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DelBoi - Sorry for the slow reply, been offline for a few days.
The multiple reservoir theme is similar to the previous successful Al-Jahraa 7 well which found pay in 5 intervals - that included the Upper Bahariya which was a new discovery. Looking on the map, the Al-Jahraa 12 well is pretty close by.
When BL referred to a 'drill in progress' on interview, I assume he means the 4th drill of 2019. Al-Jahraa 12 (Drill number 3) should be well into test assuming it was a success (TD should have been reached early October)
Theres probably a lot of investors sitting on there hands waiting for the election and more clarity over brexit.
Hopefully we'lll have a bit more certainty after tomorrow and i can see as we move into 2020 that investors will see the potential here at UOG
This is a gem and imho and a steal at 3p, i wouldnt be suprised if we drop a little further, and selfishly i dont mind if it does as i am buying at these levels and will continue to do so
Delboi - think you're on the right track here. People might not be happy with the discount or the terms of the deal, but any good RNS could see this move a decent amount - remember RKH etc are locked in for a year.
Hi Badger, I have been looking back over past RKH RNS’s, it appears that the Al Jahraa-12, the one currently on test/or still drilling is the only well to date that has been deviated and targeting multiple zones.
RNS 7 August 2019. “The well is being drilled as a deviated hole to appraise the Abu Roash-C downdip of the Al Jahraa-3 well and in the water leg. In addition, it will further explore the potential of the Bahariya reservoirs.”
This drill appears to be quite different, certainly more complex with more targeted reservoirs then previous drills on the permit. It also suggests that there is an exploitation leg to this drill, into a number of “reservoirs”
Time will tell, but this is where I believe significant upside may come into play. Impacts of which could well be transformative for the 4 fully funded drills next year IMO.
Either way , for now, 1100 bopd is exceptional for company of our size. Value will eventually win out.
DelBoi -
FYI the 2nd well drilled this year - Al Jahraa 7 - gets a mention in the Readmission pack though the figs aren't included in the CPR tables
Page 24 - 'The successful well at Al Jahraa-7 has been put into production and in late August was producing at >600 bopd'
No mention of the result at Well 3 - Al Jahraa 12- or if drilling of the final 2019 well has commenced that I've seen yet .. its 400 pages so I may have missed it. Initial flow rates for Al Jahraa 7 get a mention in the CPR on Page 213.
Production to UOG should be c. 1130 + 600*22% = 1,262boepd including Al Jahraa - 7
I have faith the the track record of the board and in the assets they are building
Not sure that blind faith is the best investing strategy but whatever works for you
Rome wasn't built in a day. Have faith this company is going places.
I'm really not trying to antagonise anyone here... I don't like the deal and you do, and it doesn't seem like we're going to change our minds any time soon :)
I've said my bit and the market doesn't seem to like it - we've just gone sub 3p... But let's see how it pans out and hope for the best.
wh0sthedaddy BP with their vast wealth and experience must be spoilt for choice for what they get involved in. They probably sift through tens of projects a month. So whichever way you slice it BP have found something they like in this project and the UOG mgt'.
Look like I said I am mightily annoyed at the placing price and the fact it has hardly been the transformational project for the SP we were promised, yet, but it is a country mile from what you are making out.
That's BP group with a small "g"... I've asked UOG which BP entity it is that they're dealing with.
A BP technical team worked closely with UOG on this deal, 1100 is great win for investors, but what the market IMO is failing to consider, for now, is the upside potential with infrastructure already in place to increase production.
Al Jahraa-12 (formerly WI-1)
The third Al Jahraa field development well (Al Jahraa-12) of this campaign was spudded on 4 August 2019. The well is being drilled as a deviated hole to appraise the Abu Roash-C downdip of the Al Jahraa-3 well and in the water leg. In addition, it will further explore the potential of the Bahariya reservoirs. The well is anticipated to take around 55 days to drill, test and complete.
I’m keen to understand what they have uncovered down in the deeper sands. Exploration upside here could be massive IMO.
https://www.bp.com/en_gb/united-kingdom/home/who-we-are/bp-group-at-a-glance.html
BP are very close to UOG and imo will work closely together in the future
BP are prepaying for $8m worth of oil from the field, that's it. That is the limit of their involvement. They are not investing in, or alongside UOG. They are buying UOG's output upfront in order for UOG to fund the deal, and their $8m loan is secured on the field itself.
Also it's extremely odd that they refer to the lender as "the BP Group" in the RNS. There is no corporate entity of BP called "BP Group" so it'd be interesting to know which part of BP they are dealing with.
No that's not my argument wh0sthedaddy. I said why would BP get involved if it was a poor investment as you say?
@ghrtrader/levistubbs your argument appears to be that it must be a good deal, because otherwise we wouldn't have done it. By that logic every deal ever done must be good for both parties?! That makes no sense, especially when you look at the sorts of crappy deals O&G minnows do.
The share price tells you everything you need to know about this deal. It's ****, sadly.
Yes I would guess that is right Badger.
That's a very good question given TLW's current position. Their 'New Ventures' budget presumably is getting significantly trimmed and 2020's plans will probably be steered by whether the current Guyana drill is successful and finds light oil ?
That may be true Badger, is he finally learning something, to under promise and over deliver instead of the opposite being true.
Another headache is how they hope to progress Jamaica now that Tullow are in a spot of trouble.
levistubbs - I think BL is just covering his tail given that they only currently have outline/preliminary approval for production in Italy. Roughly 9 months from full approval to first gas (from Po Valley website), so there won't be much cash generated in 2020 from Selva even if they get a wiggle on.
Feel free to provide an answer wh0sthedaddy.
What concerns me at the moment is the wording about Italy and why we are now saying potential production?
wh0s the daddy .. definitely positive views are not only allowed, people just don't like hearing negatives when money is involved. I'm hopeful there will be a decent move soon
wh0sthedaddy, They didn't need to buy Egypt. If its such a terrible deal why did they buy it?
wh0sthedaddy whilst I am annoyed as you at the placing price and the transformational talk has lost more than a little of it's shine, I have to ask why would BP stump up the money if it was a crap asset that wasn't profitable and would deem their involvement idiotic? Do you think there is soneone at BP with a screw loose?