Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
Looks like UKOG must have had to stop all 'investing activities' with the exception of Portland planning.
Raising further cash is going to be 'challenging'
The only rabbit that can save extreme pain / likely death ; would be completing a Loxley farmout.
UKOG wants a free carry. No surprise there as the drill cost is £7m.
UKOG can not afford to contribute anything. If Loxley is farmed out , imo, it would excite enough to get another confetti shower away even if UKOG were only left with a 10% interest.
Been on the market a long time has Loxley and I just don't think its going to happen.
After all production costs UKOG made £275k profit on ALL the oil they produced in the WHOLE year; basically insignificant.
6 months on (actually nearer 7 now) maybe half that 275k to puff out the cash position. But its swings and roundabouts ;factor in nearer 7 months admin costs and oil profit boost has gone .
The clue that they are in a desperately poor cash state is in that January £0.75m placing was needed to fund basically just paper submissions in regard to the Portland ambitions and WORKING CAPITAL.
The other clue to UKOG struggling is the lack of any news as regards to remedial actions at HH aimed at improving production.
They can not afford to do anything; even paper planning seems a challenge now.
"Hang on ,they did a placing in January £750.000 and they had £1.9 million at the end of the financial year."
The accounts tells you the story as to why UKOG can be assumed to be running on fumes . The admin ALONE runs at circa £2.7m p.a.
Its been 6 months since UKOG had £1.9m at ye 30.09.23. (Actually £1.868m in cash to be exact)
So we can assume that circa £1.35 M has been burnt since . That would leave £0.55m if it not for £0.75 placing.
In theory UKOG might have a maximum of £1.3 m NOW.
But reading the 0.75 placing RNS points to the need to further finance the Portland ambition AND provide working capital.
Its obvious that UKOG's cash position must be well south of £1.3m NOW.
How long will that last?
I agree with Ilovesushi.
You just have to look at just how little disposable cash has coming in.
" UKOG's net share of Horndean production revenues was £297,000 for calendar year 2023, with net earnings after costs of £140,000."
Overall profit from oil production was £275k. It follows that the profit from HH production was only £135K.
It has to be a priority to improve HH performance by injecting, changing the downhole pump and descaling . Yet, the lack of activity suggests UKOG have run out of the cash.
Its patently obvious UKOG do not have the cash to pay their share of any new HH wells either.
I can not see how they can raise enough cash without authorisation to create a ridiculous number of new shares, BUT, would they be able to offload?. Looks like sourcing further death spiral financing may now be off the table.
UKOG base their 'going concern' on their previous successful history of equity based fund raises.
Its now a matter of how much cash UKOG has left and whether they can quickly get a miracle farm out of Loxley with a significant cash up front component. I do not see it happening.
Of course; price of oil surging to $400 a barrel would be enough to keep the lights on BUT that's pretty unlikely, imo.
Looks like the end is in sight, imo.
UKOG tweeted these both on 12th Feb ;
"UKOG
@UKOGlistedonAIM
·
12 Feb
HORSE HILL LATEST: UKOG planning a downhole pump changeout and scale removal programme to enhance oil production from HH-1. Further updates to follow.
UKOG
@UKOGlistedonAIM
·
12 Feb
HORSE HILL LATEST: UKOG considering a downhole pump changeout and scale removal programme to enhance oil production from HH-1. Further updates to follow."
I suspect that 'planning ' and 'considering' is about all they can afford/do at the moment as there has been no further tweet on the matter. How much would it likely cost?
Ummm , "The countdown to lift off begins …" Really.?
UKOG needs a lot of cash up front .
Sanderson better pull an amazing rabbit out of the hat PDQ.
The company is in DESPERATE need of cash. I suspect administration is getting pretty close now as this hugely loss making company, imo, no longer appears to be a going concern.
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 Türkiye instead, rather than on using new techniques at BB.
The Kimmeridge dream is dead.
Ocelot wrote "Balcombe is a promising horizontal well into the Kimmeridge so may have implications for UKOG."
Have Angus changed their tune since 2022?
Angus RNS dated 27th April 2022
"Update on Brockham Oil Field
The Company is pleased to announce that the Planning Committee of Surrey County Council today passed a resolution to approve the Company's plan to abandon the Kimmeridge layer and reperforate the Portland layer in well BRX4-Z subject only to a unilateral undertaking to secure a routing agreement on HGV movements.
Angus' existing Environment Agency permit requires minor variation to allow production from the Portland as opposed to the Kimmeridge in this well and the Company is in discussion with officers of the Agency in this regard. Following such variation the Company would proceed to reperforate at the earliest opportunity."
"..the Company's plan to abandon the Kimmeridge layer.."
No surprise after their 28th June 2019 RNS;
Extract;,
"it is extremely unlikely that commercial hydrocarbon flow can be established from the Kimmeridge layer at Brockham.."
I have reviewed the numbers and I see no way out for UKOG now.
The numbers are there for all to interpret themselves.
The company can not finance anything other than paper planning and keeping the lights on for a few months more.
PPP are no white knight and are cash poor.
Its now, imo, on a one way trip to administration I am afraid.
Ocelot wrote "any positive news from whatever source could see this share price shoot up."
From where? What? The next significant news will almost certainly reveal more dilution. That will not cause the share to 'shoot up'; more likely the complete opposite .
The numbers revealed in the results and the known costs of furthering any project clearly shows UKOG will struggle to fund anything significant.
Has UKOG the cash AND time to drill again in Türkiye?. UKOG's share of another 'roll of the dice' there is circa £1.2m. I do not see it happening; their finances are dire.
Indeed, a grave warning;
"Material uncertainty related to going concern
We draw attention to note 2b in the financial statements, which indicates that the group will require additional funding in the coming twelve months to meet their ongoing cash requirements. Whilst the directors anticipate that such funding may be obtained from a number of sources, there can be no certainty that such sources of funding are obtained in the timeframes necessary. As stated in note 2b, these events or conditions, along with the other matters as set forth in note 2b, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. "
My translation; Its going to be tough raising anymore cash and we could collapse into administration.
"It will not be long before there is more dilution. "
Of course; lets be frank; this company loses a FORTUNE every year. It can not go on without selling increasingly devalued shares.
UKOG explained this in their results RNS;
"The group's continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital or debt financing. The Directors are confident that adequate funding will be forthcoming with which to finance operations."
UKOG depends on persuading others to part with their cash to progress dream chases. UKOG needs to find £7 million to gamble drill Loxley to see if its commercially viable.
As for Hydrogen; UKOG ONLY needs $1 BILLION; its ludicrous .
Why would anyone want to partner a company that has a LONG history of inflating their pet projects prospects yet has a record FAILING again and again.
Ilovesushi wrote : "This hydrogen nonsense is never going to work as the company will never get enough funding away."
Yes; UKOG's latest get rich quick scheme is Hydrogen and its storage.
To call it get rich quick is a bit of an exaggeration. The company is a long way from even starting the 15 years of operational storage before the real decent profit on the investment kicks in.
Ukog states;
"In order to prepare and submit a bid for an allocation award, the round's timetable necessitates an acceleration of specific conceptual design, pre-FEED and environmental/ecology works during 2024. "
It means UKOG are throwing their VERY meagre cash resources on planning. Everyone knows how long that can take.
But here is the kicker ; "..the project's capital costs, currently estimated at c. £1 billion,...."
Yes ; 1,000 MILLION sterling
If, some how UKOG persuades others to invest this eyewatering sum one has to ask this question; Just what miniscule interest fraction of the projects will UKOG be left with?
Maybe in 20 years time UKOG will be able to show some very modest profit for their couple of thousandths share.
A long wait to retiring; not to the Bahamas , imo , but maybe Bognor Regis.
Can investors wait for this dream to come true ?
"When is this lot actually going to make some money?"
In all fairness UKOG's oil did produce a profit after production expenses; £275 k PROFIT from total revenue of £1.538m
If only there were not millions and millions of other costs , like inflated ceo salary and stupid overheads and crazy dream chases leading to giant overall losses every year.
Massive cash injections are required every year, look at the history .
Administrative expenses have increased from £2.63m to £3.32m
Revenue DOWN from £1.78 to £1.538 m
Retained loss for the year £4.069m
Yet these awful numbers justified a pay increase for Sandersons UP from £312k to £338k
and buried near the end of the report is this;
"The group's continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital or debt financing. The Directors are confident that adequate funding will be forthcoming with which to finance operations."
More share issues to come. Nothing changes
'Drill cost £7 million
Full field development £50 million'
in fairness I should point out that there has been way north of 10% inflation since these figures were given in oral evidence at the Loxley enquiry.
And, of course, the full field development cost would only be relevant IF the £7 m plus drill proves a robust commercial case.
It was also conceded at the planning enquiry that the optimistic possible volumes numbers were solely based on UKOG's own re-interpretation of the legacy data.
Any potential partner is going to pass a fairly sceptical eye over any numbers provided by UKOG..
"So they will need to raise some funds to pay for the cost of the drill. Does anyone know how much this is going to cost?"
Answer was provided in evidence given to the planning enquiry;
Drill cost £7 million
Full field development £50 million
"i suspect the two 0.5m tranches are no dead as ukog failed to meet the conditions of the agreement.
rf/ya must be mega****ed off following the 10% ebt voting move."
If so, it suggests that UKOG may not easily be able to use their services again and any fund raise will have to be by a HIGHLY discounted placing yet AGAIN.