Angus Energy shares surge as Saltfleetby gas field fires up

The Angus Energy share price has risen significantly since the start of September following news that production had commenced at its Saltfleetby gas field, though it remains to be seen whether these developments will help the UK energy player return to profit.

It’s been a promising fortnight for the share price of UK oil and gas firm Angus Energy [ANGS.L]. Since 24 August, the stock has shot up 117.6% to close at 2.72p on 6 September following two major announcements.

The biggest jump in Angus Energy’s share price occurred after it said that it had made significant headway at its Saltfleetby gas field on 25 August. Angus revealed it had begun processing wellhead gas from the B2 well at its combined extraction and condensate processing facility in Lincolnshire.

The energy player added that the B2 well had exceeded expectations, producing 5 million standard cubic feet of gas per day, although it expects this to normalise over time. In response to the news, the Angus Energy stock closed 28% higher than the previous day at 1.6p.

Saltfleetby unlocks much-needed gas supply

The following week, on 31 August, the company announced its first nomination for gas export and sale to Shell [SHEL.L] via National Grid [NG.L]. Shares in Angus Energy initially climbed as much as 15.8% over the course of the day before closing slightly lower. However, the stock rebounded by 6.1% on 2 September as investors digested the news.

Saltfleetby first produced gas back in 1999 and was the UK’s biggest onshore gas field before it was shut down in 2017. Angus purchased a 51% stake in the field from Wingas Storage UK in 2019 and acquired the remaining 49% for just over £14m in May this year.

As household gas and heating bills spiral, the Saltfleetby news is a positive for the UK as it can access another source of North Sea gas. In August, the country received a shipment of gas from as far afield as Australia amid rising pressure on European energy supplies. Around half of the UK's gas comes from the North Sea, according to offshore energy industry trade body OEUK, with one-third originating in Norway. 

Will Angus move from loss to profit?

In June, Angus released its interim results for the six months to the end of March. The report confirmed the April termination of its formal sale process. The energy player raised £675,000 through placing almost 61.4 million ordinary shares priced at 1.1p each. 

Angus reported total losses of £31.75m, with an adjusted loss of £1.29m — lower than a £1.48m loss for the period in 2021 — and a loss per share of £0.029.

Angus had attracted some criticism from retail shareholders in mid-August for using Twitter to share updates about Saltfleetby, rather than the conventional stock exchange news service. Back then, it said it had a “number of issues with the plant operation”.

Nonetheless, as of 6 September, the Angus share price has rocketed an impressive 318.5% year to date. Shareholders who sold stock earlier in the year may have regretted their decision, with insiders reported to have offloaded 37 million shares in the past 12 months.

Oil project attracts environmental group’s ire

Angus’s other assets include the Brockham onshore oil project in Dorking, Surrey. In April, it was granted planning permission to produce oil at the site’s BRX4 well until 2036.

While the energy player argued the move would help reduce UK dependence on oil imports, it has attracted dissent from environmental groups. Local campaigning group Brockham Oil Watch said the move goes “against the policy direction to reduce climate change impacts”. Other critics claim that the amounts produced will not substantially impact UK oil supplies.

Angus also holds a stake in the Balcombe and Lidsey fields, which are both in more preliminary phases of development. In comparison, the recent Saltfleetby development has been a major catalyst for Angus Energy’s share price.