The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
UKOG is burning about £250k a month, that's 25% of it's marcap each month. It needs to double it's share outstanding every four months just to survive.
Go into a dark. quiet room and think about the implications of that before you feel tempted to press the buy button.
Fawley have no real plans for green hydrogen:
ExxonMobil accused of ‘greenwashing’ over carbon capture plan it failed to invest in
https://www.theguardian.com/uk-news/2024/mar/31/exxonmobil-accused-of-greenwashing-over-carbon-capture-plan-it-failed-to-invest-in
Fawley have been producing and consuming all the hydrogen it makes for decades. They have no need to transport that (non-green) hydrogen 50 miles to Portland for storage.
One of the major constraints if grid capacity for transporting electricity and even more so for hydrogen.
Portland is only 42 miles closer to London than Chester where most the existing salt caverns are.
Most renewable energy is produced north of Chester, so the energy for storage (either electricity or hydrogen) would have to flow past Chester on its way to London.
So Portland is actually a very strange place to locate hydrogen storage facility for London, it makes much better sense to build such facilities up north, near the large wind farms.
“certainly sounds bullish”, i’d say sounds like bull ****e.
ukog have been mentioning fawley since the beginning of the project in 2022, but it wasn’t until six months ago ukog actually managed to get a meeting with exxon, and that was only after joining in march 2023 the solent cluster which exxon is a founder member.
so exxon don’t seem that keen to me.
Here's a complete list of previous write-downs to UKOG's "assets":
2018 BB-1 "unable to be used for production" £9.25m
2018 "Holmwood operator abandoned the site" £1.21m
2020 Horse Hill "impairment charge of £7.89 million"
2020 "HH-1 should be impaired by £9.35 million"
2021 "HH-1 should be impaired by £1.46 million"
2021 Isle of Wight write-off £946k
2022 "HH-1 should be impaired by £2.9 million"
Total: £33m.
Yet to be disclosed: Turkey
If drill testing is ever carried out on HH-3 or Loxley the same pattern will be repeated.
The Operator’s plan was later revealed to be framing HH3 out to PPP who unfortunately, just like UKOG, are broke and any can’t raise the required funds to do anything.
Ocelot
“The definition of insanity is doing the same thing over and over again and expecting different results.”
Let's look at the history of UKOG's HH-1 valuation:
2022 "HH-1 should be impaired by £2.9 million"
2021 "HH-1 should be impaired by £1.46 million"
2020 "HH-1 should be impaired by £9.35 million"
HH-2 spouted water not oil
Turkey was dry
You have to admit UKOG's historical valuation record isn't great is it? The market can see straight through UKOG's "intangible assets"
"it does provide UKOG's valuation of HH"
They are just reading UKOG's Annual Report "The Directors have determined that the potential value of the Horse Hill development to be £19.3 million, which takes into account drilling of four additional wells in the field, and supports the value of intangible assets of Horse Hill."
It's the same widely optimistic valuation and nothing new.
Ocelot, your argument is circular and proves nothing.
Alba: "Management relies on the valuations of the majority owner of the project as they have access to fuller information"
So UKOG values HH, Alba values HH based on UKOG's valuation, you then work out what HH is worth to UKOG based on Alba's valuation which is based on UKOG's HH valuation.
Trouble is nobody believes UKOG's valuation, hence the low SP.
I see Conoco is on the list. Perhaps they will step forward to develop the project they abandoned as non-commercial 40 years ago. If will only have to pay 100% of the cost for only 50% of the rewards (if any), seems like a sweet deal (not).
The board aren’t even trying to persuade shareholders to vote in favour of doubling the number of shares, there isn’t even a “Background” section in the AGM notice. At the previous AGM the pre-emptive rights resolution only narrowly passed even with the help of the EBT. This suggests that SS has another cunning plan up his sleeve.
UKOG retains the authority to issue just over 1 billion shares before the AGM.
Imagine just prior to the AGM, UKOG issues RF/YA with 1 billion shares, obligated by the agreement to be voted alongside the company.
Together with the EBT, this would give them control of about 30% of UKOG shares. Given that at the Feb GM just under 10% of shareholders voted (excluding the EBT), they don’t need to care what pesky shareholders think, they can easily win the vote regardless.
Nothing screams double bagger more than a company about to double it's amount of shares and then use the cash raised for a couple more months of admin costs.
If RF/YA do request say another 200,000,000 shares then UKOG will amend the resolution so that its for an additional 4,076,840,000 shares.
So the number shares are likely to go from present 3.88b to over 8b
Nicholas Mardon Taylor was last re-appointed at the 2020 AGM and according to the Articles of Association directors have to be re-appointed every three years.
So he should of been re-appointed last year not this. Nick is 80, so perhaps he just forgot.
The MP for Portland facilitated a meeting. That's a very long way from the government saying they need hydrogen storage in Dorset.
"If" is doing a lot of heavy lifting there.
Would you put SS in charge of a £1 billion project? (be honest now)
Ocelot,
There is no requirement for hydrogen storage in Dorset.
No-one is going to trust SS with £1 billion.
Assume UKOG only targets raising enough cash to keep them afloat for 3 months in the hope that a miracle appears:
Monthly cash req for operations: £245k (from cash flow statement)
Offering price: 0.0255p (optomistic)
=> (245,000 x 3) / (0.0255 * 0.01) = 2,882,352,941
That’s 2.88 billion shares!
No details or resolutions which probably means they are still deciding what exactly the plan to save the company is.
Also they might be trying to keep the votes as low profile as possible as the last thing they want is for pesky shareholders actually use their votes.
After expecting others to invest over £100million in UKOG, here's the current total board holdings:
Stephen Sanderson 1,245,731 £318
Kiran Morzaria 450,818 £115