The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
So.
Flowed possibly up to about 400bbls from HH-1 Portland. Stable rate 293bopd for 24 hours (where's the 362bopd?). Although was the 435bopd an initial rate of the 6 hour test or an average over the whole 6 hours?
Another intervention of HH-1 underway to improve Portland flow rate.
Interference test confirms both can be produced from the Portland without detriment to either (after producing 400bopd from HH-1 after 6 months shut in). Interesting that a sweet spot layer can have a barrier/baffle between 2 wells that are not far apart - not what was originally expected as they shut in HH-1 specifically to avoid 'detriment'.
HH-2z routine intervention will commence February with a production logging tool obtained to establish where the water ingress is.
HH-1 will be initially produced from Portland under FDP enabling oil sales to be declared as income (a bit of accounts juggling) - needs generator/s installed and other surface equipment.
Apparently this is 6 months ahead of schedule, though in October this was in the sim-ops RNS:-
'Following a planned extensive HH-2z production flow-testing campaign, both HH-2z Portland and the HH-1 Kimmeridge well are expected to be put into long term production by the end of 2019.'
Plans to produce both Kimmeridge and Portland from HH-1, plans for Kimmeridge appraisal/production well.
Permission to issue more shares for Tellurian and for FDP (is this money to fund the works required again for site upgrades) at the AGM. Though there's still £3.35mm of shares to issue to Tellurian though loan balance reduction RNS probably incoming.
HH-2z ewt will commence following routine intervention which will be performed once they know what's needed to be done
HH-2z Portland production under FDP will start Q3. Further possible infill and injector wells.
So still jam tomorrow - and unclear when a CPR will be started - but if everything works out as hoped then it will be good. Let's see what happens with share issuing and the interventions.
Penguins
You state "Flowed possibly up to about 400bbls from HH-1 Portland . . . .Stable rate 293bopd for 24 hours (where's the 362bopd?). Although was the 435bopd an initial rate of the 6 hour test or an average over the whole 6 hours?"
I dont know where you get your possibly up to 400bbs from nor how you can think 435bopd is the initial rate of the 6 hours test and not for the 6 hours test the RNS clearly states "at an initial rate of 435 barrels of oil per day ("bopd") over a 6-hour period."
Also you refer to the previous 362bopd this was an initial rate so 435 is a significant improvement. It cannot be compared to the newly RNS stable rate of 293bopd which again is the highest stable rate recorded.
I’m sure like many when I read “February” I was thinking April but it looks like for once the RNS downplayed progress by the looks of the kit arriving on site. Remember some water is normal in producing oil fields. The separator was bought in for a reason. The water injection well has Always been in the plans. Just a case of minimising and if the majority is coming on via a fracture at the toe end should be a relatively easy fix. Not long for 1000bopd + from HH.
UKOG Have a market capital around £50mln today.
With HH-1 going into production with 300-500 bopd
And HH-2z producing North of 600 bopd in the next couple of weeks, Horse Hill will be producing North of 1000bopd.
That's £40mln plus per year.
How much do we value a company with £40mln revenue and a plan and resources to scale that up dramatically over the coming year?
This is quite a bargain at this price.
GLA
yes free, one month production and there is your one mill paid off.easy-peesy.gla
"That's £40mln plus per year."
@FreeMoney You can't do math. £ 45 * 365 * 1000 = 16m.
Never mind your optimistic figures, you have totally ignore the most important factor, natural production decline.
I doubt this field will ever be profitable, there is a reason all these companies have sold their stake. The cost of getting a well into the ground is just too high. Look at how much has been spent to date, look at the high admin overheads. Nice little earner for the ukog team. Good luck any shareholders expecting a return via dividends.
Would be a good user name for a paid ramper.
After a successful water ingress remedy in new oil wells it is usual to have quite substantial increases in oil flow as the water can substantially restrict oil entering and flowing in the oil well bore. So around 1,000bopd or more from HH2 could still be very likely.
And yet the water is supposedly at the toe which probably has the least affect. You'll have to do better than that Argus to BS the PI's.
Perhaps you would like to supply some examples of these increases so we can all make up our own minds of the validity of what you suggest.
Thorpedo, an increase in the initial rate of over 70bopd to 435bopd from 362bopd is an excellent sign. Those making up and trying to exaggerate depletion rates must be taken aback by this RNS information contradicting their incorrect assumptions.
Why so much focus on initial rates, which are well known in the industry as BS that can be gamed.
Why so little focus on decline rates?
The RNS information clearly shows there has been an increase in initial flow rates of over 20%. Quite a significant increase. The facts bode very well for long term oil production and a much lower depletion rate than some were trying to imply with made up assumptions and wild guesses.
@argus1 Total BS. initial flow rates have nothing to do with decline rates. As I said initial flow rates are well known to be BS that can be gamed. Just change the choke, or let the pressure build up etc.
Why is there so little focus on decline rates on this board.
hex314, The figures we have are the facts we have. Your assumptions are therefore the only BS there could be. Thanks for clearing that up.
Ibug, as much as you hate facts that destroy your trolling agenda, it is easy to Google for the information which can be found on many websites. Even buffoons can normally manage it. Why not give it a go, or afraid it will destroy another deramping ploy for you.
Argus
Here is one of many examples "The water control job increased oil production and decreased water cut successfully without any operational problems."
All I was doing was pointing out is that you are a complete BS merchant who can never back up what he preaches. It was a good guess by you but yet again you could not provide a link to your claim.
Everything you say needs to be taken with a pinch of salt imo.
FYI the Portland was kept at a steady 200 bopd in HH1 during the EWT. imo that was for a reason. I don't expect them to change that during production but they are unlikely to give out production figures in RNS's if they have any sense.
"As I said initial flow rates are well known to be BS that can be gamed. Just change the choke, or let the pressure build up etc.
Why is there so little focus on decline rates on this board."
Absolutely and one of the worst examples was just down the road with Angus at Brockham - high rates for a micro second fueled rampers like DHC for months until the truth came out. IIRC HH1 had rates of up to 1365 bopd from the Kimm test in 2016 - but that has slipped well down the list recently...................... also 323 from the Portland at the time
Hex
The maximum amount it has flowed has a decline rate by MINUS 73 from 362 to 435.
Also the maximum sustained rate has a negative decline (aka increased) to 298.
Should have read 220
11 June 2019 Horse Hill-1 continues to produce Portland oil at a stable rate of over 220 barrels of oil per day ("bopd") via a modest pressure draw down.
17 May 2019 The Portland continues to produce at a stable rate of over 220 barrels of dry oil per day ("bopd") at a modest reservoir pressure draw-down.
11 April 2019 dry oil production from the Portland reservoir at the Horse Hill oil field has continued at a stable rate of over 220 barrels of oil per day ("bopd")
15 March 2019 The continuous Portland dry oil flow (i.e. oil with zero water content), at a stable daily average rate of over 220 barrels per day ("bopd")
18 February 2019 Horse Hill Developments Ltd has re-established Portland oil production from the Horse Hill-1 ("HH-1") well. The resumption of continuous Portland dry oil flow (i.e. oil with zero water content), at a stable daily rate of between 208 to 218 barrels per day ("bopd"),
If all goes well for our routine intervention, will we still require a rig?
"Why is there so little focus on decline rates on this board"
Several reasons - firstly companies very rarely announce decline rates - they can be found in CPR's if they publish the whole document (which is rare TBH). Secondly you actually need quite a bit of stable production to be able to draw a decent line through the data - an EWT when you are switching horizons, chokes, pump rates etc isn't a great place to start.
But they do say "modest drawdown" in their latest RNS - I guess that at 200-230 bopd they were seeing very little decline - now they're upping the rates it's starting to show - which is what you'd expect
PCS - Reservoir engineering is all about balancing production rates against pressure behavior - long term maximization of recoverable volumes requires careful management of pressures - hence the need for water or gas injection in many fields.
HH has beaten many forecasts so far - no water seen for a long time, steady rates and (apparently) little pressure decline. If they up the rates without reinjection they will expect , and plan for, greater pressure declines. No doubt this is an issue addressed in the revised FDP submission to the OGA - who are very hot on maximising long term number
@Steptoes
"Early expectations were for 3 horizontals to drain the Portland, i.e. to recover maybe 10m barrels. "
Where do you get that from? The CPR page 42 suggests 2C of 1.4million barrels of oil from Portland total.
https://www.ukogplc.com/ul/UKOG%202018%20CPR%20060618.pdf
10million is a lot more than 1.4.
The CPR report has a lot of clauses saying they where using optimistic assumptions.
"Although no water was produced during the well test, it is foreseen that water will break through at some pointand ultimate recovery per well could likely be a function of the amount of produced water. No water production profiles have been determined as part of this report"
Please provide links to such presentations and SS interviews. Or are you making stuff up?
Just like with cloudtag my only agenda is the truth.
Post your evidence. If you care about the truth.
Ibug, as usual full of BS. I was right as I had already looked it up some time ago when I posted about the various water ingress solutions in horizontal wells after trolls were pretending there was no such remedies. That put paid to the many deramping trolls posts on that ploy. You have followed my suggestion and now know it was you who was full of deramping BS, as I had only posted some facts that anyone without a deramping agenda could easily have found. No ?duck required on my part.