Member Info for cyan2

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

I have erred on the optimistic side a bit too much NibblePibbley

I need to correct an earlier post of mine where I listed the incredible number of fundraises since 2017. Its a little worse than I previously stated as I missed out that last 750k placing.

Here are just the last three raises which its worth highlighting the damage discount placings have on the shares value;

12.9.22 £3m Placing

RNS extract "... at a price of 0.0875 pence per share (the "Placing Price").

"The Placing Price represents a discount of approximately 20.3 per cent to the Closing Price of 0.1098 pence per Ordinary Share on 9 September 2022"

28.06.2023 £3m loan

12.01.2024 0.75m placing

" The Placing Price represents a discount of 20 per cent to the Closing Price of 0.0250 pence per Ordinary Share on 11 January 2024"

So I now make that £61,137,554 since 2017

Just look at how the share has slumped since the placings

Lets say its 7 years; so that's an average of £8.7 million having to be injected every year.

The company loses several million every year; its hopeless imo

Consolidation alone will not impact a shareholders £70 worth of shares. If no new shares were to be issued its possible he could still get £70 back (IF there were no dealing costs ,,lol)

But we know UKOG is in desperate need of more cash

Its the creation of new shares thereafter that will dilute and reduce the value of that £70 shareholding to, in my possible scenario; maybe circa £24.

"...the effect on the market cap should be zero."

The great pain will come when UKOG has to issue a massive number of new shares just to remain a going concern.

Not sure that some have fully understood what's coming. How many shares will be issued by a company with a market cap now of circa £2 MILLION to raise, maybe £4 MILLION?

I have previously tried to spell this out. It will be devastating .

Sorry technical hitch. Repeating myself; a sign of old age lol

I think there are some who believe that if UKOG is successful in a fund raise then the share price would rise, probably on relief that administration has been dodged for the time being.

I posted an example before; a £4m fundraise which might be sufficient to provide annual admin costs of circa £3m and provide for another "roll of the dice" (Sandersons words") , a single Turkish drill.

I demonstrated that the fund raise in my specific example might see the number of shares grow ; from 33billion to circa 113 billion.

It follows that an existing shareholder would need the share to dramatically increase for their existing equity to have their present sale potential return.

If you have Y shares at say 0.0062 p and UKOG increases the share number; say 3 fold to 3Y; your shares VALUE has been cut ; they will yield one third of what they could have before the new dilution.

£100 worth of shares TODAY might be worth £33 after a confetti based fund raise.

The rampers will say that after UKOG is funded the share price will rise.

My argument is ; just to stand still; UKOG's share price may have to multiply by 3 just for your investment value to just stand still at todays value.

Why would anyone want to buy this share?

I think there are some who believe that if UKOG is successful in a fund raise then the share price would rise, probably on relief that administration has been dodged for the time being.

I posted an example before; a £4m fundraise which might be sufficient to provide annual admin costs of circa £3m and provide for another "roll of the dice" (Sandersons words") , a single Turkish drill.

I demonstrated that the fund raise in my specific example might see the number of shares grow ; from 33billion to circa 113 billion.

It follows that an existing shareholder would need the share to dramtically increase for their existing equity to have their present sale potential return.

If you have Y shares at say 0.0062 p and UKOG increases the share number; say 3 fold to 3Y; your shares VALUE has been cut ; they will yield one third of what they could have before the new dilution.

£100 worth of shares TODAY might be worth £33 after a confetti based fund raise.

The rampers will say that after UKOG is refunded the share price will rise.

My argument is ; just to stand still; UKOG's share price may have to multiply by 3 just for your investment value to just stand still at todays value.

Why would anyone want to buy this share?

I can not understand the logic behind anyone buying UKOG's shares NOW.

Why risk that the resolutions are NOT passed and it follows that UKOG is no longer a going concern and they have to call in administrators?

Why risk losing everything?

Why not wait until the company can raise desperately needed funds by the creation of enormous numbers of new shares.?

I actually think UKOG fixed the votes in favour by the 3 billion issue to trustees so the risk may not be great; but until the votes are counted a grave risk remains.

I based my calculations from the 22nd feb 2024 RNS numbers;

"Admission is expected to take place at 8.00 a.m. on or around 27 February 2024."

"Following Admission, the total voting rights in the Company will be 32,539,926,104 ordinary shares and Shareholders may use this figure as the denominator by which they are required to notify their interest in, or change to their interest in, the Company under the FCA's Disclosure, Guidance and Transparency Rules."

I earlier posted that I thought £1m STERLING would be well enough for another Turkish drill. On reflection I think I was a little bit too optimistic;

"AME's cost estimates for a 1500 m depth well in the Licence are around $3 million gross."

"To earn its 50% interest in the Licence, the Company has agreed to fund 100% of the first of 5 commitment wells in the Licence's 5-year exploration term, together with a small 2D seismic survey with an expected cost of $1-$1.5 million. UKOG's net expenditure for the one well plus seismic programme is capped at USD$5 million maximum expenditure. Thereafter, the Company will fund its 50% interest share expected to be c. $1.5 million per well."

At todays exchange rate UKOG's share maybe ; £1,185,750.00

Penguins wrote ;

"Certainly after they commissioned a Kimmeridge report in June 2019 they failed to deepen HH-2 through the Kimmeridge for more data, they didn't dual complete or sidetrack HH-1 for the Kimmeridge."

Everyone has to forget about the Kimmeridge fantasy which UKOG blew a fortune on.

From the YE 2019 annual results we learnt that Sanderson's BB 'roll of the dice' cost dearly;

"There was also one exceptional charge. This was an exploration and evaluation write-off of GBP11.56 million. This was primarily comprised of a GBP9.25 million write-off of the BB-1 well and the BB-1z test. The BB-1 well was impaired, as it was determined that as a result of wellbore damage we would be unable to be used for production. The BB-1z test was impaired because, although oil flowed from the well it was determined that it was unlikely to be commercial. The larger majority of the remaining exploration write off (GBP1.21 million) related to Holmwood where the operator abandoned the site."

"..it was determined that it was unlikely to be commercial."

Remember that UKOG themselves , in 2019 , declared the HH Kimmeridge flow and pressure data , 'sub commercial'. As published on Page 22 of THEIR own Loxley planning submission dated 19th April 2019;

"Flow tests and pressure data from the Broadford Bridge and Horse Hill Wells Sites have been sub-commercial"

The kimmeridge dream is long over.

There are, since the 3 billion shares convienently issued to the trust, 32,539,926,104 shares in issue.

At 0.0062p per share the market cap would be £2.017m

In my previous post example I suggested UKOG might raise £4m (after consolidation); £3m to cover 12 months admin and £1m to well cover another Turkish drill.

For simplicity and a better understanding of the carnage to come lets just assume that UKOG were not consolidating and had the right to issue shares NOW to raise cash.

My more accurate calculations suggests that another 64,516,290,300 would have to be issued IF the price was ).0062p.

If the death spiral price was at the usual 20% discount then share s would be issued at 0.00496p

That means to raise £4m would require issue of 80,645,162,900 new shares

Total shares then in issue would be 113,186,089,000. 113 Billion shares

Consolidation will not remove the pain to come

"are you predicting no change in the mcap even tho the company just raised £4m??"

The market cap depends on the share price; it depends on the appetite to buy the shares. Will there be an appetite to buy UKOG shares just because they have managed to drag the show along for another year?

Of the circa £4 m I used as an example of the raise; £3m will be just for admin which does not add value BUT does ensure Sanderson gets his enormous pay for another year.