Firering Strategic Minerals: From explorer to producer. Watch the video here.
As I have said before; this Turkish adventure is riskier than many seem to think. AME have UKOG frontloading all the risk with 100% of the first wells costs.
Would cost AME next to nothing to cancel later drills if this first drill disappoints; UKOG themselves referred to the low penalties if further commitment drills are not completed. (see my earlier post)
If you go to AME's website and their English language 27.7.2020 AME press release regarding the deal you will read;
"..AME and UKOG will work together to develop the Resan exploration license, which covers an area of 30,548 hectares, located in Siirt province, which lies to the northwest of AME's Eruh discovery. UKOG will fund the first well on this license, expected to commence in Q4-2020, as well as a 2D seismic program.
Cem Sayer, AME's President, commented that he hopes to crown this co-operation with a discovery and referred to the following factors that contributed to UKOG's decision:...."
Note the words "Resan EXPLORATION license" AND how Cem Sayer said he "hopes to crown this co-operation with a DISCOVERY"
Now listen to Sanderson's description which uses the word "appraisal" and almost presents Resan as a slam dunk. https://www.youtube.com/watch?v=rEu4M3nCkWI
Its not. They have to establish commercial flows and volumes.
Sanderson has burnt his bridges ****ging off the value of the Weald. He had better get lucky with the Resan 'roll of the dice' which is how he previously described the Turkish adventure.
What (amongst other thing) activities has UKOG on going that would require "in the near future" funding?
What is going on at HH? Anyone seen a tanker recently ?
Does HH require more works or are UKOG simply running out of cash again "to keep the lights on".
Yes ; a future very extensive planned programme. But will it all happen? Remember this paragraph from the RNS announcing the Turkish drills;
"The Licence's 5 well commitment to the Turkish government has a gross monetary equivalent of $7.66 million (UKOG $3.83 million), however UKOG understands that should any of the commitment wells not be drilled, a modest penalty of c. $30-50,000 is payable to the government."
Lets go back to the £2.2m placing and what those funds would be used for;
"The Proceeds of the Placing will, therefore, be used primarily to support and fund UKOG's share of initial Turkish Licence operations costs, to include the purchase of long-lead drilling equipment, construction of a drilling pad and necessary preparations for seismic acquisition."
It was picked up by many at the time that UKOG's description of the funds purposes , using the word "initial"; was a clear indication more cash would be required to finish the first drill.
I am amazed he committed to a project without all the funds already in place.
"Re TW, doesn't say anything."
Not a lot , I agree ; lacks analysis other than to point out the obvious;
UKOG stated;
"In order to deliver the Company's stated strategy and growth objectives, it will require further funds in the near future for, amongst other things, its funding obligations under the agreed work programme for the Resan Licence and any of the new Application Blocks should they be awarded to the Company and its partner."
Apart from embarking on a drilling project without sufficient funds to complete the works; There's the "amongst other things"
UKOG have a pressing need for cash for other things;
What are those other things? TW makes an intelligent guess as UKOG are a little vague with their "amongst other things"
Good evening ocelot
"the timing looks to be excellent"
The timing appears to be an absolute necessity because UKOG were desperately short of cash to pay the bills.
TW has his say today;
https://www.*************.com/views/55847/uk-oil-gas-lyin-steve-warns-of-a-cash-crisis-but-is-this-a-ruse-to-save-his-wretched-skin
Not an placing but an open offer.
In order to deliver the Company's stated strategy and growth objectives, it will require further funds in the near future for, amongst other things, its funding obligations under the agreed work programme for the Resan Licence and any of the new Application Blocks should they be awarded to the Company and its partner.
Good evening Phimx;
Professor Smythe has been proved right
Smythe stated;
"this so-called discovery is clearly sub-economic. But UKOG is building a whole fantasy world around this one well."
and UKOG later confirmed it ; on Page 22 of the Loxley planning document dated 19th April 2019.
"Flow tests and pressure data from the Broadford Bridge and Horse Hill Wells Sites have been sub-commercial.."
Strange Sanderson has never publically conceded that ; outrageous they never RNS'd it
You can fully understand why Rodders was disappointed.
Its clear he was believing everything that Sanderson stated in this interview from December 2018;
https://www.youtube.com/watch?v=bLnqyjbokAg
Memorable quotes;
From about 2min 54 secs
"The target really at the end of the year (2019) is that we want to be producing about 2,000 barrels a day"
At 4min 4 secs " money does not seem to be a problem"
At 4min 22 sec "We are looking to drill over the next TWO years 9 wells"
He then listed the drills including a return to BB to drill a sidetrack.
None of the planed drills away from HH were started.
As for " money does not seem to be a problem"; look at the placing and borrowings record thereafter.
It seems money is always a problem for UKOG .
Good afternoon Ibug
I clicked on that link and I can understand why Rodders may be a bit disappointed.
He really believed the fund raises would end as in this post;
"Rodders74
RE: RE: Is MMs filling large order08 Mar 2019 16:17
Placing for 2020 early in 2019, dumbest idea I've ever heard... morons...
Fully funded for 2019... end of story.
Revenues from production to FUND 2020... end of
Now stfu!"
--------------------------------------------------
Placings subsequent;
27.3.19 £3.5m placing
7.8.19 £5.5m loan
2.12.19 £2m placing
28.4. 20 £1.275m placing
4.6.20 £ 4.2m placing
2.10.20 £2.2m placing
We could have been producing oil now if the FIG had agreed to Durrant's tax break proposal back in 2017;
"Premier Oil asks Falklands for tax break to develop field"
March 13 2017
https://www.thetimes.co.uk/article/premier-oil-ruffles-feathers-with-talk-of-falklands-field-tax-break-67ct6k3l2
Greed got the better of them . I really fear the FIG have not 'smelt the coffee' because FI oil development is in last chance saloon. IMO the present costs are not attractive enough to harbour.
Give a little or possibly lose everything. High risk stakes.
Good evening Bloobird ;
They used to publish it would be 3 and a half years. I suppose three years is possible if they had an incentive to get their skates on like a tax holiday, as I suggested.
If they opt for a smaller development it could reduce the timescale further, I suppose.
Good afternoon Skwizz
You made me look back at my history and how I have upset some;
The filter is there for those who find my comments objectionable. I am sure I am filtered by plenty; but does it matter?
If people only want to read from posters that riches are just around the corner , that retiring to the Bahamas is still on the cards and all is going so well with UKOG...fine.
Here is my response to one who tried to get my reasoned, evidenced, observations ignored.
RE: cyan2 21 Jun 2018 10:50
"I would urge others to block him/her if you are relatively new to trading
Clear agenda and that revolves around his own fortunes solely"
I am not invested here and do not believe in shorting.
Now , why would someone be keen to shut down reasoned discussions.?
Why would someone want to particularly influence those relatively new to trading?
I have been around the block a long time; I know YOUR game mister.
====================================================
and the share price was 1.325 pence at that time.
ummm
Always keen to be accurate and open ocelot ;
I am not speaking on behalf of shareholders.
If the word "shareholders" was changed to "everyone" would it make my observation more valid, more acceptable, less troubling?
I have previously declared my position over the years ; I think more than once.
Good afternoon ocelot
You wrote;
"Were UKOG overly conservative in determining the impairment against HH in the last accounts?"
Have UKOG a record of EVER talking down their worth?
We must refer back to how they calculated the HH impairment;
."The net present value utilised an internally generated depletion curve that was independently reviewed"
Why doesn't UKOG actually publish that depletion curve and give shareholders the full picture?
I note this reproduced paragraph;
"We are encouraged by UKOG's revised strategy for the exploitation of the Horse Hill Oil Field. Their confirmation of the connected oil in place volumes of 7-11 million barrels from the Portland oil pool alone highlights the untapped production that remains in the Portland, production that cannot hope to be fully realised from HH-1 alone."
'Oil in place' is one thing ; " recoverable " is what's really important;
This is what UKOG say is "likely technical recoverable";
"For guidance purposes only, the Company's qualified persons ("QP") consider that the 1C value of 0.6 mmbbl carried for Horse Hill in Table 3, below, provides a reasonably representative view of HH-1's likely technical recoverable Portland reserves at the end of 2020. "
600,000 barrels
UKOG did not try and claim that more drills would increase the recoverable.
You might be able to increase the flow rate with more wells ; but the recoverable number is what it is.
As for the Kimmeridge; you just have to refer back to the results and the estimated recoverable;
1C is 300,000 barrels to UKOG .( Source quoted; note 6 ;"RPS Jun 2019."). The 2c is 1.4million.
That's small.
Trouble is ; UKOG had previously declared ;
on Page 22 of the Loxley planning document dated 19th April 2019;
"Flow tests and pressure data from the Broadford Bridge and Horse Hill Wells Sites have been sub-commercial.."
As for the value of HHDL and the HH well; I think UKOG spelt it out clearly;
"The Directors have carried out an impairment review as at 30 September 2020. The Directors determined that the net present value of the HH-1 well was £4.78 million and therefore determined that HH-1 should be impaired by £9.35 million. The net present value utilised an internally generated depletion curve that was independently reviewed. "
So what is the correct value?
The bottom line is flow rates have been poor and I do not know when the last oil tanker was seen leaving.
If the prospects for HH recovering were good, Sanderson would be be prioritizing HH production and not rolling the
dice in Turkey.
Good morning Surfit
you wrote; "Hey Cyan, good to see you back and here. ADFN has descended into chaos."
Thanks. ADVFN has indeed gone down hill with repetitive nonsense.
No huge surprises from the results at first glance. Our fate is not in our hands . We have a bit of a wait if RKH management are right in their prediction;
" management's base case forecast assumes a final investment decision on the Sea Lion development during 2022, with the Group's costs funded by Premier/Harbour and/or Navitas during this period."
Good morning Pre2rcd
You wrote;
"10m USD at end of Q1. Thought it would be a lot worse than that"
At 31 December 2020, the Group had cash resources of US$11.7 million and $10.0 million as at the end of Q1 2021 (unaudited).
A slightly better cash position than previously expected.
You may like to view the Edison report dated 23rd April 2020 . It gave forecasts of RKH cash position which included a projection that RKH will have $10.224 m at YE 2020 and only $5.346 m USD cash left at YE 2021.
My favourite idea to get things moving is for the FIG to offer a tax holiday; All oil produced before 2028 will be entirely tax free; what an incentive to encourage early, fast development. One can but dream lol.