Member Info for CynderLad

They could be emptying tanks of oil produced by HH1. We simply do not know. We all want to know the status of HH2z, have they been flowing it on a heavily reduced choke or is it still shut-in? The Twitter updates from John Rogan are excellent. I do not trust those from FOTH though; he has shown his true colours and is showing conflicting stories. Anyone seen a BKP Twitter update to help settle the score? Are those oil tankers carrying crude or contaminated water?

One thing I was trying to establish; how many lengths of pipe on the rack would constitute the full string? Would it be 11 or 12 lengths, or would it be more like 30+

In the pictures on Twitter, its hard to count the pipes, but it looks like 11 or so on the rack that are visible. I cannot tell whether these are just 1 deep or 3 deep; so not sure if there are 11 lengths, 22, or 33.

It would be interesting to know whether they have pulled the full string out the well or not, etc, etc.

Its not really that interesting to be honest. UKOG need to get on with the work-over and give us a proper update.

And I agree with you Penguins, it would be good to have the production rate per day from HH1 for the period before the work-over, a month of daily rates would be good. SO as to help us understand whether the "significant" increase is achieved, and what that represents. 300 bopd is an absolute minimum.

The golden question is; whats the story with water cut and the figures in June vs May showing the increase. Can UKOG please explain and account for this increase. No more BS please.

With HH1 workover on-going. Would expect a little more chat to be happening. Updates on Twitter look positive, but a little bit of guesswork to try and muster a view of status on site.

Looks like John Rogan and Tony are posting the bulk of the updates, and they look decent enough to me. I don't know how much pipe should be on the rack, or how deep the pump was prior to workover.

Anyone know how many lengths of pipe should be on the rack when pulling the full production string?

Anyone know what was in the red boxes that were delivered? Theory on Twitter is that they were the perf charges/guns.

Can someone remind me what the full Portland play is in feet and how much UKOG therefore plan to perf? And how much was perf'ed previously?

Any theories on what the additional perforations may deliver in additional flow?

Mirasol, haven't the EA already signed off on a re-injection well?

Water is essential for reservoir pressure and long term production. That is where HH2z may actually be a benefit.

Why pay BKP to truck and treat water, when it can be re-injected? They can setup a feed of water produced from HH1 directly into HH2z.

A fly in the ointment, may be that it has been commented that HH2z was in a potentially different compartment of the Portland. I'm hoping that this is the case (if HH2z and HH1 are same compartment (then the water ingress in HH2z would also impact HH1). SO the water injection into HH2z may become more of a pure disposal cost saving rather than reservoir pressure. Not sure what the O&GA would think of that, and if the FDP would allow it. Thoughts?

Not me. I'd not risk more than £1.5k on this share with the current lack of professional behaviour from the board. And I'm being kind in saying that.

Mirasol, we won't even get a fag packet plan from them. We know the following based on RNS's:

HH1 work-over with perforations using new kit : underway (hopefully finished by the 16th Oct)
Turkey : late 2020, but starting to feel like it may be Q1 2021, and bookies may have a Q2 2021 spud as favourite
Loxley : planning 27th Nov, UKOG believe late 2021 spud (subject to planning)
IoW : some rumours of committee prior to Xmas 2020 (I'm expecting Q1 2021, and feels a 50/50 chance of approval at best)

HH2z : Sweet fanny adams news on interventions and timings
Other assets : Go figure, not heard much on those for a long time.

There, print that off, stick it on a fag packet and that is where we are. Pretty terrible effort by UKOG. It would not take much to produce and issue a new corporate strategy. I'll conclude that they dont want to do that as it will present potential/current investors with more questions than answers (especially on funding and output).

Nuff said. Back to the grindstone for me.

Good post Ninetails. Do you have a link to that research paper by the folks at Stern School? I've like to have a read. May fill an hour or two on a rainy autumn evening. :-(

I've seen it work both ways. Lets take a 20:1 consolidation as an example.

0.16p per share becomes 3.2p per share.

It is my opinion that with a value of 3.2p, the SP can move quite quickly. A 20th of the shares in circulation, could make them a little stickier. One piece of good news and a 10% jump becomes a little easier to achieve (in my opinion) than it is with a SP of 0.16p.

But each to their own, and I'm sure that there have been plenty of cases where consolidation leads to further downward pressure (especially if there were further placings). For me it is the placings and bad news the kills this company, a consolidation is neither here nor there.

Check the SCC website. Due to committee 27th Nov. ibug is correct.
Not a great surprise, I think they are playing the Covid card (which is appropriate as safety of Nimby councillors is more important than Loxley), and they want to do the session in person and not virtually (the silver surfers struggled with basic IT last time around).

It would be great to see SS do an open an honest interview. I'm sure he is gutted by the HH2z failure, he should show his true feelings, and show sympathy to LTH'ers. But, he doesn't have the balls to do that, he's a coward and likes to hide away. The measure of a man; is how he acts under pressure and on that basis on a scale of 1 to 100 (100 being high), SS ranks in single figures.

Skwizz, the concept of investment in AIM, is one that involves a higher degree of risk than investment in FTSE 100. There are no concrete guarantees. Being a mastermind of investment, you must be aware that AIM investments are a little speculative. Especially in the small oiler industry, where one failed drilling campaign can kill the SP, leaving a company needing further funding.

SS has pulled off something that many other small oilers struggle to do; he's had funding for BB (fail), funding for HH2z (looks a fail), and now funding for Turkey (place your bets).

Compare that to some others, and you'll realise that UKOG shareholders are lucky that SS has pulled off the funding miracle, UKOG could have de-listed under different management (and they may well end up going that way if Turkey is a turkey).

p.s. when transferring assets at cost, that is an accounting matter. But in practice the physical kit transferred may be different to that declared on the books. Yes, I have seen that first hand; books stated transfer of asset x at a valid market value, but in practice it was a different asset with a much higher value. And yes, they did get away with it.

Mirasol,

I cannot comment on HMRC provisions on O&G, and how sharp they are in that industry. I'm not in the O&G industry myself.

Do you speak from experience? Do you have any examples of scenarios/legal cases where HMRC has taken action against an oiler?

I have a few mates who work for HMRC (they could earn more in the City), they would be insulted to be told that they are not as sharp as colleagues who may focus on O&G. Maybe it is more a case of industry specific experts, rather than having the "top guns" working in one particular industry.

One thing I can tell you, it that it takes forensic accounting and very well run audit to uncover the most significant opportunities that a group may take. e.g. In a situation where output cannot be increased, UKOG as a subsidiary may be able to make a small profit, but if they could reduce costs, then they can increase profit. The art of the game is to have the Group cover some of the costs, but to cover those up through accounting wizardry. Examples:
- Group may use a supplier for haulage, cancel the BKP contact and let UKOG make use of their existing haulage agreement, but charge a much lower rate than a pro rata charge
- Group will have their own payroll and back-office functions. UKOG folk could be made redundant, and then group provide those functions. And guess what, they could charge a figure well below the actual costs. Its a track the wooden dollar exercise.
- UKOG could purchase assets from Group at a reduced rate. e.g. UKOG may benefit from owning further equipment rather than renting it (as was the case with the recent PW Well kit purchase). Group could purchase those assets, deploy them somewhere for a short period, then transfer them onto UKOG at the reduced rate

There's plenty of games and tricks, and as you have already noted, it would take the right people at HMRC with the sharpest skills to spot it all. And even then, it can become very difficult to prove that Group had acted inappropriately.

And to provide balance and to complete the below post I made.

The obvious issue with running the acquired business as a subsidiary, is that the past losses can only be utilised by the subsidiary and not the group. So the UKOG subsidiary would have to make a profit for there to be a use of the benefit of past losses.

And so, some would think that the door has closed on the benefit, because could UKOG ever make a profit? But, there is an option for the Group to transfer some other sites into the UKOG subsidiary, sites which are profitable, but it is a very much a game of cat and mouse from an audit perspective; HMRC could pick up on the game, and there are plenty of cases that HMRC have won in such scenarios.

The biggest question is; can UKOG generate a profit? If so, those past tax losses become a very tangible benefit. And in such cases, it would make them more attractive to a suitor than a company with no losses.

That's enough on the matter. I am not professing to being an expert on the matter, just speaking from my own experiences.

DYOR as folks say.

Mirasol,

That statement you just made is not a good analysis.

Any company with such losses is of interest to a buying party. They can benefit greatly through an acquisition and the losses are a big attraction, but there are a minefield of issues.

A potential suitor would need to run UKOG as a wholly owned subsidiary. That way there is room for manoeuvre on use of past losses. If they were to acquire them and amalgamate fully into their own business, then the past losses would disappear like tears in the rain.

But beware, there have been countless cases of HMRC taking folks to court on such matters, and its not a simple affair to benefit from past losses through acquisition.

As always, do your research. Part of which should be a Google of HMRC tax loss acquisition cases. Plenty there for you to read and enjoy.

Oh, and how would I know? Well I used to work for a company that went through that scenario, and the company that bought us ****ed up on the acquisition.

I earned close to that figure last year (£150k) and that did not require me to work more than 30 hours a week, or have to deal with the issues that SS has. You need to wake up and realise it is 2020 and not 1980. £150k is small money nowadays for a CEO of a small company.

I think LSE should take out a legal restraining order on FOTH. He is flying very close to the sun with bans on LSE for a large number of accounts. UKOG may also wish to do something similar, maybe even a restraining order preventing him from coming within 1 mile of the site. I dont think that would be unfair. Especially given his history of incredibly biased agenda-driven bumf.

I dont think Turkey is a lifestyle matter. Its a joint venture with another party putting up a lot of $$$ also. One thing I know about Turks, they don't like wasting money.

And so what? We are the UK. UKOG is a British company. and Turkey is not in the EU. SO what has the EU got to do with the price of fish mate?