Angus Lines up Funding for UK Saltfleetby Field

Angus Energy has signed a memorandum of understanding (MoU) with Aleph Energy and Aleph Commodities setting out terms to secure a £12mn ($16mn) loan to develop the UK's onshore Saltfleetby gas field, the London-listed company said on November 30.

Saltfleetby was formerly the UK's largest onshore gas field but was closed in 2017 after the bulk of its resources had been extracted. Angus bought a 51% share in the field in Lincolnshire last year, while Saltfleetby Energy holds the remaining 49%.

The four-year loan facility has a 12% margin over Libor and includes a 3% commitment fee payable out of the facility, a grant of 30mn shares in Angus, issued over the facility's life, and an override of 8% on gross revenue following its repayment.

Angus said these terms gave both the project partners and Aleph an incentive to expand revenues at Saltfleetby. Aleph will also serve as a commercial and technical advisor for the project, leveraging its experience in marketing energy products, managing price and logistics risks and general upstream activities.

Under the MoU, Aleph Energy and Aleph Commodities will also provide £8mn in funding for a geothermal programme at Saltfleetby, after it is presented by the end of January 2021. Aleph will also assist in funding and developing hydrogen and carbon capture solutions at the field.

"We believe that these terms potentially represent a great result for shareholders in a difficult time for fundraising for any hydrocarbon project," Angus CEO George Lucan said in a statement. "Saltfleetby is a considerable opportunity," he said, noting that a competent person's report in March estimated that the field could yield between £75mn and £250mn in gross revenues over its remaining life.

The MoU gives Aleph and the project partners a 90-day exclusivity period to finalise the financing terms.