Member Info for Exploration

Ocelot

That's right Ocelot,

But look at it through a Turkish lens while your cash is depreciating at >25% per year and government is following route to ruin while feathering its own nest.

Suddenly even AIM looks stable and attractive!

Come and join us at the Bebek Hotel Bar one evening - https://istanbul.com/bebek-bar-bebek-hotel

Wizard

On HH - why don't we ever board member see Allen Howard offer an opinion? After all, he knows how to develop the Austin Chalk which is a fractured reservoir with matrix permeability an order of magnitude better than HH micrites. Maybe he's happy with his income from running NuTech.

And if it costs Angus $49/bbl to dispose of produce water from Lidsey, how much does it cost UKOG for same.

ocelot - that's true - but her daddy owned the wrong newspaper so Çukurova Holding is currently stalled - despite Mehmet being Turkey's second richest man.

Ocelot - yes, Mehmet Sepil and Mehmet Karamehmet cashed out thanks to Matt Rothschild and co who'd convinced 'investors' to sponsor their cash shell. And then they managed to write off $1bn in non-existent reserves in Iraq, not to mention a crazy exploration campaign in Africa led by ex-BP CEO.

Wizard - just bar talk in Bebek Hotel tonight. Word spreads quickly in Istanbul

This recent rise is fuelled by wealthy Turks believing UKOG’s SS ramping as a means to invest indirectly in AME, which is not listed on Istanbul bourse because it has always been a private company. While they might see value in UKOG/AME ventures they’re probably unaware Trousers has managed to turn every $ into 2 cents in 5 years - quite an achievement.

If you live in Turkey there is really no liquid market in equities, especially in oil and gas. Far less risky to get your money out of the country into legitimate markets such as AIM in London. Little do they know about AIM.

Neversell

On oil/gas it will be a combination of Gulf of Mexico, Egypt and Azerbaijan. Why? Well, for BP the exit barriers are simply too high and they're gas-driven, with subsidiary oil and very long term.

In contrast, BP recently paid The Gambia $25million cash to exit without drilling, wants to reduce its interests in Senegal/Mauritania and is looking for buyers in Angola - places where they had no long-term presence/relationships or paying markets for gas/electricity.

Neversell

The main reservoirs in the new discovery are same as those in Shah Deniz. That is the whole Balakhany sequence and the deeper Fasila sandstone. In total >1000m of clean, well sorted sandstones deposited in the paleo-Volga delta. The long gas columns in this basin are sealed by the highly over-pressured Sabunchi shales.

BP has developed pressure prediction, drilling fluid and casing programmes to cope with the sudden pressure regression at the base of the Sabunchi which are the most challenging part of the drilling programme. At well completions have been developed to cope with sand production.

Although drilling is expensive it is more than compensated by the exceptional well productivity of more than 0.5 BCM of gas per year per well. To put it in perspective Shah Deniz alone contains enough gas to supply the whole of Turkey for nearly a century although the ‘southern gas corridor’ to Italy and beyond can be expanded with additional compression. Even a single well can supply the whole of Georgia’s gas demand.

And a new development will benefit from the huge Sangachal shore terminal where multi-phase (gas and liquids) pipelines from the field enable separation of condensate for spiking into the Baku-Ceyhan oil pipeline while dry gas goes into the South Caucasus Gas Pipeline. While the water at the discovery is > 500m deep, so it is over the southern half of Shah Deniz which has subsea well heads and specialist vessels in Baku to service and maintain them.

https://www.azernews.az/oil_and_gas/177360.html

No reserve estimates announced, but ~ half the size of Shah Deniz which means >40 tcf + 1 bnbbl condensate. Probably biggest discovery in the world this year. With pipelines to Europe completed it means steady revenue for BP and SOCAR for decades to come.

The structure has been recognised by geologists for 60 years, but at 7000 metres has been a drilling challenge until now. The discovery well took > 1year to drill and was spudded before the pandemic took hold.

Mirasol,

Looks like we’re all agreed AME don’t need the headache called AIM

But Turkey is a labyrinth of inter-connected wheeler-dealers. Just like carpet salesmen in the Grand Bazaar, foreign investors are warmly welcomed, smothered with hospitality and always pay too much.

Aladdin’s boss, Cem Sayer, has a brother, Ecvet Sayer, who runs a company with some production in Turkey but also operates 20 drilling rigs

http://www.guneyyildizi.com.tr/en/oil-gas-in-turkey/

Ecvet’ s company earns money by providing local and regional drilling and site preparation work. The Sayer Group simply took on the fields and inventory established by Shell and Mobil before they left Turkey. Oyman Sayer, Cem & Ecvet’s father, saw the chance to take on the abandoned business/equipment when Turkey was in chaos due to military coups in 1960, 1971 and 1980. Apart from offshore, foreign investors in upstream have mainly failed to generate returns, although the Sayer Group has done very nicely from rig contracts.

The exception could be Valeura, who brought deep basin gas experience from western Canada to the Thrace Basin with a 20 tcf discovery which was beyond the capacity of the Sayer’s drilling fleet. They have yet to get this into production.

https://www.valeuraenergy.com/wp-content/uploads/2020/12/2020-12-Valeura-Corporate-Presentation-V2.pdf

~The Beverly Hillbillies have produced more than Reabold -

I bug

It doesn’t matter.

There was nothing found at Arreton 70 years ago, despite no flow fromdrill stem tests of every prospective horizon.

BP Arreton 1 completion report link provided by poster ‘Stonefold’ last year.

https://ukogl.org.uk/map/php/pdf.php?subfolder=well_reports&filename=01+-+Exploration+Wells%2FARRETON+1%2FARRETON+1_Well+Completion+Report.pdf

Page 2 -3
".. Only very slight traces of Oil were encountered ..."

Page 10
"... At 2560 feet a 4 inch band of brown compact limestone was strongly impregnated with oil - the strongest show noted in the well ..."

British Gas drilled Arreton 2 looking for deeper Sherwood Sandstone, after it had been proved at Wytch Farm

Remember, the current Arreton licence was applied for on the basis of the famous ‘M-Structure’ which is largely offshore near Mottiscombe on the south coast of IoW.

So why is UKOG drilling Arreton - 3?

Seems that GL didn’t bother to attend the planning committee - see link below.

https://westsussex.public-i.tv/core/portal/webcast_interactive/544819

Wizard

Just wondering if you have a view on this week’s Balcombe planning refusal.

The West Sussex planning committee introduced a couple of new grounds for refusal such as;

1) The application did not conform with ‘exceptional circumstances’ criteria to warrant approval . i.e. the Balcombe field has negligible reserves.
2) Granting approval would contradict current national government policy on oil and gas.

Loxley would seem to be similar and Arreton probably stands no chance, since two previous wells at same location were dry holes.

We all know the Majors were bleeding cash last year. But this crisis has shown just how quickly and ruthlessly the industry can adapt instead of just putting its head in the sand. Cost-cutting has seen average corporate breakevens fall from $54/bbl to $38/bbl in 12 months according to one well respected source. Some analysts reckon to top quartile may break even below US$30/bbl in 2021. This means the best companies are set up for a V-shaped FCF recovery. At $55 the FCF of the top companies is projected to exceed any year since 2006 and at US$70/bbl, FCF would be double the previous peak.

Headinthesand

Carless was a small company with staff of five. They drilled 36 wells between 1981 and 1986, including 10 producers at Humbly Grove. Wisely, with the only regional understanding of the Weald, including the Kimmeridge nonsense at Horse Hill, they cashed in and all went on to bigger, better things. Their only competitors were Conoco who licenced the central Weald but only found couple of discoveries at Palmers Wood and Godley Bridge before their head office at Ponca City pulled the plug.

Lidsey was a commitment well in PL241 and was only drilled to fulfill the licence obligations - although a ‘discovery’, Carless wrote it off.

But Carless and Conoco did leave a legacy of high quality seismic and well data for AIM promoters to dress up as investments for private investors. The Weald has a long history of technical and commercial failure since Carless and Conoco departed. Virtually all the Weald seismic was acquired by CGG and processed by SSL which provided continuity of technical staff throughout that period.

All this happened before the AIM casino was invented.

Headinsand

The ‘expert’ responsible for the latest seismic interpretation and presentation about Lidsey seems to have enlarged the accumulation by including an area which is part of the Tertiary-age Portsdown Inversion trend. As experienced Weald Basin petroleum geologists know, these Tertiary-age structures formed after oil had been generated and expelled and are all dry.

Years ago D’Arcy (BP) drilled dry wells in the centre of the Weald anticline at Ashdown and it dawned on everyone that the rocks there had originally been part of a huge syncline. In the 1980s Carless plastered the margins of the basin with 48-channel, 12-fold Vibroseis in a four-year programme of drilling and seismic which led to discoveries at Humbly Grove, Herriard, Hordean, West Dean, Storrington and so on.

Huge surface anticlines like Portsdown and Arreton, on the Isle of Wight, were proved dry in the 1950s, again by D’Arcy.

The key success factor was only to drill Middle Jurassic structures where the isopach between the Gault Clay and the Great Oolite was defined on seismic as a ‘paleo-thin’ -i.e. a structure available to receive basin-centre oil charge. That’s why Carless drilled at Lidsey in 1987. But that’s only the seismic problem; far more risk in involved with the permeability of the Great Ooolite - which is almost non-existent at Lidsey. In carbonate reservoirs, early petroleum charge is crucial to prevent deterioration of the reservoir.

Experience suggests Carless got it right - small oil in place and non-commercial. I’m just amazed after more than 30 years that it’s worth wasting more money on Lidsey. And where will Angus find a seismic crew to acquire a single new seismic line - there simply aren’t any in UK.

One thing Looney has omitted to remind shareholders about is the risk-reward strategy of the ‘renewable BP’.

The new strategy involves much lower risk and only utility rewards - so dividends will never match the returns of the previous decades.

Sure, earnings can increase but only proportional to increased investment. But it’s ~ 5% forever, but a safe bet.

Watts

Good find, although the spotless high-viz jackets suggest they don’t actually ‘kick steel’.

https://m.youtube.com/watch?v=KZxUiFFVEAQ

RNSTranslater

I’m not so sure RBD’s publication of the core photo and logs from WN would cause much ‘air punching’ reactions from most petroleum geologists or reservoir engineers - although City types may think otherwise.

The logs do show the gas column - but, although there may be 14% porosity, the core photo of the Kirkham Abbey Formation shows its characteristic lack of EFFECTIVE porosity i.e. connected pore space. In short, good porosity doesn’t mean good permeability. On the other hand, the resistivity logs are processed to show some effective porosity. So we’ll have to wait for lab measurements of cores and well testing to find out for sure.

Core plugs have been taken from the WN core, as seen in the photo and normal practice is to plot lab-measured porosity vs permeability to establish a relationship for future wells. Typically, Kirkham Abbey formation has a permeability of 0.1mD to 1.0 mD reported from other wells - both from water abstraction and petroleum exploration.

- Core photos of Kirkham Abbey Formation; RBD (PAGE 10). Typical ‘tight’ dolomitic reservoir.

https://reabold.com/wp-content/uploads/2021/01/Corporate-Presentation-January-2021.pdf

- Core photos of Kirkham Abbey Formation; UJO (below, PAGE 5) shows some secondary, vuggy porosity which is more encouraging. Vugs are cavities, voids or large pores in a rock that form after deposition and are commonly lined with mineral precipitates

http://unionjackoil.com/wp-content/uploads/2021/01/West-Newton-Presentation.pdf

Identifying vuggy zones is one of the key issues in dolomite reservoirs because vugs play an important role in reservoir quality, storage capacity and flow properties. separate vugs and touching vugs. In general, the productivity of a reservoir will increase where the fractures are increasing and the touching vugs are expected.

Let’s hope Raithlin manages to design an extended testing programme which characterises the potential of this reservoir.