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Based on what we’ve been told the Kirkham Abbey Formation failed to flow naturally. But it is a ‘tight gas’ reservoir and its performance in other gas discoveries in Yorkshire over the years is consistent with the latest WN result.

It seems an ‘injectivity test’ was performed. This is a usually done to establish the rate and pressure at which fluids can be pumped into a reservoir without further fracturing of the formation.

Perhaps this procedure was conducted to evaluate possible future stimulation treatment parameters and operating limits.

Penguins

Turkey is a catastrophe for UKOG - technically and commercially.

Just like the Grand Bazaar in Istanbul, a Turkish merchant smothers a buyer with false promises and hospitality (i.e. cup of tea) while selling near worthless products for astronomical prices. Not for the first time, a foreign investor in Turkey has been fooled again. Indeed, this approach is so blatant that you’ll find shops in the Bazaar advertising ‘Genuine Fake Watches’ which appeal to buyers wanting to create an illusion - but not the reality - of wealth.

AME were keen to save the Basur licence by fulfilling the commitment to spud Basur-3 well by end-June - but did U|KOG buy into a ‘Genuine Fake Project’ without looking very carefully first?

AME’s CPR of Basur by Xodus and estimation of oil-in-place is described as ‘missed pay’. Or is it just residual oil which can never be produced? There is a report of oil flow from an early well, but was it real? And why wasn’t it developed? It’s about time investors are shown the technical details and original data from the Xodus CPR to judge for themselves.

UKOG’s transformational opportunity, is completely in the hands of AME. Our only option is to keep spending to maintain the illusion of future wealth. Sure, the train has left the station, but now it’s gone off the rails.

Based on what we’ve been told it’s going to be at least a year until we see any more drilling at Basur-3 - if ever.

Get out of Turkey now rather than spend any more investors’ money on this mess.

Headinthesand

Chief Executive Stephen Sanderson commented:
 
"Clearly the unforeseen delay in delivering the Basur appraisal objective is disappointing, but we remain pleased by AME's exemplary performance in resolving the stuck drilling assembly situation. We concur with AME that the most prudent course of action is to pause commencing the sidetrack until new modern seismic can be incorporated to further de-risk drilling and help achieve our objective.”

So let’s see what ‘exemplary performance’ of AME means.

Failure to secure new licences
Scrambling to drill Basur-3 to meet licence terms
Basur-3 well prognosis wrong
Stuck pipe on Basur-3
Failure to reach Basur target horizon
Long delay before drilling at Basur-3 starts, if ever

Looks to me like AME’s 60 years of drilling experience is actually the same year repeated 60 times.

What a shambles.

Thanks Penguins

It just goes to show how important accurate seismic mapping is. 2 or 3 milliseconds TWT can make all the difference - assuming the whole Portland is in hydrostatic equilibrium.

I’d forgotten about the H2S. Must be result of late bio-degradation since Weald gas is thermogenesis origin according to previous publications/geochemistry.

Surprised this wasn’t mentioned at the planning inquiry. Light and noise at a wedding reception next door, but pong of rotten eggs and irritation will upset bride and groom!

Penguins

I appreciate your alerts on the proposed Loxley well. UKOG has described it as an ‘appraisal well’ of Conoco’s 1980s vintage gas discovery at Godley Bridge and implied a low risk of failure. But UKOG has brushed over the two previous attempts to appraise the Godley Bridge discovery, both of which ended in failure.

Godley Bridge 2 was drilled just a kilometre from the discovery well and was dry. Later, Alford 1, another appraisal well, but was dry too. Although both wells found a decent Portland Sandstone reservoir there was no gas. The cause of failure was that both wells were ‘low’ to prognosis by a few tens of feet. In turn, this was put down to a) lack of detailed static corrections on the seismic and b) sparse velocity control used for depth conversion of the seismic.

None of this is helped by the overlying Purbeck anhydrite which causes calcite pore occlusion in the top few feet of the Portland Sandstone and reduces porosity and permeability to create a ‘thief zone’. Whether such a reservoir is capable of commercial flow rates is doubtful based on existing well data.

With no new seismic or velocity control one has to assume Loxley will be subject to similar uncertainties. This is reflected in the range of uncertainties of recoverable resources shown in two CPRs. One completed for UKOG by Xodus in 2018 of 34 bcf and another for iGas by Senergy of contingent reserves of 5.6 bcf, which included the Godley Bridge 1 well. So Loxley - far from being UK’s largest onshore gas discovery - it could also be the smallest, or even nothing at all.

Rubey

Of course Russia will agree.

The Ukrainian transit deal is used to skim millions of $ by Dmytro Firtas a Ukrainian a middleman for Gazprom and with connections to the Kremlin, Firtash funneled money from his stake into the campaigns of pro-Russia politicians in Ukraine and obtained his position with the agreement of president Putin who may also benefit.

Similar in Turkmenistan, methane capital of the universe, where another intermediary, Itera, is run by Igor Makarov. Itera had exclusive rights to sell Turkmen gas to Russia, Ukraine, Belarus etc via Gazprom’s system. Itera’s margin was then distributed to leaders of those republics/countries to keep them aligned with Moscow.

So it’s not in interests of Russian big shots to reduce their personal fortunes, but rather to expand deliveries into neighboring states by paying corrupt politicians to play ball. That’s how it works - it’s not a theoretical Thatcherite Utopia out there - it’s post soviet organized crime.

But, closer to home, the current NBP gas price blip is good news for WN - if only we had some gas to sell.

We’ve been here before - since the 1970s.

The Reagan administration stymied the Soviet Urengoi pipelines in late 1970’s for a few years by sanctioning western suppliers of gas turbine compressors.

At roughly the same time super-giant gas fields like Troll were discovered in the Norwegian North Sea, but were initially appeared un-economic because there was plenty domestic gas in UK, Netherlands and prices were low. For example the first West Sole gas was sold at the beach for 9d - yes, 9 old pence per therm because it was competing with coal and town gas.

In the early 1980’s the American’s did further work and launched a diplomatic offensive to persuade their European allies to produce as much of their own gas and not rely on Russia. This link takes you to a series of documents which show what they did. Reagan even invited the King of Norway to Washington to convince him to get the Norwegian upstream industry to ‘sell gas and find oil’ - which became Statoil’s slogan.

https://drive.google.com/drive/folders/18IYbgfI4KuM789vHTq3pMpCYKUOK6MrG

So how is that relevant today? Well UK and Norway still have plenty of gas with competitive cost of supply. But today the USA is encouraging its European allies in other ways consistent with the move from fossil fuels.

After Angela Merkel and Joe Biden met in the White House in July 2021, an agreement was reached between Germany and USA which might trigger sanctions in case Russia uses Nord Stream as a "political weapon". The contract prevents that Poland and Ukraine are cut of Russian gas supplies. Ukraine will get a 50 million USD credit for green technology until 2024, Germany will set up a Billion USD fund to promote Ukraine transition to green energy. Poland will receive nothing. The US will have to promote and support investments. This should compensate the loss of the gas transit fees. Additionally the current contract for transiting Russian gas through Ukraine will be prolonged by 10 years, until 2034, if Russian government agrees.

Like I said Deemule, it’s all in the mind. You surely don’t believe all that Putin claptrap do you?

Firstly 45% of UK’s gas comes from UKCS and there is plenty more to be discovered and developed. The rest comes from Norway and the continent via the Interconnector. LNG import capacity makes up short term requirements.

Far from being an energy ‘threat’ Russia is a complete E&P basket case with corroding domestic pipelines built in another era and new export pipelines built for non-commercial, political reasons which operate at 50 bars compared to those elsewhere which run at 100 bars.

About 1% of UK’s physical gas delivered to your boiler comes from Russia.

GP - the current NBP price is part of a global tightening in LNG markets. In July there was only one LNG cargo delivered to UK and the regas terminals could not meet their expected outputs. So as LNG tightened, prices responded despite plenty of pipeline gas and traders made hay while the sun shined. As always, what goes up must come down.

There is no structural gas shortage, just as there was no oil shortage in the $100/bbl era. It’s all in the mind.

I bug - Buntybay was SS’s consulting company based in Guildford prior to Lenigas luring him into UKOG - which enabled DL to resign from UKOG + other AIM outfits and move to his yacht in Monaco.

headinthesand

Investors' legal protection is provided by the 2016 Companies Act where Directors are personally liable to conduct Fiduciary Duties on behalf of all shareholders equally - including disclosure.

Beyond that, the Misrepresentation Act is designed to protect investors from relying on false or misleading statements. This act is easy to sidestep by paying for a CPR which is like lending your watch to someone and asking them what time it is!

FCA doesn't enforce these laws, but simply refers wrong-doing to the courts.

Why wait for new seismic?

Sounds to me like the well prognosis was wrong and drilling threw up some surprises.

Drilling in relatively young folds frequently has to cope with residual stress in the rocks which causes the hole to go out of gauge in shales using water-based muds. Holes become elliptical with the long axis aligned to the stress field. The associated shale sloughing overwhelms the down hole hydraulics and the drill string becomes differentially stuck. Man well, help us on this.

So doing the seismic first may help create a new prognosis although acquisition, processing and interpretation will take months by which time the Basur site will be covered by snow and freezing cold. This means waiting 12 months until drilling re-starts.

For anyone interested in a short and distort example of market abuse look no further than false stories about ReconAfrica’s recent drilling onshore Namibia.

https://www.newswire.ca/news-releases/reconafrica-responds-to-short-seller-s-biased-and-false-short-report-899998915.html

Then ask yourself how such a thing could be orchestrated on AIM via bulletin boards. Implausible in my view.

Feeling lucky

Judge for yourself; https://reabold.com/wp-content/uploads/2017/10/Reabold-Victory-Presentation-FINAL.pdf

The presentation is a ‘re-branded’ version of Corallian’s. It’s thorough and robust, with key sensitivities described. Of course, it depends on pipeline access via a third party, but OGA likes to support this type of development to maximise economic recovery. And the subsurface is less risky than other Reabold projects and simply requires a single producing well and proven subsea wellhead etc.

Of course, Murphy’s Law can apply at any time, although simple projects tend to work as designed.

It’s also a pet project for Corallian because most of their team are ex-Texaco - the company which made the original discovery.

Feelinglucky

ADX licences are in the Pannonian Basin. The source rocks and reservoirs are very young (Miocene) and have been explored for over 90 years. Over that time all the obvious structural prospects have been drilled and operators today are using 3D seismic to pick off small (10 to 20 bcf) stratigraphic targets.

But almost all remaining targets are effectively ‘tight gas’ - i.e. what the recent ADX well found, with gas shows but no flow. In other words the lack of flow is fundamentally a regional scale geological problem rather than a near-wellbore engineering issue. The Pannonian Basin was originally a huge lake without tides and waves to sort the sand input into even grain-sizes which would have created better permeabilities. The lake simply filled with all manner of sediments from the surrounding mountains, including organic matter which generated the gas.

However, as is to be expected in young, rapidly buried sediments, both shales and sandstones tend to be over-pressured because the basin is still ‘de-watering’ and compacting. There are numerous, active mud volcanos around the basin margin which further illustrate the point.

So drilling presents quite a few challenges to get through the shales but without damaging the reservoirs to the extent the mud filtrate invades the tight gas reservoirs and wrecks near-wellbore permeability.

krull

You wrote 'From what I understand, condensate is liquid gas!'

Yes - that's like saying 'water is liquid steam'

Penguins

As you say lack of information from UKOG really restricts investors’ appreciation of the risks and uncertainties associated with their portfolio. Aside from Horse Hill and Loxley the other ‘risky’ project is Arreton where 2 wells dry have already been drilled over the years.

Arreton-1 was drilled by BP in 1952. Every target reservoir was drill stem tested with no flow at all. Yes there were oil and bitumen shows in the Portland Limestone which hardly qualifies as a reservoir with porosity measured from cores at 3%. Then BG came along with Arreton-2 almost as a stratigraphic test to identify the easterly extend of the Sherwood Sandstone - equivalent to the main reservoir at Wytch Farm. It was absent, although there were traces of bitumen in the Portland Limestone.

Then, despite all the conflicting evidence, the CPR for the proposed Arreton-3 assigns a commercial chance of success of 75%!

GP

Understood. After an earlier EWT was terminated due to smells Raithlin submitted an Odour Management Plan which is very detailed. ~There is also an H2S Scrubber in the surface test equipment.

https://consult.environment-agency.gov.uk/psc/hu11-5da-rathlin-energy-uk-limited/supporting_documents/Variation%20Application%2009%20Odour%20Management%20Plan%20%20R4%20%20Addendum%201.pdf

GP - On the H2S story there’s enough anhydrite to cause gas souring via biodegradation of the gas.

As you know, hydrogen sulphide occurs in many limestone reservoirs all over the world. In fact, the world’s biggest source of elemental sulphur is associated with biodegradation of crude oil and gas.

The process is called ‘gas souring’ because the hydrogen sulphide and carbon dioxide bi-products are acidic i.e. ‘sour’ . In contrast, sandstone reservoirs tend to contain ‘sweet’ oil or gas because iron in the sediments reacts with sulphates to form iron sulphide - or ‘fool’s gold’.

Beneath the surface at West Newton is a gigantic geochemical factory turning anhydrite and methane into hydrogen sulphide and limestone rock. It’s common in Netherlands Zechstein reservoirs + other fields in Yorkshire. But easy to treat or incinerate.

Penguins

Part of the problem with Loxley and Godley Bridge is caused by how the seismic data used for mapping was acquired and processed. The seismic was acquired by Conoco in the early 1980s and by, today’s standards, was a very basic approach. The energy source was Vibroseis with 48-channel recording using shot and detector intervals of 50 metres. This was processed to yield a multiplicity of 12-fold with CDP intervals of 25 metres. The approach was cheap and fast costing less than $1000/km which was fit for purpose at the time.

The shortcoming was lack of detailed near-surface velocity control used to reduce final displays to a sea-level seismic datum. In general, the low-velocity Wealden outcrop in the central Weald caused reflections on the final results to difficult to depth convert. Subsequently Conoco also acquired low-velocity layer surveys to help compute more accurate ‘static corrections’ but by then Conoco’s management shut down the entire onshore UK as non-commercial.

When Conoco drilled Godley Bridge-1 the primary objective was the Great Oolite and the shallower Portland gas came as a surprise.

https://www.researchgate.net/figure/North-south-seismic-line-across-the-Godley-Bridge-Field_fig5_323948980

You can see from the seismic that any Portland level structure will have very low relief and in a success case would need a dozen or more well-sites to appraise and develop it.