Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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.
We have a military presence which has never depended on the FIG to fund.
I really do not see the Falklands of significant strategic importance.
Whether oil is ever commercially progressed depends simply on the economic case; whether the numbers work.
The only reason for Harbour to take out RKH is if they are definitely going ahead. looking at the timescales; it appears that the award will come well before any development decision.
I think Harbour will want to renegotiate terms with the FIG and knock at least $5 off the $9 royalty.
The RKH capital tax bill will have to be part of the discussions. The CGT would drop away IF the existing Navitas deal is progressed and agreed by the FIG.
I think Navitas will drop out of the picture IF harbour really wants to progress SL.
Navitas was, effectively, only offering circa $250 m of development capital and loan support for 30% of SL which cost $1.1 Billion to appraise; effectively they got a pass on $300m of appraisal costs.
IF harbour take out RKH it will be for paper , imo, not cash , and after a sizable OM award.
Best case could see $200m (OM award cash) then available to replace the Navitas contribution.
Good afternoon Ibug
You wrote
"SNR had a share of the Resan/Basur licence back in 2016 but sold their share to AME after the first 5 wells at East Sadak had been drilled."
Why would they do that if the Resan prospect was that good? As I have posted before; if Resan was so good ; AME would go it alone and reap all the rewards for themselves.
There does need to be radical changes as to how SEALION may be financed. Its clear we can rule out government support which Durrant relied on from UKEF; the rules have changed.
hTTps://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/975753/Guidance_-_Aligning_UK_international_support_for_the_clean_energy_transition_-_March_2021_.pdf
Cost savings need to be made and new ways to finance. I very much doubt that Navitas will remain in the mix IF harbour wants to proceed.
The smart move by Harbour would also be to take RKH out after the OM award is made. Its just possible RKH might have a useful cash pile to add to the development financing needs.
Remains all very high risk here at least until the award comes through, imo.
Hi again ocelot;
"Any future oil production is therefore expected to be economically robust ..." "... at current $40/bbl oil prices ...".
No doubt that Turkish costs are lower and hence AME seem to be able to produce micro amounts economically as in "Karakilise-1 Well, in Current daily net oil production is ~20 bbls/day " as reported in the 2017 link Ibug posted;
hTTps://hobbydocbox.com/Investors_and_Patents/70054084-Contents-message-from-the-president.html
It remains a mystery to me as to why AME did not go it alone with such a supposedly promising 'missed pay' play or why AME's usual partners did not invest.
We will just have to wait and see what Resan can produce.
Good morning Ocelot
At least YOU tried to post positively on UKOG
"Any future oil production is therefore expected to be economically robust ..."
If only half of what UKOG " expected " had come to pass; shareholders would now be far better off.
What's come to be 'expected' from UKOG is just one disappointment after another; missed targets; poor well performances and massive share dilutions.
TrollHunter2 ignored my polite request for positive links on UKOG and instead this morning posts on another thread. Here is an extract;
" With oil rising over $70pb the margin in Turkey and potential production certainly justifies a 20p target price."
Really?. There are about 13 billion shares presently in issue with UKOG and the number is likely to rise (why does Sanderson want the permission to issue 3 BILLION more shares?).
13 billion times 20p would give UKOG a market cap of £2,600 Million ; £2.6 BILLION.
Compare to regional player GENL ; market cap circa £427 million producing 33,000 plus barrels per day.
TrollHunter2 thinks SIX times Genels value is possible ? Oh dear .
I think TH2 needs to present the numbers ; a reasoned case , to justify such a dream value.
Good afternoon BlooBird
I am thinking "jaws" now lol. "I think we're going to need a bigger boat"
I suppose there is no particular reason why we couldn't run two IF FPSO's if the prices were right.
We are not privy to the smaller plans which PMO staff are/have prepared to submit to Harbour. I believe we WERE expecting to produce about 80,000 a day under the old plans so a 30,000 facility is clearly short. Just how much smaller is possibly being considered?
Goodness knows what the conversations are behind closed doors . Our immediate concern is getting a large OM award in the accounts; if we are lucky and have won the case.
UKOG do not RNS material information as they should and it would be nice to know the determined COS for RESAN.
The big issue I have with UKOG is how shareholders have been left in the dark when there were problems ; numerous examples which includes keeping quiet about BB issues and that sidetrack.
One of the most outrageous was the failure to RNS the companies determination that BOTH BB and Horse hill Kimmeridge were sub-commercial.
It should not have been left for someone to discover 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.."
That was a hugely significant ; certainly a market effecting determination. Its an outrage UKOG never RNS'd it.
Yet; this outfit deems it fit to issue an absolutely useless RNS about joining a Geothermal association; something they had announced a couple of weeks before in the annual results; ridiculous.
UKOG are not as open as they should be when there are issues; and that's putting it mildly!
Good afternoon Penguins
You wrote "not everything is out in the open.."
Fair point; but isn't it true directors will always know far more than ordinary shareholders do from RNS's?
I think its a matter of how material and its likely market effect; the impact on the share price.
I suppose if a fund raise is going on in the background; that would be very material and prohibit trading.
Getting back to events in 2018. This is an extract of a post I wrote on ADVFN at the time on the blocked exercise of options;
"Why was it blocked?
"to ensure the continued alignment of the interests of shareholders and the option holders and considering the liquidity of the Company's shares it would be beneficial to extend these options"
LIQUIDITY would be affected IF THE SHARES WERE GOING TO BE SOLD straight away.
You have to ask the question; why would a director be keen to sell NOW?
If the director thought that the SP was going North to 3p ; say after HH EWT;
he would want to HOLD his 0.4p shares NOT SELL them for 1.5p NOW.
That RNS is a red flag imo"
Sanderson wanted to exercise options in 2018 and sell straight away but was persuaded/blocked by other directors.
I think the share price was about 1.5p at the time. Sanderson would have made a healthy profit.
hTTps://uk.advfn.com/stock-market/london/uk-oil-gas-UKOG/share-news/UK-Oil-Gas-Investments-PLC-Exercise-Grant-Ame/77182010
I can not see any reason why Sanderson could not buy shares now. Everything is out in the open; can't be a closed period ahead of the drill result.
Further to the information that there's possible consideration of re-using an existing FPSO to save costs; I had a quick look about and noted this bargain sale that completed for just $40m; https://www.oedigital.com/news/470449-bumi-armada-sells-fpso-for-40-mln.
FPSO's are hugely expensive . I wonder if , as another suggested ; HUR's AokaMizu FPSO will be available in 3 or 4 years' or even less?
Good evening HH1AN2
Go to this link.
hTTps://drillordrop.com/2021/04/28/horse-hill-scales-back-oil-storage/
Click on highlighted "letter" in text. It will direct you to UKOG's communication with SCC.
Go to page 13 for maximum traffic and volumes.
I read the comments that the Kimmeridge is not dead because of the mooted HH4 which Sanderson seems is in no hurry to complete.
The evidence that the Kimmeridge is unlikely to be of serious value anymore to UKOG can be found in the amended HH development plan submitted to the authorities on 1st April 2021.
Firstly; there is a maximum daily tanker count of TWO. That means a THEORETICAL maximum of circa 440 barrels a day being exported. That's a long way from Sanderson's planned 2,000 barrels per day planned for year end 2019.
This takes us neatly to the second critical piece of evidence from the amended plans; the on site storage; much reduced to just 49 tonnes.
Because we know that tanker traffic is restricted at the weekends and that production is 24/7 ;it can be extrapolated that UKOG are actually not expecting much over 200 barrels a day at weekends and hence every other day of the week.
There will be a depletion curve which will show barely commercial volumes in the years towards the end of the planned 20 years of production.
Third piece of evidence can be found in the asset impairment that used an "utilised an internally generated depletion curve"
Note this paragraph from the results;
"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. "
That's a huge impairment.
In 2018 UKOG bought out others interests paying £300,000 per 1% of HHDL ;therefor then valuing the whole at £30m.
Fourth piece of evidence is to be found in the 16th April 2021 results RNS .
You will find tables with the estimated volumes in UKOG's portfolio from which we know that The Portland 1C is 600,000 barrels and that is what UKOG now believes is the 'likely technically recoverable'.
The shocker is the Kimmeridge; 1C is 300,000 barrels to UKOG .( Source quoted; note 6 ;"RPS Jun 2019.").
The 2c is 1.4million.
Is that really worth throwing more money at after your previous pressure and flow data proved sub-commercial.?
Remember how Sanderson highlighted the higher UK drilling costs in this presentation;
youtube.com/watch?v=rEu4M3nCkWI . He does NOT mention the Kimmeridge.
From all the above numbers and plans published by UKOG ,one can reasonably assume that any future value contribution from the Kimmeridge is likely negligible at best.
One can understand why Sanderson is less than keen on progressing HH4 and has priorities elsewhere.
So its off to Resan where UKOG "- need to establish commercial rates and volumes" (see the slide in the presentation)
UKOG have a history of stating things that never came to pass. HH was supposed to be producing 2,000 barrels a day by YE 2019.
If HH remains such a wonderful asset; why aren't the HH3 and HH4 wells being drilled as a priority; will they ever be drilled.?
Sanderson explained the reason why the company is in Turkey;
"to get the step change in value UKOG seeks we need projects that are each worth hundreds of millions in value; not tens. So , because the UK on shore does not have this size of new opportunity ; that's where SE Turkey comes in"
Sanderson could not be clearer; the rewards that The weald offers are now considered puny.
The Kimmeridge is a busted flush.
He never mentioned "The Kimmeridge" once.
People can hear Sandersons words themselves;
youtube.com/watch?v=rEu4M3nCkWI
Geothermal at BB ..really? Is that an ideal location? How much money is there in geothermal.
From selling dreams of shareholders being able to retire to the Bahamas , its come to hot water?
If Sanderson considered there was any value in further Kimmeridge drilling he would be revisiting Broadford Bridge as a priority and not rolling the dice in Resan .
You just have to view this presentation where he comprehensively trashes the value of the Weald;
youtube.com/watch?v=rEu4M3nCkWI
No mention of the Kimmeridge.
Its clear that Sanderson has written off The Kimmeridge
The Kimmeridge dream died in 2019
Angus RNS 29.6.19
hTTps://uk.advfn.com/stock-market/london/angus-energy-ANGS/share-news/Angus-Energy-PLC-Brockham-Well-Test-Results-and-Ba/80229826
"... following analysis of the results, it is the view of the Company that, on any conventional approach, it is extremely unlikely that commercial hydrocarbon flow can be established from the Kimmeridge layer at Brockham."
"extremely unlikely"