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So now that you've finally accepted that HH1-z isn't actually going ahead, you've decided to ignore UKOGs (more than often) quoted 362 bopd 'optimised' rate from HH1, and instead hope that they'll just bump it up to 1K instead to make up the shortfall?
OK mate, if you say so...
Wasn't the original plan for HH-1 to test KL-2 layer before being put on production or has that changed
To get the maximum flow from the Kimmeridge they would need to have the KL3 and KL4 producing and the 13 3/8-inch casing could quite easily accommodate all three zones.
Now your talking my type of talk.
I can't wait .
GL to all
Trollhunter - I filtered Pingu a while back. Darwin would be proud of me!
Not that hard, as Alan2017 said many times HH1 was frilled as a test well not a production well so the Portland has quite large diameter casing, more than enough room to fit 2 production tubes.
1000bopd from HH1 and 1200bopd from HH2 would generate approx 600,000 per week 30 million per year.
It certainly will flow!
Let it flow, Let it flow comes to mind!
Don't even bother reading more reams of Pingu negativity.... move along.
UKOG IS BECOMING A MID-CAP OIL PRODUCER IN THE SOUTH OF ENGLAND..... worth shouting about :-)
The rig will leave the site.
Dunsfold planning may have been passed by the time drilling is complete but site prep will take weeks with membranes, bunds, drill pad and EA inspections, the access road may be upgraded but the rest needs planning permission. Arreton planning hasn't even been submitted, nor BB -1Y. HH-1z is the only game in town (as the cellars aren't constructed for HH-3 to 7) and unless there is another u-turn that's been kicked into the long grass.
As UKOG hasn't specifically mentioned the plan has changed I would assume it's not a good reason such as the vertical well could flow 1000bopd from the Kimmeridge sustainably (or even initially). A while ago I suggested it could be to build up cash as the testing and other operations were clearly draining cash at an alarming rate despite the oil sales, that could be part of the reason as long as the ewt actually generates more income than expenditure.
I would reread the 7 August 2019 RNS though rather than something from 2018 to get a feel for the funding position.
This states money for HH-2 / 2Z had been ring fenced. Some (a lot?) of the £5.5mm convertible loan was needed to pay Tellurian's £5mm (despite having raised £5.5mm for new ventures etc. previously and only spent a bit of it on equity purchases) and the remainder needed for all the work to bring the field into long term production which in the short term seems to be HH-2Z and HH-1 (RNS 15 October 2019):- 'both HH-2z Portland and the HH-1 Kimmeridge well are expected to be put into long term production by the end of 2019.').
I won't get hung up but 1000BOPD is £60,000 revenue per day & over 3 months that is £540,000 not brought in which is about £360,000 profit lost.
Thanks for your thoughts & they make sence. It is obviously a little disappointing after all the talk of HH1z & 2000 BOPD being long term production by the end of 2019 to be in muddy waters.
I am very happy t the progress on HH2z & look forward to good news in the days ahead.
My understanding is that a dual completion can be done but would be fiddly
Not sure you can do it and then sidetrack - you'd have to kick HH-1z down the road for a while and then pull the completion and side track later
Right now HHDL have a lot of options - which is a good place to be in
I'm sure they are working flat out on the conditions - given their good working relationship with the council planners I doubt these will occasion serious delays.
Wizard - I presume there is one AFE for -2 and -z and another for -1z
These are of course estimates (with a contingency built in) but they don't ring-fence against each well atthis stage. They will driland complete -2 & -2z and then look at the ccash inthe bank to see if they have enough to drill -1z.
I think they may have cut out the original idea of coring (or at least logging the-2 i n the Kimmeridge section in favour of the extra core 4 in the Portland.
It's a fast moving situation that changes hour-by hour............. when you have a rig drilling it's around £40k a day all up - people have to take decisions QUICKLY so don't get hung up on changes
It is also possible that HH1 could be given a workover and a dual completion string put in to enable them to flow both the Kimmeridge and the Portland at the same time. That would give HH1 a flow rate of approx 1000 to 1200bopd without too much further cost.
Before HH3 - 4 -5 - 6 can be drilled there is lots of site work that needs doing but that cant be started until approval is given by Surrey CC.
Planning was passed but numerous condition were placed on UKOG before work can begin
Revised transport plan
Noise monitoring plan
Surface water plan
So my thoughts are.
Rig will drill HH2
Possible workover on HH1
Rig will leave the site
HH1 and HH2 will flow as production wells approx 10 tankers per day generating funds to pay for all the other works and leaving some spare.
Work will start on the infrastructure as soon as the relevant condition are met / approved.
When all the new storage, gas to wire generators, oil seperator etc etc are in place then the rig will be brought back to drill 4 wells back to back.
Whilst the rig is there It is also possible that they could as originally planned drill HH1z They do have approval to drill HH1z Kimmeridge horizontal and all conditions have been met on the planning approval for HH1 and HH2.
I like the thought of flowing HH1 kimmeridge and Portland at the same time.
I know SS and the team have thought about it as it was mentioned on our site visit.
"Could it be the case that they believe from the flow tests that the HH1 vertical well can flow 1000 BOPD without needing to be sidetracked."
They have been very careful to keep rates in the 200-250 bopd range from both levels.
the 3x improvement for the Portland often quoted is a rather unscientific rule of thumb guesstimate by both HHDL & XOdus - nothing wrong with that but it's not terribly scientific.
I assume the detailed calculations they must be making now still support 3x - say 700 - 800 bopd AS A MINIMUM - other wise I suspect we'd have seen weasel words by now. A lot depends on just how long they can actually drill the horizontal and how accurately they can steer it to stay in the reservoir. Then you have pump performance to take into account.
Right now I think Sanderson is playing it being quite conservative
For the Kimmeridge I still get the impression they really don't understand the reservoir in any detail - it's a fractured limestone shale sequence flowing over 600ft vertically from fractures...... and no water. try Googling THAT fro analogues.....
If you pulled the Vertical (actually sloping) HH-1 hard you might get very high rates indeed - but how long would they last? You might drain all the big fractures in a week or an hour (see Angus?)
I'm sure they are determined to keep the water out as long as possible - it screws up your production and costs money to dispose of. Far better (for now) to let it chug away at 200-300 bopd -it's a free ride on the Portland after all - until you drill more wells and can figure out what you can and can't do with it.
The interview says the 2 well drill is funded the question is:
Is the HH2 Pilot hole classed as 1 well or the pilot hole & sidetrack as 1 well leaving the funding for HH1z in place & the drill possible?
They will have to shut in the HH-1 to drill the -1z.
I suspect Sanderson is hoping to get (rig) rates from -2z so he will have the cash flow cushion when he stops -1 production. Drilling -1z will be a lot longer than the Portland side track so HHDL may have production consent before it is finished.
Building a new cellar for HH-3 etc will be fiddly if drilling AND producing from the same pad but it's not a major piece of work TBH
One thing for sure - having finally got the rig neither he (nor BDF) will want to see it go to another operator or back to the yard - I'm sure there are plans to keep it at HH until they can move it to the Isle of Wight or Dunsfold
The alternative may be hinted at in 10 September RNS ie. If successful all future Portland production will be from Horizontal wells.
Could it be the case that they believe from the flow tests that the HH1 vertical well can flow 1000 BOPD without needing to be sidetracked.
Muddy waters indeed.
The same RNS also states that HH1 will be put into long term production by the end of 2019 not just production so do you really think it will be taken out of production to redrill it? this was originally stated to be to target 2000 BOPD no figures have been given to date only a vague statements.
I understand that no one new what will happen with the HH2z drill & no well cellar was ready for HH 3 but HH1 could also be drilled as the second Portland horizontal if necessary. As you say things can change.
SS has said that the 2 wells are funded so why not get them drilled together & get back on track. We haven't seen the rig contract but it seems that they are getting through HH2z with lightening speed.
"The rig will leave after HH2-2z, at which point we'll know who's the troll that can actually read the company RNS... Deal?"
we're missing the obvious - HHDL are well behind their 2019 plan announced earlier this year - with immense effort they 've got the planning through and so are back on that track. What they need before getting OGA production consent (and a new CPR) is hard information on the Portland reservoir and horizontal production. The cores give them item one and now they have to go full speed ahead to prove the horizontal flow rates.
IMHO they decided to keep the Kimm flowing as insurance and for the cash flow, cut another core in the Portland as the elog results were a potential game-changer and get on with HH-2z ASAP
Nothing to stop them coming back when -2z is flowing and kicking off -1z in the Kimmeridge and coring that if they want to
Too many people on here believe an RNS is a set-in -stone - plan. When drilling it's a snap-shot in time. 24 hours later it may be all change - to quote Harold Macmillan "Events, dear boy, events..."
The waters are a bit muddy wrt the HH1z Kimmeridge plans. From what I can gather there was a decision back in Sep 18 to deviate from a second vertical Portland well to a horizontal side-track and this has now take precedence over the HH1z plans. Portland being the more "conventional" I think this is probably a good move. It does appear however that there are still pans to drill HH1z at a time TBC.
11 Jun 19 RNS "To facilitate both safe drilling and coring of HH-2/2z through the Portland, to provide continued oil sales revenues and further valuable test data prior to drilling HH-1z, preparations will include switching test production to the deeper Kimmeridge oil pool. Further necessary logistic and administrative arrangements for the arrival of the drilling rig and associated services are scheduled to be finalised this week"
10 SEP 18 RNS: Given the knowledge of the Portland's true flow potential, plans are now being formulated to drill either the HH-1z sidetrack or HH-2 new drill as a horizontal Portland appraisal well, with a targeted* sustainable daily production rate of 720 to 1,080 bopd, 2 to 3 times the forecast calculated* HH-1 vertical well rate of 362 bopd. All planning permissions, Environment Agency permits and the HH-2 well cellar are in place for a horizontal well. If successful it is envisaged that all future Portland production will be via horizontal wells.
Thanks for the great feedback.
Keep up the brilliant work that the eyes are doing for all shareholders.
Can you answer 1 question for me.
How do they get the long solid drill pipes to the horizontal position in such a small diameter hole or are they not solid?
Yep!!!..Surly.......the moon doesn't care for barking dogs....haaa