Member Info for GreyPanther

Hi isdeer. I think you may be under-estimating the cost of a West Newton well at £3 million as that might just cover the drilling costs. Fully tested and completed it's likely to be significantly more, and it might be about £7 million gross. So UJO's 16.665% share of a B-2 well would be about or slightly more than £1 million. That's only my opinion, of course

A look at our SP this morning tells me all I need to know about the wisdom (or lack of it) of our Board's low ball" approach to Deltic Energy. What do our directors currently know about Deltic's assets - in any detail, that is - other than one or more of their offshore blocks having some Zechstein potential. I'm concerned that RBD's staff won't be any better at managing Deltic's offshore UK assets than they were at managing Corallian's. All we have seen there so far is disappointment with the Colter discovery in the longer term, some other dry holes, and a massive reduction in value for RBD. All IMHO, of course.

Hi royoboy. It's mentioned as a side track in the latest annual report which is good enough for me. So why the "?".

Hi there Mymine. If you read the Egdon and UJO RNSs, it was never going to be a horizontal well. They've only ever talked about a side track, I think. All the best, GP

Hi Mymine, Please see earlier comments - it's not going to be a horizontal well. The cost could easily be more than £1million, but we don't know yet. Also, we haven't been told where the new bottom hole / target location will be. it will have a big impact on the cost if the well is deviated by more than (say) a few hundred metres..

Hi Mymine. I'm probably splitting hairs here, but I don't think that Egdon and their partners are talking about a horizontal well at Biscathorpe. Horizontal wells are normally drilled from a point just above TD (total depth) in the original well. From various RNSs, I think Egdon and UJO are interested in drilling a side track well, which is slightly different. I think it would probably be deviated from a point higher up in the original (BIsc-2) well, so to get some distance away from it. So it might not be as cheap as a short horizontal section. A side track well will probably need planning consent from Lincs. County Council too, so don't hold your breath. You know how long these things can take.

Hi there Manwell02. Sorry to sound so clueless, what does the abbreviation "ELA" mean in "commission shares for the ELA" . Thanks, GP

Hi SecretBlueprint. Reabold holds (or will hold, when the OGA gives its consent) one interest in a production licence but it's only in WN where they already own a big stake in Rathlin, the operating company - as I'm sure you know. I assume it was that existing relationship that gave RBD the confidence to buy Humber's 16.665% equity stake. Otherwise, I don't know where they get their technical advice but probably they depend on having a good operator. That strikes me as a bit risky as there's no guarantee that your operator will only make decisions that suit you. Maybe it's different for Rathlin since RBD owns more than 50%, so they must effectively control it.

Hi Ponkey. I'd be very surprised if it was only because of UJO's Biscathorpe position. I think UJO's other projects are much better than Reabold's, but their 30% of Bisc. only represents about 2 million barrels of potentially recoverable oil for UJO, according to Egdon's March RNS.

Does anyone have a decent idea - even a mad hypothesis would be interesting - why UJO's market cap is about the same as Reabold's this afternoon? Surely we can't just put it down to our imminent Wressle production, or to the potential overhang of the RBD shares that Humber may be thinking of selling, especially as their interest in WN is more than 3 times as big as ours. I realise that a director's share purchase is a very positive sign, but is there something more significant going on that we aren't taking into account?

Does anyone have a decent idea - even a mad hypothesis might be useful - why UJO's market cap is slightly greater than ours this afternoon? Surely we can't just put it down to the potential overhang of RBD shares that Humber may - or may not - have sold, especially as our interest in WN is more than 3 times as big as UJO's. Is there something much more significant going on that we aren't taking into account?

It's all very well the BGS reporting a possible 8 billion barrels of oil in the Humber Basin. They may not necessarily mean that it's all onshore, or that it's all recoverable. The Humber Basin extends a long way eastwards from a relatively small area of Lincolnshire and Yorkshire into a much larger area in the Southern North Sea. Plenty of gas has been found in the adjacent SNS, but not much oil, other than condensate. Do you know if the BGS was talking only about the onshore part of the basin, and was it black oil in place or potentially recoverable barrels of oil equivalent (including the gas) they were referring to?

I don't think Humber has any of our shares to sell until the OGA has approved the WN deal. As far as I know, they are still awaiting OGA approval. Once it has been given we will presumably see an RNS from the company confirming the number of shares that have been issued to Humber

There have been a few comments here about WN being the largest UK onshore discovery made in recent years, so I thought I’d take a look at what’s been published so far. These are just my personal conclusions, in case you wonder, and I’m not about to compare them with Wytch Farm, Saltfleetby or even Biscathorpe. However, it might be worth saying that the onshore part of Wytch Farm alone was far bigger than any later onshore discoveries. In any event, West Newton is looking extremely exciting but, as yet, we only have some “initially in place” figures to go on. The numbers below were taken from RBD’s 11 Nov ’19 RNS, and I’m using their more optimistic “Upside Case”. In places the RNS refers to liquids (rather than oil) which may imply that condensate is also present. That wouldn’t be much of a surprise as not much conventional (black) oil has been found so far in the nearby Southern North Sea, but condensate is quite commonly produced with the gas there.
The upside case is 283.0 million barrels of liquid plus 265.9 billion cu. ft of gas, both of these being in place figures. You may well ask about the recovery factors. Unfortunately we don’t yet know, but we can probably make a reasonable guess. I'm using 25% for the liquids and 75% for the gas in what follows. These recovery percentages may seem a bit low but the oil and gas at WN are contained the Kirkham Abbey Formation of the Zechstein Group. The WN reservoir consists of limestones and / or dolomites, rather than sandstones as is more often the case in the UK. Using 25% and 75% gives us 70.75 mm bbl of potentially recoverable liquids plus 199.4 Bcf of gas. To turn the gas into an “oil equivalent” you have to divide 199.4 Bcf of potentially recoverable gas by 6,000 which comes to 33.24 mm barrels of oil equivalent (boe). The oil and gas together come to a total of 103.99 mm potentially recoverable boe. If you multiply this by RBD’s 39.656% indirect Rathlin interest plus the 16.665% they have bought from Humber, it comes to 58.57 MM boe net for RBD’s combined 56.321% interests.
That’s certainly not an amount to be sniffed at, particularly when you remember that we already have two apparently successful wells at WN. For the record, UJO’s 16.665% share would be 17.33 MM boe. Any constructive thoughts on my amateur calculations would be much appreciated. Thanks, GP

Hi Oiler87. Another placing? Good grief, I sincerely hope not! The last placing was only in April. Egdon also stand to get several £100k back from the Humber settlement, although I'm not sure we've been told what the exact amount will be. Maybe it will be in their final 2019-20 results for the year to 31 July. If last year is anything to go by we might see these in about November. But maybe you're right and they'll need more cash before then to complete the Wressle development. No doubt all will be made plain before we are much older.

Hello Heid. I'm glad you enjoyed my earlier posting. Maybe I should also post a version of it on Reabold's BB, edited to contain just my WN thoughts. ATB, GP

Hello Heid. That's really interesting. Like you, no doubt, I assume it will only be for a very good reason if another UJO placing occurs by Christmas. Who wouldn't like to be part of a successful placing, I ask? It's always nice to get shares at a discount, as some institutions are obviously ale to confirm. Can you tell us how we get on the Placing List? Does one have to be especially nice, or merely write glowing praise on the LSE BB to ensure our participation? Surely we will qualify!

HI spike501. I'd certainly agree that only "about a third of the risked value of WN has been assigned" so far, possibly even less. But what exactly is West Cadeby? I know we are meant to see the Cadeby formation in the next (B-1) well, and it's been written about here. I believe it's present in all or most of the previous wells in the area and oil shows have been mentioned previously at WN. Can I assume that West Cadeby is something new? I assume any reserves found in it will be additional to those we already know about in the Kirkham Abbey formation. Any thoughts?

There have been a few comments here recently about Biscathorpe being the largest un-appraised UK onshore discovery. Rather than assuming that’s the case, I looked at what’s been published about both Bisc and WN and I thought I'd share my conclusions if you're interested. I’m not comparing them with Saltfleetby or Wytch Farm, although I worked on both for a while in the 1990’s. Even the onshore portion of WF’s original reserves went way beyond any of them. Regarding the actual figures, it’s worth pointing out that we only have oil and gas IN PLACE figures for WN to compare with Bisc’s prospective resources. I’m pretty sure that the term “resource” for Bisc means they are talking about potentially recoverable oil, so we aren’t yet comparing like with like. The numbers for Biscathorpe were given in Egdon’s 30 March ’20 RNS, and for WN they were in Rathlin’s 11 Nov ’19 RNS. Please note: I used the operators’ more optimistic upside cases for both discoveries.
For Biscathorpe the upside case prospective resource for the Westphalian reservoir was estimated by Egdon to be 6.69 mm bbls. In addition, the upside case Dinantian oil in place was estimated to be 36 mm bbl. I’ve no idea what the Dinantian oil recovery factor might be, but it probably won’t be very large as the Dinantian reservoir isn’t usually very porous. So let’s say that Biscathorpe is 6.7 mm bbl x UJO’s 30.0%. This comes to about 2.0 mm bbl net recoverable for UJO, plus whatever they can get out of the Dinantian.
Rathlin have published a WN upside case of 283.0 mm bbl of liquids, plus 265.9 Bcf of gas. Both are in place figures. What about the likely recovery factor, you may well ask. Unfortunately we don’t yet know, but we can probably make an educated guess. Let’s say that it might be 25% for the liquids and 75% for the gas. These may seem a bit low, but the oil and gas at WN are in a Zechstein carbonate (limestone and / or dolomite) reservoir, rather than in a sandstone as at Biscathorpe. So if you use 25% and 75% you get 70.75 mm bbl of recoverable liquids plus 199.4 Bcf of recoverable gas. The gas is equivalent to 33.24 mm barrels of oil equivalent (boe) which you get when you divide the 199.4 Bcf of potentially recoverable gas by 6,000. The oil and gas come to a total of 103.99 mm boe. Let’s call it 104 million. So, if you multiply that by UJO’s 16.665% it comes to 17.33 MM boe net for UJO.
So Biscathorpe is certainly very interesting at 2.0 mm bbl net recoverable for UJO, but it’s a lot less than the 17.33 MM boe net that UJO might have in WN. I certainly know which of them I would rather have. This is even more the case when you remember that we already have two apparently successful wells at WN, but we'll need a side-tracked well at Biscathorpe to prove up the resource. Any constructive thoughts on my amateur calculations will be appreciated. Thanks, GP

HI BlackHopper. By 'throw money' I was referring to Corallian, not WN. I'm sorry for not being more explicit, since I'm more than happy with our investment in the latter ….. so far.
All the best. GP