Member Info for Exploration

2kally

Don’t know without Raithlin reporting on geochemistry of fluid samples - probably a ****tail of liquids.

But many petroleum basins have more than one source rock each with different burial histories. And remember, Raithlin reported oil possibility after running cased hole pulsed neutron log. And I think there were reports of fluorescence in cores.

So an interesting geological story may emerge after decades of drilling and the appliance of science.

Miker

Clearly Raithlin has some homework to do to unravel God’s great geo-chemistry lab because it affects reservoir quality and petroleum phase. The current view on source rocks in saline systems is that organic matter tends to accumulate in bottom sediments under a density-stratified mass of saline water where the actual water layers are subject to oscillations in salinity. Unlike open marine source rocks, the salt-loving algae form a pink coloured ‘scum’ on the surface. Their organic remains are not produced at a constant rate but rather in pulses in response to relatively periods of less ‘stressful’ conditions that occur near the surface. The algae leave ‘bio-markers’ in any oil produced characteristic of the deposition also environment. However, it could be that the liquids in WN are simply condensate derived from the deeper, early Carboniferous source.

But you’re right - in the WN area there could be a more extensive, unexplored oil play.

Where did the WN oil come from? Well, if, indeed, there is an oil leg at WN a recent paper based on the occurrence of oil actually flowing into the new Boulby potash mine has been interpreted as being generated from a source within the Kirkham Abbey formation.

https://expronews.com/exploration/newly-proven-zechstein-source-rock-further-de-risks-mid-north-sea-high-petroleum-play/

OSLO, Feb 9 (Reuters) - Royal Dutch Shell will
narrow its exploration scope in Norway to focus on natural gas
production and possibly offshore wind in future, it told the
Norwegian oil and energy ministry.

Shell said in October it planned to reduce its oil and gas
operations to nine basins around the world as part of its
strategy to reduce the carbon intensity of its operations. It is
expected to announce details of its new strategy on Thursday.

"In 2020, we have made a choice to focus exploration
activities in Norway going forward to areas around existing
discoveries and infrastructure," it said in a letter on the
ministry's website, published as part of a public consultation
for a government report on energy policy.

"That means that we now primarily position ourselves as a
gas company on the Norwegian shelf ... This is a business that
in the coming decades will create significant value for us as a
company and Norway as a nation," it added.

Shell said in the letter it might take part in offshore wind
power developments off Norway, calling the government to
consider tax incentives to spur investments.

Penguins

You’ll have noticed AME’s main institutional investor is a Paris-based outfit call 4D. They have 2 seats on AME board.

http://www.4dgea.com/?section=3&page=fundallinone

This fund is also a big shareholder in Fortesa - a Senegal operator which suffered an explosion and fire before Christmas including couple of fatalities, at an onshore gas well which is still burning.

So perhaps 4D will be more cautious from now on and curtail AME activity.

9 years ago

November 28, 2011

The Kurdistan Workers’ Party, or PKK, killed three employees of Bermuda’s TransAtlantic Petroleum Ltd. in southeast Turkey late last week.

TransAtlantic Petroleum, based in Hamilton, said the attack “appears to be an isolated event” in a statement issued today [Nov 28].

The incident took place at its Selmo field in southeast Turkey, said the company, which owns oil and gas properties in Turkey, Bulgaria, Morocco and Romania.
Energy Minister Taner Yildiz told reporters that he talked with Transatlantic Petroleum’s representatives and that they would continue production in the region. An international firm had withdrawn in 1992-1994 following similar attacks, Mr. Yildiz told reporters in Istanbul without naming the company.

The attack with long-range weapons took place at about 10:30 p.m. on Wednesday [Nov.23] in the Kozluk municipality and also wounded an employee of the firm, the Batman province’s governorship said in a statement on its website.
The PKK is listed as a terrorist organisation by Turkey, the US and the European Union.

The recent report below refers to North Sea, but the White Paper implies it applies to UK Landward licences too.

"Oil and gas producers that fail to commit to reducing their emissions to “net-zero” could face being rejected for North Sea drilling licences.

The government’s new business secretary, Kwasi Kwarteng, said companies would only get government backing if they took decarbonisation “very seriously indeed.”

The news comes amid a mounting tide calling for firms to clean up their act, as the government looks for ways to hit its targets to reach net-zero by 2050. It said in last month’s energy white paper that North Sea licensing would have to fall in line.

The Telegraph reported Kwarteng said at the Westminster Energy Forum before his promotion this month: “All the conversations I’ve had with Energy UK and the Oil and Gas Authority, I talk about quid pro quo; something for something. That quid pro quo means that government support is only going to be there if they take decarbonisation very seriously indeed.”

The Department for Business, Energy and Industrial Strategy spokesperson said: “The Business Secretary rightly set out how our review into the future of the oil and gas licensing regime seeks to ensure it remains compatible with our target to reach net zero emissions by 2050. This commitment also forms part of the Energy White Paper published last month.

“We will agree a transformational North Sea Transition Deal with industry in the coming months to create jobs, retain skills and deliver new business and trade opportunities to support the sector’s transition to a lower carbon future.”

READ MORE: Government pledges airport support scheme following travel corridor curbs

Governments and campaigners alike have been putting pressure on companies to change how they do business with regards to climate change.

Last week, shareholders began to ratchet up demands for HSBC (HSBA.L) to back up pledges it made to reach net-zero by 2050. A resolution tabled by a group of shareholders noted that the bank has not made any specific pledges to reduce its funding for fossil fuels".

Yyami

It’s all in the mind

“In 2007 I made a bet with a fellow Russian businessman. The price of oil, he told me, would never drop below $80 again. This was the consensus among oilmen at the time. And that, I thought, was the surest sign that the oil price would soon start falling”.

https://www.letterone.com/news-insight/insights/tricks-of-the-mind-turned-oil-into-gold-mikhail-fridman-for-the-ft/

Desmond45

I dare say a lot of thought is probably going into the EWT programme and investors need to be patient - perhaps for weeks.

The approach in Zechstein dolomite reservoirs in Netherlands is to test each discrete fracture system in the Dutch equivalent to the Kirkham Abbey Formation first, rather than the whole pay zone in one go. With petroleum in both liquid and gas phase that complicates the procedure which will take more time, but is crucial in designing any more appraisal and development drilling.

From earlier RNS announcements Raithlin has cores, open hole logs and pressures to display fluid gradients. Along with a cased-hole pulsed neutron log, which provides water, oil, and gas saturations of the formation, I imagine we’ll see spiral perforations over selected intervals followed by a cased hole formation tester.

This is run on wireline and can be placed precisely at exact positions along the well bore and will allow specific fractures to be intercepted and tested with pressure testing as well as fluid sampling and flow rates.

The Netherlands approach is to use the sigma pulsed neutron (PDK) to help pinpoint the testing points. This needs to be done with significant accuracy paying attention to surface and cable head tension on all logging runs so that exact tension variances can be monitored to optimize the correlation between the PDK log and formation testing depths. Wireline creep at the testing depths can easily put the pressure test tool just ‘off’ - instead of just ‘on’ - the given fracture.

Of course, Raithlin may try various other testing strategies but the above is typical of Netherlands Zechstein tests.

Should be interesting.

Well said, Jack D

I’d add that a CPR should not be viewed as a more ‘correct’ or ‘better’ version than that of the operator. ‘Fiddling the numbers’ can affect any company - remember the Shell reserves scandal?

https://royaldutchshellplc.com/category/shell-oil-reserves-scandal/

Not just an innocent error but a very costly and damaging episode which ruined Shell’s “you can be sure of Shell” motto and damaged confidence in whatever the company said for more than a decade.

And ‘confidence’ is the key word.

When the stock market crashed in October 1929, so did public confidence in the US stock markets. Congress held hearings to identify the problems and search for solutions. Based on its findings, Congress – in the peak year of the Depression – passed the Securities Act of 1933. The following year, it passed the Securities Exchange Act of 1934, which created the Securities and Exchange Commission.

The main purposes of these laws was to enforce two common-sense notions:

Companies offering securities for sale to the public must tell the truth about their business, the securities they are selling, and the risks involved in investing in those securities.

Those who sell and trade securities – brokers, dealers, and exchanges – must treat investors fairly and honestly.

Although the modern ‘CPR’ is a relatively new procedure governed by the Society of Petroleum Engineers, it evolved from the scandals around crazy gas reserve claims in the late 1970s in Oklahoma and is cautionary tale of the Penn Square Bank, the oil and gas broker/lender in an Oklahoma City shopping mall whose collapse in 1982 staggered America's banking industry. The episode was the blue-print for the sub-prime mortgage scandal which led to the 2008 global financial crisis.

Usually, before a CPR is formally delivered to company directors there is an discussion to review any major differences. If the company disagrees with the CPR findings it is not obliged to accept the results, may not take formal delivery of any document. If it did, it would have to divulge the result to shareholders. And that undermines confidence in the company’s assessment.

For West Newton, even assessing petroleum in place is tricky, and assessing recoverable reserves will be subject to a wide range of uncertainty - which is ‘par for the course’ at this stage of appraisal. A CPR will provide investors with confidence - but not bigger or better returns.

Elon

There is Helium closer to home.

He1’s Tanzania project is certainly has potential although it requires a ‘heavy-duty’ approach using seismic & equipment more suited to oil/gas exploration. He1 would be first to admit geological, technical, project and commercial risks are quite high. The location is remote in an area where political risks have turned out to be a challenge.

Most blurb on Helium centres around the unique properties of the stuff and the pricing mechanisms, which today are controlled by the big retail and industrial gas supply companies such as Air Liquide, Linde, Cryoservice, BOC etc.

But the real value of helium in the last decade has been to fuel UK’s lead in the field of cryogenics which started near Oxford and now occupies a ‘cryogenic ‘cluster’. Siemens medical diagnostic machines have 25% of the global market and their main research site is near Oxford where MRI machines with helium cooled superconducting magnets were invented by Oxford Instruments and their use pioneered at the Royal Brompton Hospital in Kensington. Siemens is now experimenting with a 7 Tesla machine - probably the most powerful magnet in the world!

Here’s a presentation given 9 months ago at the last Cryogenic Cluster Day. This company seems to be exploring for helium close to demand for the gas using a very low cost, practical approach. They are also steering clear of the AIM ‘casino’ and raising money using a step-by-step approach.

https://stfc.ukri.org/stfc/files/ccd9/CCD9-006-N-Vanguard-HRL/

graking - look out for prospects in Turkey called "at tepe" -

Mirasol

I expect UKOG is waiting on approval to participate by GDPA - which does all the paperwork for the MENR.

Normal Turkish bureaucratic drag.

Has anyone assessed the consequences of the $5% collapse of the TL since the deal was announced?

Wizard

Thanks - point taken.

But, as we all know, politics trumps planning officer recommendations in controversial applications.

I’m all for exploration drilling, but all it takes is for a certain uber-conservationist in No 10 to speak to Boris and we’ll see government attitude change - rightly or wrongly - to garner more support for cleaner energy.

Meanwhile, behind the scenes, plentiful domestic and pipeline gas will keep us warm and supply electricity for the foreseeable future. Hypocrisy? Of course - there are always opposing points of view and it so happens UKOG’s business is on the wrong side at the moment.

Wizard,

Can you really put your faith in central government support for the Loxley project planning application?

If UKOG do not appeal, it follows that Loxley, and other onshore planning applications for oil and gas projects may be refused by local authorities without any fear of consequences or penalties against councils, based purely on rejection of planning policy technicalities.

If UKOG do appeal, will central government support the local authority planners on the technical aspects of the application? They probably will, but arguably, the higher powers that be will assert the development is not needed. After all, OGA has unilaterally ‘paused’ offshore licensing, has no plans for any future onshore licensing and has kicked off a ‘net zero by 2050’ energy policy. Public opinion gone green in all political parties too - which translates to votes in elections irrespective of which party.

And why is a development not needed?

Well, let’s assume the Loxley prospect holds 50 bcf. Assuming a production well yields 5 bcf that means 10 production wells on, say, a 10 year plateau period - or about 5 bcf/year total field production. But 5 bcf is less than 2 LNG cargoes PER YEAR delivered to an existing UK terminal, assuming a typical LNG ship carries ~3 bcf.

Last winter, higher levels of LNG were supplied to UK’s network when compared to the previous winter. In a typical winter, the inter-connectors from Belgium and Holland to predominantly supply gas to the UK to supplement UK North Sea gas production. Last winter (2019/2020) the large levels of supply from LNG, coupled with lower national gas demand due to global warming & renewables, reversed the trend. LNG is trading at about $7/mcf cif, so imported LNG is cost competitive.

Meanwhile, the Chief Engineer driving the UKOG Gravy Train goes full steam ahead as it heads toward the buffers. Toot toot!

Mike 007

It’s Jaffa Cakes all round and capachino with double shot.

Yesterday’s RNS really took the biscuit. In fact it was really scraping the barrel and makes you wonder what they do all day for their huge salaries.

“Our technical team continues to produce exceptional work, uncovering more previously unrecognised prospectivity in this under-explored part of the basin.”

Really? They’ve had the acreage since 2014 and reprocessed some 2D seismic. But a 3D seismic survey was acquired even before P2428 was licensed by Deltic. So why didn’t they use that?

Let’s hope Sneller becomes an ‘active’ shareholder and triggers some action.

Oil riches

You might be right, but I suggest you look at likely partners through an infrastructure lens. The dominant player in this part of the North Sea is the Cygnus group - Neptune Energy (operator, 38.75%), Spirit Energy (61.25%).
 
Gas is exported via a 55 km pipeline to the old Esmond area (next to P2428) where Cygnus gas connects via the Esmond Transmission System (ETS) pipeline to the gas-treatment terminal at Bacton. Neptune Energy has a 25% minority interest in ETS.

So when ullage is forecast in the Cygnus system the pipeline/terminal operators will rule the roost and start looking for new gas to maximise the value of the whole chain.

But all this will take years, which is Deltic’s Achilles Heel. I’m reluctant to wait another 10 years for something to happen with Deltic’s laid back attitude.

Peakview

The latest ‘update’ really isn’t news. The prospects mentioned have been known about for over a decade and described in Grandby’s relinquishment report.

https://itportal.ogauthority.co.uk/web_files/relinqs/p1333.pdf

The old prospects have been re-named and the Carboniferous play has been re-mapped to identify the Cupertino prospect.

Not surprised the RNS made no difference to the share price. Deltic held the P2428 area as P2261 from 2014 under the CNRL banner and even included it in their 2015 CPR (see Figures 5.5 and 5.6)

https://www.cluffnaturalresources.com/wp-content/uploads/2016/01/5-Axis-CPR-on-Southern-North-Sea-Assets-02-December-2015_Optzd.pdf

This is not to say the area is unprospective, but the update is really a re-hash of what has been known for years.

An ambiguous RNS in my view.

The well has found exactly what was forecast.

Gas shows in the Kirkham Abbey primary objective - same as in all gas wells in this area.

Non-reservoir in the Cadeby Formation? Once again, exactly as would be expected because the Cadeby Formation is an important aquifer, a lot is known about its properties from numerous abstraction boreholes. It has a low primary intergranular permeability of 0.01 m/d to 0.1 m/d but potentially high secondary permeability due to the presence of fissures and fractures. In other words, without fractures, neither oil nor gas will not flow in commercial quantities. But were there any gas shows?

Thanks FD. To most people working in UKCS GS's RNS falls into the "he would say that, wouldn't he" bucket.

Shell's capital allocation team in The Hague constantly review their global and UKCS portfolio, and identify which activities can be delayed with minimal value impact and regulatory fallout. Standard procedure in corporate planning and monthly management reporting.

Do you have any idea who is Canaccord's client behind the 10% voting rights and what are AIM/stock market regulations when 10% interest is reached?