicative non-binding offer for some or all of its 51% stake in the Saltfleetby gas field in East Lincolnshire, England.
"Additionally, the board has received indications that certain parties may be interested in making an offer for the company," Angus added.
The oil and gas company is now undertaking a review of its strategic options, which include a sale of the company under the framework of a "formal sale process."
Angus is confident in achieving first gas at Saltfleetby in a timeframe not much different than originally advised.
Nonetheless, a further increase in the project's contingency of up to 10% of the budget is anticipated.
"The speed of transition has surprised the energy market in general and the resulting shortage of new gas supply, and deficit of renewable sources, is likely to lead to periodic crises such as we saw recently in the UK and a very high forward gas price in years to come," Chief Executive George Lucan commented.
"Presently, the market is attributing little value to hydrocarbon reserves in general, or in our instance, the immediate cash flow prospects of the Saltfleetby gas field. Accordingly, in the light of this and the interest expressed by other energy market participants, we think it in the best interests of shareholders to conduct this strategic review and formal sale process."
By Abby Amoakuh; [email protected]
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