Member Info for Exploration

Grey Panther,

I do agree that while Canadian geologists are experienced with carbonates reservoirs - you and I know these are 99% pinnacle reefs - not present in UKCS. Yes, there are fringing reefs in the North Sea, but there are various carbonate ramp features similar to the Cretaceous Sligo and Edwards plays in the the Gulf of Mexico. The West Newton Magnesian Limestones are not renowned for their permeability and the discovery of an oil leg was a bit disappointing because gas will flow much better than oil - time will tell. I suspect Deltic has grounds to question West Newton’s viability until more is known from the EWT. A poor well test is a distinct possibility and might undermine the commercial logic as seen by aDeltic shareholder

CLNR - now Deltic - kicked off its early UKCS applications with two play concepts. One was the unexplored Zechstein play and the other was the emerging carboniferous play.

The Zechstein play was based on legacy seismic, previous drilling and analogues overlooked by others. Many geologists brought up in the UKCS, view carbonate plays as ‘too difficult’ - which is odd, since 66% of global reserves are in carbonate rocks. But not Shell, which is what attracted them to CLNR farm in.

The whole point of the original CLNR strategy was to prove the Zechstein play was extensive and may even have another 5 or 6 tcf yet-to-find in the prospective trend. The other CLNR line of evidence for both oil and gas is an oil prone petroleum source deep in the Carboniferous, rather than the traditional Westphalian coals which generate dry gas.

In the recent gas/oil discovery at Darrach in 43/4 the ‘oil’ is probably retrograde condensate, similar to Breagh. Other companies such as Simwell have licensed the Zechstein play in Q42/43 and conducted 3D seismic.

While local examples of production from the Zechstein Carbonates in the SNS (Conoco well 41/24a-2z reported to have flows at 100 mmscfd from the Plattendolomite) and onshore UK (Eskdale and Lockton gasfields).

The best developed examples of the Zechstein Carbonate play are located in eastern Netherlands, Germany and Poland. The key proponent of the Zechstein Carbonate Play in the Netherlands is NAM (`Shell) which has discovered of 20 gas fields with cumulative gas reserves of approximately 2.5TCF over the last 40 years. The Drenth Zechstein Complex alone has over 3.5 TCF of gas in place excluding the Tertiary aged Coevorden and Permian Groningen fields. This experience has led to the development of a predictive model based on 3D seismic data which uses a combination of isochore mapping to define the transition zone between shelf and basin along with fracture mapping which indicates enhanced reservoir characteristics. Finding the pervasive fracture systems in Zechstein play is the key to commercial production which Deltic understands in detail.

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

Ocelot

SS replacement?

It hasn’t been the same since Captain Ramptastic was running the UKOG show. He got it right - accumulate PIs cash and move to Monaco. The former patron saint of AIM would like to let shareholders who have lost a fortune in UKOG, Polemos, Doriemus, Angus etc, etc that he shares your pain. Have you seen those investment warnings about something which seems too good to be true?

Penguins

Salt Water Disposal (SWD) in North American shale plays can eat up 65% of operating costs. It’s become a serious problem in recent years in the Williston Basin where unstimulated horizontal wells flow naturally from natural fractures in the Lodgepole Formation - more or less similar to the micrite bands in the Kimmeridge Formation. In fact SWD is roughly same volume of produced oil in N Dakota - that’s 1 million bbl/day to ship and re-inject to SW disposal wells. Lack of SWD could kill the economics of the Weald Basin Kimmeridge Micrite play. Answers on a postcard from SS?

Wizard

Greenpeace’s £80,000 fine for the BP demo will be regarded as money well spent - but why?

There is no doubt that the swampies at HH and the Greenpeace lot on BP’s oil rig broke the law at should pay a penalty. But paying penalties is part of their cost of doing business and always has been since the inception of Greenpeace. It was started by a couple of Canadians to stop US underground nuclear tests on an island in Alaska, spread to stopping atmospheric tests by the French in the Pacific and ultimately preventing the deep sea disposal of Shell’s Brent Spar in the 1990s.

Greenpeace is a huge global organisation of regional branches with an annual budget of at least $500 million. Greanpeace’s business model is based on the comparison of two values. `The first is ‘Willingness to Pay’ and the other is ‘Cost'. When WTP > Cost they go ahead with high-profile projects/demonstrations. Willingness to pay is assessed by;

1) How much impact their demonstration their BP demonstration made in the news.

2) how much their donors are prepared to give to support a cause. They even have a code of conduct + risk assessments of their demonstrations.

Greenpeace is financed by inheritance trusts and individual donations and refuses finance from governments and businesses.

The same WTP > Cost equation of value applies to the HH mob and anti-fracking people, but on a smaller scale.

Wizard

I've never been to IoW and live in France where I manage my investment company.

I do my own research on all my investments an own UKOG as an 'entertainment' investment.

I certainly is a circus featuring all sorts of clowns.

But; unlike France where there is moratorium on all onshore drilling, HH has a chance with the appliance of science whereas IoW project is a 'dog' in professional investor vernacular and in a different basin. There are 10 dry holes in IoW - UKOG will likely add another unless the fiasco is stopped.

Commercially, UKOG could benefit by relinquishing the IoW PEDL, save the money and concentrate on decoding the geological mysteries of the Kimmeridge limestone play which has many similarities to the Paris Basin.

Wizard

There's more oil on my garage floor than at Arreton. Most geologists would agree and I can't imagine OGA would concur - simply not worth 'appraising' an oil show in a non-reservoir. So you shouldn't bank on government support, unless you believe they encourage drilling dry wells just because of planning procedures.

Wizard - for every supporter on the IoW planning website there are now 20 objections. Your 'support' campaign is provoking the opposite reaction to your intentions.

There is an interesting debate in Isle of Wight local papers, including contributions from experienced petroleum geologists, questioning why on earth UKOG is drilling this well because there may be shows, but no reservoirs capable of production. Frackfree IoW has an interesting video which concludes SS is only promoting the project to collect another bonus. If the planning application is thrown out that's half of UKOG's prospective resources down the drain. PI's should stop SS wasting more of their money on drilling no-hope wells.

Wizard

There are now nearly 300 public comments with seven objectors for every UKOG supporter. I think supporting this is a lost cause despite your valiant efforts.

After this week’s series of disasters why encourage PI’s to waste more money on another dry hole on IoW appraising an oil show in a tight carbonate reservoir? UKOG has even called it a 'discovery' which violates the SPE definition. Acidizing won’t help - look what happened with UKOG’s acid job at Broadford Bridge which made things worse, not better.

Let’s save every penny rather than watch the company throw shareholders cash at a carp project at Arreton, pump up the SP and justify high salaries to the BoD.

Shell announced $22 billion of write down today - wonder is DELT's projects took a hit in the process.

Wizard

Thanks

All Planning Committees have detailed terms of reference specifically restricted to the Council concerned. So all the letters of support from UKOG shareholders which mention the National Interest for oil production' just go straight into the 'irrelevant' waste bin which is where UKOG's application will end up if you are not careful.

Typical terms of reference;

To exercise the powers and duties of the council, within the corporate policies and strategies of the council, in relation to:
• Its role as planning authority in its development control and planning functions, and
• The extraction of minerals, the clearance and reclamation of derelict land, subsequent after use of sites for waste disposal and restoration of site

Wizard

I looked at today’s contributions to IoW planners from all over UK. I don’t think IoW planners will pay much attention to these letters of support most of which say UKOG are good guys, UK needs oil and drilling will bring better health, increased wealth and, no doubt happiness to the island. In short, it doesn’t enhance UKOG’s reputation and serves to polarise opinion.

One of the reasons for today’s planning disaster in Surrey came down to politics, because UKOG’s management had not ‘rolled the pitch’ adequately despite their long association with the county. Councillors take their constituents’ views into account when reviewing the technical aspects of any proposal which is something planning officials cannot do.

If you look at IoW’s local press, there is a vigorous and well-informed debate going on regarding pro’s and con’s of UKOG’s proposals. I cannot find anything in the press over there from UKOG itself so I suggest shareholders contribute. Example; https://www.countypress.co.uk/news/18499804.wight-black-gold-adds-value-island-economy/ - see especially comments on the letter.

This is really Matt Cartwright’s responsibility since he transferred to UKOG as part of the Northern Petroleum deal of which IoW was a part. He’s supposed to be Chief Operating Officer and get sites permitted well in advance of drilling.

Benkelly2010

There are a few gas pipelines already. No need for ferries is IoW field is as big as CPR claims

See video;

https://www.youtube.com/watch?v=lwbcxq6Hw2A

Wizard - keep up the good work

What do you think about this planning condition?

https://publicaccess.iow.gov.uk/online-applications/files/97BF9B751475EA09E80E7829189D59D7/pdf/20_00513_FUL-GURBANAS-2844709.pdf

https://www.countypress.co.uk/news/18507378.say-oil-drilling-plan-arreton/

https://www.countypress.co.uk/news/18499804.wight-black-gold-adds-value-island-economy/

Robone

Isle of Wight project - UKOG’s nemesis?

More often than not, objections to planning applications for onshore oil exploration are based on challenges about noise, traffic and so on. In recent years climate change has become another objection. Responsible companies like UKOG actively engage in the consultation phase to take local stakeholders concerns into account While UKOG’s core activity should be finding and producing oil, they have developed considerable skills in make planning applications. But in this case UKOG may be vulnerable for another reason.

The recent application to appraise Arreton is attracting a new form of objection. A local action group has taken all UKOG’s facts and figures and poses the question ‘Why is UKOG is bothering to drill at Arreton at all?’ Their conclusion is that it makes little commercial sense and asserts UKOG’s principal activity is to attract investors’ cash to pay UKOG’s staff - especially the CEO.

The basis of their objection to the Arreton application will likely be ‘wasting planning officers’ time’ which is a legitimate method to kill off planning proposals before they go too far. Dealing with the Arreton application will be costly for cash strapped local authorities who need to deploy their staff on realistic developments.

See April 2020, Presentation #3 on this link below - the relevant part questioning UKOG’s motives is towards the end.

https://www.frackfreeisleofwight.org/presentations

See April 2020, Presentation #3

https://www.frackfreeisleofwight.org/presentations

Useful analysis of Algeria’s declining gas export capacity. I guess this will add pressure on Rabat to accelerate Morocco’s LNG import plans.

https://www.oxfordenergy.org/wpcms/wp-content/uploads/2019/10/Algerian-Gas-in-Transition-NG-151.pdf

Audible, here’s a link to ONCF’s detail on the railway.

https://en.wikipedia.org/wiki/Oriental_Desert_Express#/media/File:Rail_network_in_Morocco.svg

I-man

It was Audible who brought up the suitability of local roads and use of trucks for LNG. That was based on my rough calculation (below) that a fleet of trucks would have to operate 24/7 to cope with 10 mmscfd.

“10 mmscfd produces 125,000 gallons of LNG per day via a cryogenic distillation plant which also knocks out the CO2 from the wellstream. That needs ~10 road tankers per day assuming 14,000 gallons/tanker as a continuous operation. The trucks would be fueled by LNG which is a fairly simple conversion to a regular Diesel engine”.

Audible is correct and this implies trucking could support very modest flows of perhaps only 2 mmscfd which is hardly economic. I’d omitted the presence of condensate, which also needs to be exported to a refinery and was conveniently ignored in the original pipeline gas export scheme from the TE-5 field. The micro-LNG plants need power to run the compressors, but this is fueled by processed dry gas prior to compression. A 1 mmscfd micro-LNG plant consumes ~ 200 mcf/d - or about 20% of wellstream gas.

So your suggestion of a short pipeline to the railway near Tendrara makes sense. That way, gas, water and condensate can be piped as a multi-phase fluid and separated at the railhead. The condensate would then go in tank rail cars to a refinery and the gas liquified for transport in insulated tank cars to point of use. There has been a big squabble between pipelines and railroad operators in USA this year about LNG transport by rail, although it is fully regulated in Europe.

Bottom line for our leaders in Sound is to demonstrate the economics of a range of schemes, I suppose.

For the cryogenic plant I don’t know the price, but since it’s a stop-gap prior to full field development its not the sort kit Sound would want to own, so like all things in the oilfield, rental is a better option. Obviously there’s some site costs at the well head, but I expect the ‘Wacky Races’ team can do the concrete bases, fencing and so on. The transport tanks are cryogenic and come as trailers ready to hook up to the customers’ regas facility and they can be rented too.

The other benefit is that the production from existing wells will provide a clue about their long-term performance prior to drilling of full field producers.