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The planning application may have put the myth to bed that any time soon UKOG will firstly pay off this CLN with cash, or stop having to use sharecoin.
Restricting export to 3 tankers a day until the full site is up and running suggests that at best test production might cover ongoing costs, but how long before even 3 tankers a day are seen? Fix confirmed as having worked, rather than attempted, by Monday seems highly unlikely. Maybe they will have decided what fix to attempt, and start deploying the necessary equipment down hole, as long as it is on site. Assuming it is simple (eg a cement job) as well as routine a short wait then they will need to test the well before demobilising all the kit, just in case the fix fails. Maybe a few days of test production, and then, assuming all is OK dismantling and trucking away the CT unit and all the other kit.
3 tankers a day 6 days a week, we shall see, that.s about £750,000 a month. UKOG consolidated cash accounts suggested gross cash outflow during the tests in the 6 months up to March 2019, plus all the other costs of running UKOG and it's subsidiaries, of at least £1mm a month. While Horndean helps with the petty cash there could be the need for a little 'top up' before the full site refurb and extra well/s paid for (hopefully) by a RBL.
Last plan was that HH-1 will be put into long term production 'soon'. HH-2z would be ewt 'd until Q3 when HH-2z would be put on long term production and perhaps another well would be drilled. That would seem to be the time that they might embark on the site reorganisation. By then they should have a CPR for the Portland so maybe at last they could start financing operations using RBL - of course depending what exactly,the CPR says, the complications of compartmentalisation and water conduits will add to the complexity, and perhaps uncertainty in any model used to create a CPR.
I agree but the CPR will not be a surprise on HH-1 since we already know it's coming and will be in place this spring before production officially begins.
As we all know once we have the CPR declared we have a very valuable asset the company can go to the bank with for proper long term loans and then the flood gates will be open for quicker expansion.
As each asset is declared more and more money will be available..... this will expand and grow exponentially.
Which is why UKOG are working on planning for all their other assets right now. They want to be in a position to moneties them as soon as possible once big money starts flowing..... no frustrations waiting for admin and bureaucracy.
GLA
Penguins, that figure includes amounts attributable to the group decreasing its trade payable, an increase in abandonment expense (Mark Woods) and the increase in administrative expenses (increased employee costs).
Once the fix is complete (from existing funds) expenses will be minimal and I would anticipate that 3 tankers a day would produce cash flow for the company assuming we come out of the fix with cash in the bank.
Or we may just be bought out within the next 2 to 5 years.
Bridgedogg,
I'm satisfied that during testing, plus the costs of running UKOG and doing stuff in the other subsidiaries (planning applications etc) there is an underlying cost of about £1mm a month. The 3 months following the end March 2019 appeared (with SS stating they has 'less than £8mm left at end June, though no details) to have gross outgoings of about £1.1mm per month - these one off costs do seem to keep on cropping up. (The gross outgoings per month in the 6 month accounts up to end March were about £1.285mm.)
There was also the £2mm raised in early December which looked like a cheeky top up to keep a cash cushion until HH-2z started producing in late December.
But comparing this:-
'Once the fix is complete (from existing funds) expenses will be minimal and I would anticipate that 3 tankers a day would produce cash flow for the company assuming we come out of the fix with cash in the bank.'
with this (from GM RNS):
'Therefore, the Board seeks approval to increase its authority to allot and issue shares so that it can act swiftly to establish Production via an ability to fund the Company's Horse Hill FDP and to ensure that the Second Deferred Payment can be satisfied.'
Doesn't really sound like they are hopeful that 'existing funds', and by inference cashflow, will be sufficient to satisfy the immediately upcoming work of course if they could get a named ii for a placing rather than a CLN this would not be such an issue
We shall see, as production is now planned to commence by bringing HH-1 into Production during Spring 2020 and this revised authority expires at the next AGM I assume this is the 'swift' bit.