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Why do people even bother to reply to Penguins?
He or she holds 0 shares. Sad existence sitting behind a computer and posting crap about share your not invested in.
Penguins
Your comment.
They seem unwilling to get a CPR done which they were saying was planned for Autumn 2019 in above RNS
I am glad that I have been able to help you answer your own questions by reading subsequent RNS.
This implys the old figures remain valid & no new CPR will be necessary at the current time.
If you are satisfied you will have no need to contact UKOG or there advisors just keep up to date.
Wizard,
I've explained what is wrong with your assertion 'Now the transport permission is signed off it will be possible to put together cash flow projections base on production that can be exported which up to this point has not been able to take place.'
Perhaps you should contact UKOG and point out that in your opinion they aren't producing cash flow forecasts based on expected production, which would be a serious omission for any company.
If you're referring to my 'the reason a CPR wasn't produced was obviously the failure of HH-2z'
This is from Full Year Results 31 March 2020 RNS:- 'It is our view that it would be prudent to wait to commission a Competent Person's Report to fully capture Proven and Probable Reserves once we have established long-term production at Horse Hill from HH-2z'
That would suggest that if HH-2z did not establish long term production they wouldn't commission a CPR. Therefore any reference to OP or Covid (this statement was 31 March, OP ca $26, lockdown regs 26 March) seems an excuse vs the above clear statement.
or was it that 'I'm taking what UKOG say as the truth' (seriously deluded perhaps, but no reason to contact UKOG), or was it:- 'HH Portland was 'robustly commercial' at 140bopd?'
So a bit more enhancement as to what 'exactly' should I be contacting UKOG about?
RNS 09/03/2020
Price 0.60ish
"Such water shut-off operations are routinely undertaken in production wells. However, success, particularly in horizontal wellbores and where water ingress is via open natural fractures, is by no means guaranteed. Consequently, this is an excellent result for the Company as it has enabled HH-2z to flow dry oil to surface at encouraging initial rates. Our operations team deserves tremendous credit for this successful outcome."
Billions of share dilution and SS wages later
RNS 30/06/2020
Price 0.27ish
The plug was initially successful in returning flow to the reported high oil cut, however water cut built up, necessitating the well to be produced intermittently as the water disposal costs outweighed oil revenues.
Penguins
I will repeat & enhance my question for you why do you not contact UKOG or there NOMAD if you believe there RNS'S are incorrect?
Names & numbers supplied on the RNS'S.
Wizard,
My concern is your post:- 'Now the transport permission is signed off it will be possible to put together cash flow projections base on production that can be exported which up to this point has not been able to take place.'
I'm taking what UKOG say as the truth - that there was nothing stopping them in terms of permission from producing oil and exporting it, and they were going to produce a CPR in the Autumn again because permissions would not prevent it. I also pointed out that cash flow projections will have assumptions - you are implying that UKOG are 'flying blind' with no cash flow forecasts because permission weren't fully in place.
Whilst covid and consequent OP drop has provided an excuse the reason a CPR wasn't produced was obviously the failure of HH-2z.
HH Portland was 'robustly commercial' at 140bopd? Surely if rates were well above that, and given the much lower predicted OPEX than September 2018, and that any CPR valuation will have an OP forecast not necessarily fixed on current prices , UKOG should produce a CPR if they expect a positive result.
'that HH-1 Portland is robustly commercial at even the lowest observed sustainable daily rate of 140 bopd and at oil prices below $60 per barrel.'
"Have you contacted UKOG with you concerns about there RNS's? "
Wizz - no-one ever gets an answer from UKOG - people call the number and they don't get put through, they never answer any letters nor (these days) give interviews
Even ANGS have a "Investors Q&A" every month
the last person who "communicated" with UKOG was The Fool .. and look how that turned out.....................
Penguins
If you are as concerned as you say.
Have you contacted UKOG with you concerns about there RNS's? instead of posting them here.
What you are effectively saying is they are not correct but as far as I remember at the time of the covid-19 lockdown or full year figures there was a statement covering that that the directors believed it was not in investors interests at the current time & dilution was the best policy.
I can only presume that the reason for this is the lower oil price relating to net present value.
"There is an obligation to acquire 3D seismic, will that be acquired before any further subsurface work?"
A3D would help locate future wells but it brings problems of its own.
Firstly it's probably more expensive than drilling another well - and once you have it you still have to drill another well. Secondly it take s a lot of time - by the time you get all the planning and permits, shoot it and then process it I'd bet it would take nearly 2 years.
thirdly it may not be much use - I believe they'd have to shoot right through Horley to get full coverage - and that isn;t going to happen
Would be nice won't hold my breath
Wizard,
Planning permission for HH-1 & HH-2z:- There shall be no more than a total of 20 HGV movements (10 in and 10 out) to or from the site in any one day
RNS Statement by UKOG following planning permission for HH development:-
'What Does the Consent Mean to UKOG and Horse Hill?
Critically, this consent means that the field's immediate oil production from HH-1 and HH-2/2z will no longer be limited to existing extended well test planning consents. The ability to produce over the field's economic lifespan also enables the transfer of current and future assigned recoverable resource volumes into the category of Reserves, which, by definition, conveys with more certainty that a known volume of petroleum can be produced commercially over a given time.
The commercial certainty associated with the allocation of Reserves at Horse Hill is therefore a critical step necessary to help facilitate the potential use of debt-based funding for field development and other Company working capital requirements. It is planned to commission a new Competent Persons Report to establish the Company's net Reserves following completion of HH-2z production testing in the Autumn.'
'Now the transport permission is signed off it will be possible to put together cash flow projections base on production that can be exported which up to this point has not been able to take place.'
A cash flow forecast is by it's very nature based on assumptions - UKOG could have put together a cash flow forecast at any time based on expected production and the above permissions. The value of UKOG is based on 2 things reserves and production.
They seem unwilling to get a CPR done which they were saying was planned for Autumn 2019 in above RNS (suggesting no 'permission' related issues with doing one) so no reserves for Horse Hill, and they haven't told the market what the sustained or even expectation of sustained production before the workover.
As for HH-2z they have had 4 months now to decide what to do with it. The choices were 'stimulation to return it into long-term production, sidetracking the well to a different subsurface location and possibly converting it into a future water re-injection well to implement pressure support and further reduce future operating costs',
The choice of new subsurface location for either production or injection will be difficult in a poorly constrained fractured reservoir, and I'm wondering what stimulation would improve the oil to water ratio. There is an obligation to acquire 3D seismic, will that be acquired before any further subsurface work?
Ocelot,
that's only a good trait if it doesn't end badly, eg BB. Not sure what is tenacious about testing intermittently over 18 months, more likely lack of certainty in the results requiring more information about the reservoir than was available - and then not deepening the HH-2 pilot to get more information.
One thing we do know about SS is that he doesn't give up easily, so let's see what he can achieve with HH-1 (and, later, HH-2z).
Will probably get a lot worse still buy the look of things
Cardinal3
Below is a link to a article. The case is against Surrey council who she is claiming should have taken into carbon & greenhouse gas emission's of the oil that will be used that during the planning decision & aims to have that planning decision declared unlawful.
I understand the High court refused to hear the case on 2 occasions but Sarah Finch was granted leave to the court of appeal & the case will be heard at the court of appeal on November 17 & 18 2020.
https://drillordrop.com/2020/10/26/minister-and-friends-of-the-earth-join-legal-challenge-over-horse-hill-oil-production/
George Roach of PREM won't be happy with the title of this thread.
Wizard
Legal challenge at the Court of Appeal? Who by? You can't appeal unless there has been a High Court hearing in the first place.
Mirasol, do you believe UKOG are withholding price sensitive information from thier shareholders regarding HH2?
Ibug
If the Surrey council permission is legally upheld.
Now the transport permission is signed off it will be possible to put together cash flow projections base on production that can be exported which up to this point has not been able to take place.
This will affect the value of UKOG.
Mirasol
The reality while I accept the current HH2 situation which I hope is temporary & will be resolved with taking the well in a new direction or whatever the solution is.
The points you seem to ignore is if there was no legal planning permission for 25 years or transport policy there would be no Horse Hill despite the reserves that are undoubtedly in the ground & UKOG have coming to surface.
wizard125
What permissions? The latest planning is for wells 3-6 plus the injector well. They are up to date with HH-1 and HH-2 Portland layer apart from an update on HH-2Z production.
Difficult too give an accurate CPR on the Kimmeridge with no core data. They have the test results.
" believe you only have a very small sighted view of the situation."
regretfully its one that goes back to early 2015................
You are wrong about the CPR - it can be released (well first they need to commission it of course... another news black hole) but they've done them before when they still had less than full permissions - it would just have a note saying one or two minor permits are required. They have never said that they have even commissioned a CPR so long-awaited means another 3 months minimum if they did that today.
We all know why they haven't done this - the results of HH2z are so worrying they will take a big hit - otherwise why go off to Turkey?
Sparticus1974
My understanding is that a CPR can not be released until all the permission's are in place.
The final conditions of the 25 year planning grant by Surrey council were signed off last week but there is a legal challenge at the court of appeal in November, challenging the legality of Surrey council's planning permission.
Hopefully this will be resolved in the not to distant future so the long awaited CPR can be released.
Wizard how long have we been waiting for for a CPR?
Mirasol
I tend not to agree & believe you only have a very small sighted view of the situation.
When a number of issues including the court of appeal review of the Horse Hill 25 year planning, Loxley planning & a increase in the oil price & a CPR will all help put a different perspective on the situation & show the lengths that SS & UKOG have gone to so far.
Once this is done it should provide a solid foundation for UKOG's growth & I believe as the difficult situations are resolved the strength of leadership & stability we have in SS & the board will become more apparent.
I understand your mixed emotions muddying the waters but a lot of work has been done but there is a bigger picture here.
"Probably when shareholders vote him out - if you were being paid £2k every day would you be in a hurry to leave that job?"
And I don't think he'll be in line for another job anytime soon...................