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BP,
Let's see what happens when they test the well properly, which is the plan. The testing as reported seems a shambles - though AIM oiler reporting of testing leads much to be desired.
I don't remember seeing what volume of oil was produced during the tests rather than flow rates which can be deceptive. Did Angus ever publish the volumes of oil produced?
Ignoring the specific water issue that appears to be answered by statements from Angus about salinity there is nevertheless the lack of any other Kimmeridge well being put into production - all supposedly technical successes and much vaunted when drilled - Brockham, Lidsey, Broadford Bridge, even Horse Hill.
True to form :
No revenue is expected from UKOGâs interests in the Pinarova-1 well, which the company previously described as âirresistibleâ and had hoped for ârapid monetisationâ of reserves. Testing revealed an absence of commercial rates of hydrocarbons and has been halted.
https://drillordrop.com/2024/04/13/horse-hill-production-fall-hits-ukog-revenue/#more-104973
In view of the money they threw into the sidetrack, the number and quality of the consultants they (and Angusâs predecessors) used, and the time it took, there would, surely, have been good reasons for each of the decisions they took, at each stage. Wingas could have done the work far more cheaply but didn't think it would be worth the investment. So much so, that they paid Paul Forrest to take it off their hands. Itâs a heavily depleted field with a complex structure. Even with all their new seismic and expert interpretation, it appears to come down to a matter of hit or miss. Lord Lucanâs shortcoming throughout his tenure lay in his reluctance to level with shareholders - and of course in failing to avail Angus of the much cheaper bank finance that he said he was offered nine months or so before the shocking revelation of the ÂŁ12mm loan requirement, and the eight months after that that it took to conclude the equally shocking terms for the loan. One should also remember that if theyâd got the field going again nine months earlier (and they had Covid and related supply issues to deal with) Angus would have enjoyed the big spike in gas prices and would have avoided the huge losses on the first two months of their hedge contracts. It would be a very different picture in such a case. As the poet John Greenleaf Whittier put it:
âOf all sad words of tongue or pen, the saddest are these: âit might have beenââ. Innit?
Ocelot,
Yeah, but either way, Vonk, GL, etc they are just as bad as each other, same as the leader of this too. terrible. BUT hopefully RH is a little more on point, though much damage to repair.
Bubblepoint,
Appreciate your posts of this morning.
In fairness to George Lucan, the testing of Balcombe pre-dates his time at Angus, going back to Paul Vonk.
Hi ZYX,
Yeah pretty disappointing in that regard, as you say, cheap & cheerful to use and clearly demonstrates what is what.
That said, Angus were imo "sloppy" much of the time in their past, and their past leader Lucan, left a lot to be desired in his approach and corner cutting. I do believe the new leadership is a "little" more switched on, and prepared to "try" and stay on the straight & narrow, which "may" at least ensure they do this properly the next time round, ultimately resulting in a definitive proven or fail, not some carp that is full of grey, foggy sheite and unanswered questions.
BP,
Pretty much what I was thinking when I read their RNS's at the time.
The one thing that did surprise me was that they apparently didn't use a tracer in either the drilling fluid or the kill brine.
Maybe because I've spent most of my time doing Exploration Wells, but I've always insisted on using a tracer - preferably an Iodide tracer.
Easy to use, cheap and with an Iodide tracer, (unlike others) there is zero chance of any confusion as to what is formation fluid and what is fluid that you've used during drilling / testing.
Penguins, below is my take on Balcombe, using ALL info and my 30+ years industry experience & Knowledge, may prove right or wrong, but from my side I deem it VERY strong potential. I wrote this post about a year ago for the Angus board, but since you are discussing it then I thought I would put it here too.
My take on Balcombe:
Primarily Balcombe was a successful discovery, they discovered light oil and produced from it under testing conditions.
The well had to be lifted prior to testing, meaning they had to run coiled tubing to enable pumping of Nitrogen which lifts the column of kill fluids, residual drilling fluids etc that are sitting in the wellbore and preventing the reservoir from producing any hydrocarbons.
They achieved natural flow to surface for both tests, the first test produced notable water along with hydrocarbons, roughly 850bbls of oil with approx. 200bbls of water.
The second test flowed naturally to surface at almost double the flow rate of test 1, approx. 1600bbls of hydrocarbons and a much reduced volume of water, approx. 105bbls water.
The Company also noted they initially recorded flow at around 3000bbl/day with the well slugging.
What do I take from all the general information available and apply my take on that ?
OK, I donât take much notice of the stupidly announced initial slugged 3000bbl/day, why ? because often what companies do is they might get say 125bbls of oil slug to surface in the first hour only. What do they likely mean by âsluggingâ, well this is most likely referring to the coil tubing that is pumping down nitrogen to start lifting fluids out of the well, the nitrogen is a light pocket/bubble of gas pumped under the column of fluid in the well, the gas wants to rise to surface and while doing so the pockets of nitrogen lift/drive out the fluids above them. The slug is referring to the pocket of liquids being lifted by the pocket of gas to surface.
So what a company can do is say Heyyy ok there was still a chunk of nitrogen left in the horizontal when we opened the well for the first flow test and that nitrogen came out from the horizontal and then slugged up some notable slugs of oil to surface, equating to 125bbls in the first hour, 24 x 125 = potentially 3000bbl/day.
It isnât a good idea to spout slugged numbers, they are very unreliable and likely without the residual nitrogen escaping back out the well. It would never naturally produce such a high constant 24/7 rate.
Move on to the âactualâ rates, the 1st flow test had a 22% water cut, which they were not expecting, and with this amount of water entering into the wellbore will seriously inhibit production and flow stability, water is heavier (denser) than oil so any water rising up the wellbore will weigh on any lighter oil trying to come to surface, this means your wellhead pressure is going to be less and may even stall out to zero if enough water % is entering into the wellbore column to surface.
Move on to test No 2, they flowed at double, approx 1600bbl/day, and MOST importantly only produced around 105bbl/day of water. You ask HOW so ? surely double the oil rate should = double the water rate.
For me it was very significant, it was demonstrating that whatever water was remaining in the wellbore and near wellbore reservoir was depleting, it was depleting because this water was pumped into the wellbore likely as a âkill fluidâ and because water is more dense than oil, it will try to go all the way down, and possibly push into the near wellbore reservoir, where it will sit until the day someone lightens the fluid column back to surface again, and then what happens is the oil sitting behind the suppressed water then drives the water outwards and upwards to surface.
What they eventually discovered was that the water was of high salinity, similar to Brines used for well kill purposes etc, and the salinity did not correlate to anything within the region.
Therefore I strongly expect that a much longer test period would see water production eventually decline to zero.
Importantly, what needs to be considered is that the Balcombe target reservoir was only 2700ft from surface, which means that the pressure at reservoir is very likely not that high. Example, if the pressure at reservoir is say 1000psi, and say light crude oil has a gradient of 0.2 psi/ft then that means the column of oil to surface (2700ft) weighs 540psi, meaning you only have an underbalance at reservoir of 460 psi trying to push the oil out at surface. (simplified in layman terms), if you have saline water in the wellbore too, saline water could be 0.5 psi/ft, so if you have 1/3rd of your wellbore with saline water in it and 2/3rds filled with oil to surface, then the surface pressure will be zero, the column weighs greater than 1000psi at reservoir and you well will not flow until you remove more water.
My take on the actual flow rates achieved: The Company stated it was a 7 day test, but did not state how long each test was physically run for, it could be hours, it could be days, only they know. But the important fact here is they did demonstrate highly mobile light crude that did produce naturally and dramatically improved by the 2nd test, that tells me the reservoir pressure isnât huge at that depth, because the significant increase in oil to surface was because the saline water was also significantly less, meaning less weight of water in the column to surface holding back the oil wanting to get out.
Is Balcombe commercial ? In my opinion it is highly likely it is commercial, but it is highly likely that long term sustainable production would be by installation of completion with pump to eliminate the issue of wellhead pressure/reservoir pressure decline.
What rates are possible long term? I do not think they would look to produce big numbers, I think they would go for much lower steady & continuous production, maybe 300=500bbl/d. I think that for 2 main reasons, firstly to best manage the reservoir and allow optimum drainage to be achieved, and secondly it is highly likely Balcombe would require onsite facilities to process and store, before being road tankered away.
A typical tanker can hold around 200bbl, and I do not think they would push locals and local routes with more than 2 possibly 3 tankers back and forth each day, even that could cause local irritation and issues, and likely onsite storage would need to be limited, maybe 2000bbls processing and storage to limit local focus.
That is my take on I ;-))))))))))))
2/10/18
'The water produced was not expected, the Company's testing team believes a small high-pressure water zone was intersected in the horizontal section of the well which will require isolation in the future.'
Not sure that is as encouraging as just cleaning out the kill fluids a d everything will be fine. UKOG initially just thought they needed to isolate, in the Portland, a fracture zone in the toe of HH-2z - and that was after UKOG had run logs to identify where the water was coming from.
The Kimmeridge is expected to be fractured, the reason it can flow reasonably if only whilst 'unloading' from the fractures, and in 2018 production from the Kimmeridge at Horse Hill was still planned so was used as an example by Angus of the Kimmeridge performing well vs what happened at Broadford Bridge.
Even if water influx isn't an issue long term production from the Kimmeridge at 'strong rates' is yet to be proved anywhere, I'd certainly be cautious about initial flow rates being indicative of anything much except an opportunity for a P&D.
I hope Balcombe proves the Kimmeridge can be put in to long term production, but it certainly isn't a done deal.
Cyan,
You are far from correct regarding Balcombe, it has been clearly demonstrated that they simply failed to clean out the kill fluids etc from the drilling processes during that initial test that was performed, the plan going forward is to re test it and ensure it is cleaned up fully, for which I strongly believe will prove strong hydrocarbon rates.
Brockham IS a total waste of time, but likely Angus simply want to play with it and squeeze a few more worthless barrels out of it rather than P&A and have to run the "return" to field restoration cost.
Bubble point point wrote "ITS BROCKHAM not BALCOMBE,"
The point of my post was in response to Ocelot's line;
"Balcombe is a promising horizontal well into the Kimmeridge so may have implications for UKOG."
Ocelot appears to be trying to make a general implication about the Kimmeridge and how it impacts UKOG.
We know that UKOG have acknowledged that both Broadford Bridge and Horse hill Kimmeridge are not commercial.
I am highlighting Angus previous experience with the Kimmeridge which they gave up on at BALCOMBE.
Will the Kimmeridge be found anywhere commercial based on all theses and other companies previous experiences?
Appears unlikely to me and UKOG do not now talk themselves about retrying to extract oil from the Kimmeridge by any other means or technique.
Sanderson had his general theory of enormous wealth (retiring to the Bahamas) based on his continuous oil deposit theory ;COD.
Unfortunately its 'tight' and UKOG seem no longer interested in the COD as evidenced by their preference for spending money in TĂźrkiye instead, rather than on using new techniques at BB.
The Kimmeridge dream is dead.
TICKKKKK tockkkkkkkkkkkk !!!!
As for PPP, they (Leni Laughing" gas) is just as much a liability and this confetti manufacturer is.... and has NO chance of setting foot on Donkey hill to drill.
Adrian,
Still a complete waste of skin.
Reported and binned.
Again.
Oh Adrian
You can only tell porkies can't you, never the truth. They can only drill another 4 wells and one of those will only give them less than 50% if the deal with PPP ever goes through which is highly unlikely.
Adrian
Just because I sometimes drive the other half's e-car I'm not as green as you are and we don't have swamps out here unlike the mud pit you love playing in at HH.
Adrian
You tag teaming again? SP not doing your 10m+ shares any good with worse to come. But then again you and Pboo have a lot in common.
Pboo
7,366 posts about O&G. Complete ignorance, serial loser and personal attacks on any one who says it as it is. You keep saying you are not invested here but we all know you have taken a big hit from 8p all the way down to what it is today. You really are a sore loser. Think it is you that needs to get a life.
9629 rubbish posts all about UKOG
You need to getba life ibug.
Ocelot
Does that mean you are including all the O&G assts as non-core? The only problem being is the de-commissioning costs any buyer would have to pay when they realise they have been ripped off.
Much bigger company but Petrofac's RNS of this morning included this paragraph:
The Company has engaged and remains in discussions with its lenders to restructure its debt which would result in a significant proportion of the debt being exchanged for equity in the business. It also continues to be in discussion with prospective investors and certain major shareholders in relation to potential further investment in the Company and remains in negotiations with prospective purchasers regarding the sale of non-core assets, as set out in recent announcements. All options remain under consideration.
UKOG still owe RF/YA about ÂŁ500k which is now nearly a third of marcap. It doesnât look to be sustainable to keep on buying and selling 6% of marcap shares for either party.
I wouldnât be surprised if a deal was done where UKOG pays them off for say ÂŁ350k. It would of course have to be part of a larger multi-million fund raising which I suspect is coming as UKOG currently canât afford to peruse any of its dreams.
13 Mar 2024 09:29
Future conversion of these Equity Shares by the Investors will further reduce the principal balance of the ÂŁ2 million gross first cash sum received below the prior ÂŁ0.66 million figure announced on 23 January 2024.
Anyone care to guess when the next "Loan Reduction via Equity Share Subscription" will be given that YA are getting through about 155m shares a week?
ITS BROCKHAM not BALCOMBE,