Down the Rabbit Hole with NPL

At Easter time we are down the rabbit hole with NPL/ Halite ..........

At the recent community liaison panel meeting members were told that NPL was funding activities to get the underground gas storage project started in the hope that an investor will sign on the dotted line once the Development Consent Order (DCO) requirements are fully met.

This should mean amongst other things: building a short section of access road from the A588 to Back Lane in Preesall to make sure the planning permission stays live, submitting the final documents on noise, dust, drainage to Wyre Council and getting those boxes ticked before the end of July, then doing the missing monitoring and tests on the marine environment, finalising the marine monitoring requirements, and getting the cavern designs passed. If all goes to plan then NPL anticipate gas in the caverns in 6 years. 

Road to nowhere?

Although there should presumably be no problem to build a short piece of single lane track through a field after 18 years of preparation (to be fair mostly not done by NPL), this action should keep the permission live. It does little to solve the problems down the line with tunneling under the hard marl surface of the sea bed to lay pipework for brine discharge, keeping to agreed salinity levels which all the local experts say will be nigh on impossible (risking the Environment Agency pulling the plug to investigate), or indeed solving problems that were brought up by the previous MD of Halite, Keith Budinger, in keeping to the noise restrictions in the DCO. Mr Budinger had hoped to solve those issues by sending those residents affected on a cruise. That may not be such an attractive offer now....

It also does not address the fact that investors should surely see a time-limit on gas storage in the current environment. Surely? It will take 6 years to build. Come on guys!

Money Money Money 

It may be a coincidence but as NPL was saying it aims to finance the start of the gas storage project, in March 2020 NPL Group (UK) Ltd allotted shares in its company to a value of £25,000,100 ( yes, that is £25 million folks and includes the £100 assets it had in its 2019 accounts submitted to Companies House). 

As of 5 April 2020 the three major shareholders were Mr McFarlane, Executive Chairman of the NPL Group, and Landco Three Limited and Landco Four Limited (two companies that Mr McFarlane is a Director of. They had £1,002 and £1,000 assets in their 2019 accounts submitted to Companies House). 

Shares can be allotted amongst other things to finance projects or raise capital. 

Around the same time NPL Developments Ltd was authorised to allot shares up to the value of £15,878,378 (again that is over £15 million plus the £100 assets on its accounts from 2019).

NPL Energy Holdings Ltd was authorised to allot shares up to the value of £1,689,189 (plus the £100 in assets recorded in its 2019 accounts to Companies House). 

Then in April 2020 NPL Group UK Ltd became the major shareholder of both NPL Developments Ltd and NPL Energy Holdings Ltd. 

Confused yet? 

We are and we are definitely not financial experts at all but it looks like NPL Group UK Ltd issued shares and raised funds which it partially used to buy shares in NPL Developments Ltd and NPL Energy Holdings Ltd. All of which are part of the same group of companies and none of which really had any assets on their books last year?

NB: We are not saying there is anything wrong with doing this, just that it is surprising to us mere mortals that this is possible and they obviously have a better credit rating than us:-)

At any rate there was over £25,000,000 in shares recently allotted for this group of companies of which £1,689,189 went to NPL Energy Holdings Ltd. This seems to be the department of the NPL Group that Halite Energy/ Cheshire Energy fits into. (memory jog - Halite Energy was bought out by Cheshire Energy which is a part of the NPL group). 

In short, they can afford to build a short stretch of road between the A588 and Back Lane (!) but after that? NPL don't seem to want to take on the whole project, which was estimated to cost £660 million. The question is, will other investors?

We wouldn't bet our pocket money on it. 

PS: Apologies in advance

Just to restate that we are local people and not financial experts and the world of £20 million pounds is completely foreign to us. We have tried to keep this post accurate, but there could be some information we have missed or misunderstood, particularly as the company group involved is made up of a lot of smaller companies. This article is our attempt to understand what is happening in our local villages with a project that nobody has wanted for 18 years and that just won't go away.....

PPS: Keeping everything crossed that other investors have more sense than money.

PPPS: We don't keep up with our blogs very often, but in the extremely unlikely event we have any comments and those comments are rude or offensive, they will be deleted. 

Claire 
#NoGasStorage