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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.
I wonder if anyone will ask useful questions at the GM.
An important one would be , how much cash is UKOG sitting on now?
UKOG have already indicated that they need to raise cash for working capital "in the near future"
Perhaps a question about just how much capital UKOG are intending to raise would give shareholders an idea on how much dilution there is to come.
It should not really be left for someone at the meeting to ask and get such useful information ahead of the others.
UKOG need to issue an RNS properly outlining their current financial position by revealing the cash at hand balance and just how much they intend to raise. They need to outline where the cash will be spent; what the priorities are.
Its no good just stating the company needs to raise cash for "working capital obligations"
and then warning
"Failure to carry resolutions 3 and 5 will, therefore, mean that the Company will not be able to fully implement its operational and growth strategy."
There is a lack of frankness about what's to come; a VERY significant creation of new shares.
What are UKOG planning to do with the cash raised by dilution of the newly consolidated shares ( assuming they pass all resolutions)
That would be useful to know.
I VERY much doubt that its as Drill or Drop speculate; to Move Loxley forward towards a drill
UKOG previously announced they planned to farm out Loxley because of "uncertainties" and that there were better uses of UKOG's cash resources elsewhere.
IF there was any hint of a LOXLEY farmin UKOG would be trumpeting NOW. The absence of interest is obvious and not that surprising when just an appraisal to PROVE commerciality costs £7m ( UKOG's estimate).
All we know for certain is ; UKOG are up to their old games; planning to dilute shareholders equity again so they can roll a dice again; almost certainly in Türkiye, imo .
"..a fresh start with the Gas business."
As for Loxley; another dream for another day. Needs an appraisal drill to PROVE commerciality. Only costs £7m (UKOG cost estimate revealed at the planning enquiry).
Trouble is UKOG have not got the cash and need a partner, but who would want to partner UKOG?. IF another company was interested, imo UKOG would be left with an insignificant share.
The development costs would be large; UKOG revealed in the planning enquiry that IF successful , the full field development would cost £50m.
RNS 23.02.2024
Extract; " Failure to carry resolutions 3 and 5 will, therefore, mean that the Company will not be able to fully implement its operational and growth strategy."
I think they would no longer be a 'going concern' They MUST raise more cash through share issues; an awful of shares
I suspect the buyer of 121 million shares has not fully appreciated the impact the the fundraising to come . They are exposing themselves to two risks;
1 complete wipe out if the resolution fail and UKOG are advised to call in administrators
2 massive dilution by the creation of huge numbers of new shares thereafter to satisfy UKOG's working capital commitments.
UKOG have to get the accounts signed off and demonstrate they have funding for next 12 months.
UKOG need to raise a lot of cash.
With just Admin costs last reported at £2.7m p.a ; you can see an awful lot of dilution is to come.
Good grief talk about reckless gambling .
I am expecting those shares value to plumet