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Mirasol
Look at the HHDL accounts note 7 showing that the oil sales from the EWT as negative costs.
Seadoc
I do see the irony of me asking someone to look at a document I give no worth to.
"Mirasol posted a fair bit of the rules and it isn't in therr"
It is well known that OGA won 't allow you to state "we're running this EWT at rate X to make money" - if , on the other hand, you can make a good technical case for the information you will glean at production rate X then hey may allow it. This applies just as much to HUR as HHDL. If they think you are taking the p*** they will reduce the limits on what you can produce.
AS HH is one of the few bright lights in their onshore universe, and because SS spends a lot of money on science and doing things properly he's had a pretty easy ride.
Thorpedo
The other restriction that prevents excessive oil being produced under EWT by the the OGA is how many tonnes can be produced.
New allowances need to be applied for & may be granted based on costs submitted.
We are all aware that the OGA only granted a 2000 barrels oil allowance when HH1 was drilled & UKOG had to wait until 2018 for a EWT permit. They will have restrictions for the increased allowances as they progress.
This is madness.
The oil sales are , in reality cash in. It doesn't really matter where you put it in the accounts that cash can be used to offset current and past costs and thus reduce the costs going forward. Double the income form sales and you double the amount you reduce or offset.
Income cannot be a negative cost
Wizard125
The significance of the RNS statement you quoted is that, unfortunately the oil sales is not Revenue but a negative cost. If it was Revenue then UKOG would be entitled to the Telluran 35% bit. As it is set off against costs we are not. The costs are also historic costs not just current. The whole purpose of the restriction is to stop Companies having a production licence via the back door (EWT)
Revenue also aids lending again t
Wizard
That is an assumption yoj have made. I asked fpr the rule not your interpretation of a bit from an RNS about internal accounting. Mirasol posted a fair bit of the rules and it isn't in therr.
and the excerpt from that post looks very selective and certainly doesnt say I don't think HH-1 won't producr more than 200bopd. When was the post you have 'quoted' from
Penguins
A exert from your post. 200 bopd from the Kimmeridge (despite assertions the 'taps' would be opened up this seems to be about what the Kimmeridge is actually capable of.
If you read the RNS of 18 Janurary. UKOG can not post any revenue from EWT only net off oil sales against costs.
On your assertion where else will this extra money be allocated?
The EWT has already been issued so pron not related..
Wizard
You might very well think that; I couldn't possibly comment.
Ibug
Do you think that is why Alba are taking on a new debt facility?
Argus
412 tankers, I do believe.
"The reason for this is that current oil production is only allowed to cover EWT costs under OGA rules."
https://www.ogauthority.co.uk/media/5476/oga_extended_well_test_guidance.pdf
Under the model clauses of a licence, the consent of the OGA is required to undertake extended well tests - extended periods of test production from exploration or appraisal wells prior to development plan authorisation. It should be noted that EWTs are not an alternative to production under a consented Field Development Plan; the Exploration Operator (or Field Operator if one has been appointed) needs to demonstrate to the OGA that the primary objective of the EWT is to
obtain essential field information to improve technical understanding or confidence in the performance of the field to progress towards a development, and to demonstrate that the EWT would not be prejudicial to ultimate recovery. There is, however, no obligation to proceed with a development following an EWT if the EWT demonstrates there is no MERUK opportunity. The OGA notes the issue of an EWT Consent does not of itself constitute the development and production
consent required for a licence to enter its final (usually third) term.
cups even! :@)
Yes I was trying to say we have billions of egg ups produced.
Deanhopeful, more than the less than one, that the troll's boss publicly stated, and has looked a total fool since and is a reason he has had so many of his salad washers continually deramping here.
About the same amount as there is shares!!!! :@)
Pboo, 410 tankers, 10,000 tonnes of oil to date from HH1.
For our trolls, any idea his many eggcups that is?
Good support at 0.70 ;)
MMs really don’t want 0.65p to go
HH1 initial limit was 5000 tonnes and has been increased by the OGA many times.
410 tanker loads have left the site so approx 10,000 tonnes to date.
HH2 from what I remember has an initial limit was 8000 tonnes.
I wouldn't worry too much. They haven't even reached 10% of what the OGA allowed yet. It is a figure applied for and then agreed between both parties. "The OGA may also carry out a financial capability check prior to issuing an EWT Consent"
Interesting Wizard
Can you quote the OGA rule that limits production to the cost of the ewt, once you've done that maybe you can explain how you know how much the ewt is costing and finally can you show a post where I have said HH-1 wont produce more than 200bopd.
They don't need a production licence, they need FDP approval, but youre right they do need a CPR.
"The reason for this is that current oil production is only allowed to cover EWT costs under OGA rules."
Including Haliburton costs? Gives us some breathing room.
skwizz
Two variables in increased delivery are how many BOPD HH2 will flow with the water fix.
The production licences for HH1 & 2 is the other which is all a matter of time.
A updated CPR will also add value as it will provide NAV which will aid reserve based lending.
The reason for this is that current oil production is only allowed to cover EWT costs under OGA rules.
Posters like Penguins like to spout that HH1 could not possibly produce more than 200 BOPD but this as I stated to him many times is not my opinion never mind the dual completion of HH1 to flow from the Portland & the Kimmeridge.
Skwizz
"If there's actually anything there, let's see it, sell it, and get any more funds needed from that"
That`s exactly how SS said it will pan out.
No need for the diluting for shareholders if he produces the volumes expected. It was in a video somewhere.