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Good morning Mirasol
You wrote;
""They will never return to BB"
Except to P& A the well and restore the site of course - more cash needed"
Yes , I should have added except returning to abandon and the associated costs
The council gave UKOG a 2 year permission extension on 9.7.20 which expires on 31.3.22.
I believe UKOG are stalling for time as they really do not want to find cash to restore the BB site. Expenditure plans and available cash resources question brings us neatly to the AGM resolutions.
UKOG looking for authority to issue 3 Billion more shares;
"Resolution 5 – Directors’ Authority to Allot Shares
This is an ordinary resolution to grant the Directors with authority to allot and issue shares and
grant rights to subscribe for shares in the Company for the purposes of Section 551 of the Act
up to the maximum aggregate nominal amount of £300,000. This resolution replaces any
existing authorities to issue shares in the Company and the authority under this resolution will
expire at the conclusion of the next annual general meeting of the Company.
hTTps://www.ukogplc.com/ul/607d7eb9940ce_UKOG_Notice_of_AGM_corrected_190421.pdf"
"They will never return to BB"
Except to P& A the well and restore the site of course - more cash needed
" the capital risk is less than that involved in the UK."
Fair point ocelot when we recall that Sanderson's Broadford Bridge drills were written off for an eye watering amount of cash;
From the YE 2019 annual results we learnt that Sanderson's BB 'roll of the dice' cost dearly;
"There was also one exceptional charge. This was an exploration and evaluation write-off of GBP11.56 million. This was primarily comprised of a GBP9.25 million write-off of the BB-1 well and the BB-1z test. The BB-1 well was impaired, as it was determined that as a result of wellbore damage we would be unable to be used for production. The BB-1z test was impaired because, although oil flowed from the well it was determined that it was unlikely to be commercial. The larger majority of the remaining exploration write off (GBP1.21 million) related to Holmwood where the operator abandoned the site."
They will never return to BB
They are questions to which no clear answer can be provided.
On the positive side, and as SS has pointed out, the capital risk is less than that involved in the UK.
Ocelot;
I can only speculate, as do many .
My guess is , others looked and thought the potential returns were not worth the capital risk.
Good questions - it seems nobody valued the opportunity as much as SS / UKOG and under the circumstances AME were happy for UKOG's shareholders to 'pay to play'.
If only SS / UKOG had not already shown unfortunately costly confidence in buying up Weald assets punters might be a bit more optimistic.
I suppose if you get paid a grand a day you need to find something to do to keep 'earning' your wages. Fortunately SS has loyal shareholders with deep enough pockets.
cyan2,
When you've obtained the answers to your questions, please inform the board of them.
" not impact upon any future success or revenues from our Turkish assets"
Success is not guaranteed . Sanderson himself described the Turkish drill as "a roll of the dice". Its a maybe.
I see Penguins has done some research and discovered that success in that region has been demonstrated BUT that volumes produced are frankly small.
This adventure makes me ask the following questions;
Why has it taken 56 years for anyone wanting to revisit the area of the abandoned test?
Why didn't another of AME's usual Turkish partners want to invest?
If its such a great opportunity; why didn't AME go it alone or with a serious big player like GENL who could have swatted UKOG aside; they know the region really well.
AME have got UKOG frontloading all the risk with UKOG paying 100% of the first drills cost.
The fact that the very modest abandonment penalty payments were mentioned in the announcement RNS signals to me that the possibility of a first drill failure and abandoning the 4 subsequent drills has been considered.
The write down this year will therefore not impact upon any future success or revenues from our Turkish assets. (from SS's statement in the last Friday's RNS).
In other words, we've cleared the decks.
They seemed to have forgotten to mention in their tweet about the final results that they've written down £14.6mm of Assets. Ocelot was pleased with that because it cleared the decks ...
------------------
Yes, it seems to me the accounts now reflect what is happening on the ground, the disappointing results (to date) of HH have been recognised, investors are being invited to focus on the future and, in particular, in the near future, on Turkey.
UKOG have limited ways to raise more cash and the recent comment in the final results suggests that further placing's are the way UKOG intends to finance growth in the near term at least.
RBL; reserve based lending was the hope. Before lenders; like the banks will conventionally loan they would want to inspect an up to date CPR . Is there a sufficiently valuable asset to possibly secure against, to loan cash ,.... at a cost, of course.
However , the latest annual report has this passage;
"Consequently, as CP's generally require around a minimum of one year's stable production history to adequately capture and predict the longer term decline performance of a well (Horndean's performance, as above, demonstrates the importance of a year-long decline period), it was decided that the best practice was to assess reserves only when a more robust and fully representative decline curve analysis could be undertaken. The Company will thus wait until the next reporting period to calculate the field's reserves following the first full year of stable production."
Since UKOG have not yet achieved a stable production; it appears there is a very long wait until a new report is commissioned.
Buried deep in the results is this significant impairment review;
"The Directors have carried out an impairment review as at 30 September 2020. The Directors determined that the net present value of the HH-1 well was £4.78 million and therefore determined that HH-1 should be impaired by £9.35 million. The net present value utilised an internally generated depletion curve that was independently reviewed. Costs we based on current costs less any anticipated savings"
'HH-1 should be impaired by £9.35 million. The net present value utilised an internally generated depletion curve that was independently reviewed'
That depletion curve must have looked ugly
The question that follows would be just how big is that HH asset in the ground?
This passage suggests there MAY not be a very big one;
"For guidance purposes only, the Company's qualified persons ("QP") consider that the 1C value of 0.6 mmbbl carried for Horse Hill in Table 3, below, provides a reasonably representative view of HH-1's likely technical recoverable Portland reserves at the end of 2020. "
600,000 barrels 'likely technical recoverable' Not a lot .
Turkey is , as Sanderson himself conceded; "a roll of the dice" .
UKOG's current revenue stream is wholly inadequate to cover the ambitious development plans which include a second Turkish well this year.
They seemed to have forgotten to mention in their tweet about the final results that they've written down £14.6mm of Assets. Ocelot was pleased with that because it cleared the decks - but they are still retaining a lot of expenditure on HH in the 'assets' that seems unjustified when the only producing well has an NPV of less than £5mm - and even that isn't supported by a recent CPR, or any CPR with reserves - it seems that's an internal figure and mere investors aren't privy to any justification, even for that disappointing valuation.
As for the 'increased' resources there seems to be a mismatch between what they put in a presentation about Turkey for the resources at Arreton (2.6mmbbls) - and what they put in the Final Results (16.3mmbbls) - is that because it wouldn't have made Resan/Basur look so much better? Or is it that the significant increase in resources in these results due to Turkey and Loxley would be significantly reduced if the Arreton resources weren't quoted in full. There is also an issue of quoting 2C resources for Turkey without publishing the full details of the reporting behind the calculation - like maps and anticipated flow rates, and their attempt to make the Loxley study seem more thorough by describing it as a Competant Persons , err, study.
They also no longer list the billions of barrels of Kimmeridge OIP that was in last year's report because RPS produced a report in June 2019 (which was after a lot of Kimmeridge ewt, and significantly before last year's report, yet not mentioned) that had 1.4mmbbls of 2C (contingent resources) for the Kimmeridge at HH (yes millions, not billions)
Unlike the study by Xodus of Loxley which they summarised (again figures without details) we wait nearly 2 years and only find out about it in a footnote. I suppose they wanted to add the extra 2C resources to the total rather than the obviously irrelevant OIP.
Annual Report and Account's for year ended 30 September 2020 Published, Significant increases in reserves and discovered resources, reductions in admin and operating costs.
..................................................
Oh dear, Trolls better get in, instead of hanging around the Ukog board....
Soon be "BLUE"
,
You got 'took', Bcarm.
Now you're just trying to con others into giving you a way out.
As of now, looks as if UKOG has taken in its stride last Friday's after-hours final results RNS.
Lol or if you like have a **** day and sell,
5% down, and you are wishing holders a good day. You are a troll; some people have more invested than pocket money.
Hope all holders have a lovely day, and if you don’t have any Get some