RE: Alba have valued 5% of HH at £4m20 May 2021 12:04
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.
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