Member Info for cyan2

We are a long way from any sanction. To stand any chance we need the FIG to 'get real' and recognise that ANY FI's oil development is in peril.
If they remain intransigent on tax breaks ; as they were in 2017; I see the end of the dream.

If; the big IF we get to sanction; I note this paragraph from our annual results;

"A decision was made, in line with the operator, to write off historic exploration costs associated with the resources which will not be developed as part of the Sea Lion Phase 1 project. This impairment has no impact on the Group's long-term strategy for multiple phases of development in the North Falkland Basin but instead reflects the limited capital which will be invested outside of the Phase 1 project in the near-term. A reversal of the impairment is expected once the Phase 1 project has been sanctioned and investment resumes on the Phase 2 project."

ummm That would be a dream scenario; phase 1 sanctioned and phase 2 realistically back as possibility.

The only logical conclusion as to raising the authority to issue shares is that either UKOG expect a very much lower share price or they see a need for even more cash; maybe a bit of both.

The good news is this will not be the last chance to buy golden tickets in fundraises; UKOG spell it out ;

"Should the open offer be successful on a cost benefit basis the Company will make available to the Shareholders an opportunity to participate in all future fundraisings.."

https://www.ukogplc.com/ul/UKOG%20GM%20Notice%20210521.pdf

No if's, but's or maybe's ;there will be further cash calls

Good evening ocelot.
True; we could argue all day BUT there are clues as to the direction of travel

1 The rejected resolution 6 was for 3 billion shares
2 The new resolutions have a much much higher limit
3 Its not just Turkey that has to be funded. The GM notice clearly stated "amongst other things" that needed cash too; like works to cover the injector works at HH etc.

If the resolutions are not passed and the cash raised; Turkey and HH operations will in "the near future "run out of working capital and grind to a halt

Need £5 million for turkey so that’s over 2 billion more shares

Don't think that he'll get them away anywhere near .25p

Could be 0.1p that'll be 5 billion shares for 5 million sterling; but will that be nearly enough?

As for Sanderson Videos ; this is THE one really brings home the BS and shattered dreams. Four years later after reassuring that UKOG definitely had enough money the begging bowl is out again.

https://youtu.be/V1_stpqkU7w

TH2 wrote;
" they are still producing five years later and plan to continue and indeed increase over the next 20 years!"

The only present decent , so far profitable producer, is Horndean. THIRTEEN barrels there does not amount to much though.

With the 20 year reference TH2 is referring to HH only.

Its not true that PRESENT production will increase over the 20 years production life of HH.

UKOG had to dramatically impair the value of HH after an independently reviewed depletion curve. Production will fall away; pretty dramatically and be very low in the latter years of the 20 year production.

Also remember that the estimated PORTLAND recoverable is 600,000 barrels. The Kimmeridge 1C to UKOG was published as 300,000 barrels. Very small numbers.

TH" wrote; "Horse Hill PRODUCTION continuing with current setup creating revenue.."

Its oil flowing profitably that counts. The accounts showed that the interventions and expensive waste water disposal costs; meant they LOST money last year on the production.
UKOG are now throwing money into converting what WAS supposed to be a producing well into an injector. We will have to wait and see how that will impact the production and income.

Resolution 6 at the AGM was withdrawn because it was not 'passed'
Resolution 6 was the often repeated plan to create shares and place them EXCLUDING shareholder participation.

It obviously did not have support and one can reasonably infer that that further dilution had been rejected; not that those voting against wanted an open offer to participate in.
Is that a more logical inference of resolution 6 failure?

UKOG had not previously allowed shareholders an opportunity to partake.
It was because the rejection of resolution 6 left UKOG in a financial crisis that the GM has been planned in a hurry with an open offer element.
The notice has a grave warning regarding failure to pass the resolutions.

Good afternoon Ibug
you wrote;
"It is 13 days since the concrete was poured and started to set.
We have not seen any evidence of them setting up the equipment."

UKOG warned;

"In order to deliver the Company’s stated strategy and growth objectives, it will require further funds in the near future .."

'near future' is vague.
Are AME awaiting confirmation of UKOG's financial position; are they awaiting a cash payment before further activity?

Good morning longtermthinker

HBR took over PMO with an eye to their eye watering UK tax losses.
You wrote "However Linda also mentioned having another producing hub, somewhere in the world like the North Sea"
Do they buyout established/old NS assets or even look at JOG's hub plans.?

I see on ADVFN someone talking about rumours of a takeover of RKH now. Makes no sense at all without at least knowing the OM result.
If HBR eventually decides to proceed with SL development ; I can then see THEM take out RKH in a paper offer.

In previous presentations RKH had SL breakeven as $40.

I note this line in our results;

"Rockhopper's Board remain confident the Sea Lion project benefits from robust economics (at $65/bbl Brent - NPV10@FID $1.8bn; break-even $42/bbl"

$42 is too high.

The FIG must move on taxation . There either needs to be a tax holiday or a large cut in the $9 royalty

Hi again HH1AN2

Is 4/5 million going to be being enough?. Don't the resolutions hint at rather more being raised?
Not sure I am with you regarding UJO consolidation. Do you think UKOG will do that? Even if UKOG consolidates; it does not change the market cap; its effect would be neutral.

Good morning ocelot.

There are things we do not know , for sure.
However ; from what UKOG published they signal even more fundraises in the future; they do not write 'may be' or 'if necessary' here;

"Should the open offer be successful on a cost benefit basis the Company will make available to the Shareholders an opportunity to participate in all future fundraisings either: (i) by way of an open offer on a pre-emptive basis; or (ii) through a mechanism that allows shareholders participate in fundraising on a more general basis.

Please note that if the Resolutions fail, the Company’s ability to raise further working capital may be impacted."

The last line was in bold type and a grave warning.

Good evening Exploration.

Thanks for your input

It does appear Sanderson does rather big up prospects. He certainly presents Resan almost as a slam dunk but even his presentation has the proviso "need to establish commercial rates and volumes"
From what little I have established from AME's producing assets; the daily production numbers are not exactly Earth shattering even with multiple wells .
Yes; most likely the partners will find some oil; but will it be significant, is there significant value to be had.?
I have asked this before; why didn't AME's usual partners want to invest if this was a decent risked drill?
Just have to wait and see.
In the meantime UKOG have funding issues to sort. Without further cash injection UKOG are not a going concern, imo; they can not pay their way and honour their obligations.

Appraisal or exploration?

A previous LSE member posted this link sometime ago;

hTTps://www.enerjigunlugu.net/aladdin-middle-east-siirtte-petrol-arayacak-42545h.htm

"Aladdin Middle East will search for oil in Siirt America-based Aladdin Middle East will drill a BaÅŸur-3 exploration well in Siirt and search for oil. Source: Aladdin Middle East to search for oil in Siirt"

"Energy Diary - American-based Aladdin Middle East will drill a BaÅŸur-3 exploration well in Siirt to search for oil. Aladdin Middle East Ltd. Åžti. Oil exploration work is planned in BaÅŸur-3 location area, which is in AR / AME / K / M47-b1, b2 exploration license in Central district of Siirt province. Within the scope of the project worth 6 million liras, the company will drill BaÅŸur-3 detection wells in approximately 360 thousand square meters of pastureland and search for oil. Since the activity is a detection drilling activity, there will be no production within the scope of the activity. Source: Aladdin Middle East to search for oil in Siirt"

"search for oil"
"exploration well"
"Since the activity is a detection drilling activity, there will be no production within the scope of the activity."

From that its clear to me this is in reality exploration and any production from a possible commercial find will not be that quick.

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