Member Info for GreyPanther

Hi Manwithplan - I wouldn't say 35° API and 33-34° API oil is heavy. It's medium gravity and fairly similar to oil being that is produced by Egdon at their Keddington oilfield only about 9 miles east of Biscsthorpe.

Hi Manwithplan - In answer to your question yesterday about not having heard back yet from the "super duper lab" in Norway, there was a UJO / Egdon RNS on 15 July which reported on something similar. It all sounded pretty promising at the time, though I don't think I've read any more since then. It mentions "Applied Petroleum Technology (UK) Ltd". APT may possibly be the lab in your post, as I think they have a Norwegian lab where the research work is done.
"Union Jack …… also appointed independent geotechnical consultants, Applied Petroleum Technology (UK) Limited, to perform a detailed geochemical analysis of drill cutting samples taken from 20 intervals in the Biscathorpe-2 well, comprising five from the Westphalian and 15 from the Dinantian. The objective of the APT analysis was to provide geochemical evidence for the presence of live hydrocarbons together with an estimate of the likely oil quality (the “APT Report”).
The APT Report has confirmed the occurrence of hydrocarbons in the Westphalian and Dinantian cutting samples analysed from the Biscathorpe-2 well. The APT Report also confirmed that the data supports the existence of a significant column of good quality oil (high API gravity), within the Dinantian, validated by the presence of a full suite of gases
ranging from methane to pentane (C1 to C5 and nC5) recorded during drilling, all indicative of a working petroleum system in close proximity to the Biscathorpe-2 well.
A sample of oil from the nearby producing Keddington oilfield to the east of PEDL253, was analysed as a benchmark for comparison with the hydrocarbons extracted by APT from the Biscathorpe-2 cutting samples.
The key results contained in the APT Report are summarised below:
? Good quality hydrocarbon extracts were obtained from the Westphalian and Dinantian cuttings samples
? All hydrocarbons extracted appear to be non-biodegraded
? The hydrocarbons extracted are comparable to those extracted from a known oil-bearing Westphalian interval (Keddington oilfield)
? APT confirmed the likely presence of a live oil column in the top of the Dinantian interval from approximately 1,980 metres to 2,015 metres (35 metres), with likely residual oil below
? Data evaluated at the base of the analysed section, and wellsite gas readings, are also suggestive of possible additional hydrocarbon pay below 2,133 metres
? API gravity results in the Biscathorpe-2 well intervals were as follows:
Westphalian interval
35° API
Dinantian interval
33-34° API
The results of the APT Report together with re-processed 3D seismic data will be integrated to inform the direction of any potential future side-track of the Biscathorpe-2 well that would target the Westphalian and Dinantian." Some further text followed this.

That's C*A*L*I*F*O*R*N*I*A* J*O*E n case you haven't guessed

Has anyone read what ************** has written today? There's something there that doesn't seem quite right to me - "WNA2 was successfully drilled before being perforated into what was believed to be a gas zone" By the time the well was perforated for the EWT they had already run all their fancy neutron logs. I thought these logs were meant to distinguish between water, oil and gas. They certainly got the logs, so they must have known what they were perforating into. Can the EWT results really have been a surprise in that they apparently found oil? Any thoughts welcome!

MIxster - I'm not sure I remember everything exactly that I was told, and it didn't amount to anything very substantial. I was at an investor presentation where one of the Bisc partners was present, Egdon maybe. They seemed willing to chat and I should have asked them a few more Q's. I wish I had asked them more about what really concerns me now, the WN EWT. However, I don't think they were involved in it.

Hi Mixster. I recently spoke to a guy who was involved in the Biscathorpe farmout negotiations. He said the "% shares of the well costs" shown in Egdon's RNS were definitely "one offs". On top of UJO paying 24% to earn 12%, the second set of % figures also takes into account £300k of cash payments (being 30% at £10k per 1%) paid by UJO / Humber to Egdon / Montrose. UJO bought a further "un-promoted" 10% for £100k, giving them 22%. Humber bought their 20% for £200k. Humber were actually meant to pay £200k plus 20% of the well costs. After the well was drilled everyone was meant to go back to paying according to their new working equities (eg. UJO: 22.0%; Humber: 20%). With hindsight, Humber seem to not to have paid their bills on PEDl 253, which is why UJO will go up to 27.5%. Having probably paid an extra 5.5% of the well costs, they will be paying only 27.5% towards future costs. Well, that's how it was explained to me since I couldn't get my head round it at the time.

Sorry Mixster, I should have said "UJO then purchased a further 10% from Egdon / Montrose (at £10k per 1%"

Hi Mixster: When you say "Humber & UJO have a higher percentage of the costs currently" are you assuming their promoted shares of the costs will continue in to the future? I don't think it will once all the well costs have been paid for, and I reckon the well cost carry arrangement should now just about be finished. Looking at all the 2018 RNS's I think UJO paid 24% to earn 12% (7.2% from Egdon and 4.8% from Montrose). UJO then purchased a further 10% from Egdon and 10% from Montrose (at £10k per 1%) so they actually paid 34% for 24% plus £100k. It seems that Humber's entire 20% was obtained by buying it for £200k from both Egdon and Montrose. I therefore think the Bisc-2 well costs were paid as follows: Egdon: 28.6%, Montrose: 17.4%, UJO: 34.0% and Humber 20.0%. Whatever the previous situation really was, I reckon UJO will see their share in PEDL 253 increase from 22% to 27.5% (f they pick up a proportionate share of Humber's 20%. Does this make sense?

Hi there mixster Can you elaborate a bit on "UJO 27.50% 51.56% " please? I get the increase to 27.5% as a result of the Humber default (up from their current 22%). Your 51.56% seems a lot too much to me, and I think they paid 34% of the cost of Bisc-2 for their (then) 22% interest. Now that been done, surely their share of the costs going forward without Humber will be only 27.5%? Have I missed something here?

Hi boom.boom As you suggest, for Humber to stay in the WN project they will need to raise about £3 million if they reduce their interest to (say) 10%. This is based on the £5 million raised by UJO for their 16.665% interest, though maybe not all of it was for WN. To get £3 million for the sale of a 6.665% interest doesn't seem all that demanding, IMO. It would place a value of only about £45 million on the whole project, so it ought to be "do-able". Even so, I doubt it will be UJO that buys it. Their £5 million placing doesn't seem big enough to do this too

Mirasol Good point, thanks.

I've seen somewhere that Humber's WN interest is up for sale, maybe on this BB a while back. I assume they wouldn't be allowed to sell if they are in default at WN as their interest would have to go to the other partners (Rathlin & UJO). At Wressle, I think we can probably also be fairly sure thatthey aren't currently in default. Egdon would probably have been obliged to say so in their annual results RNS. They talked only about Humber's Biscathorpe default (then).

Hi Backwoodsman You asked: "As Humber have defaulted on Bisc does the recent placing account for that? Are UJO’s increased costs factored in? Likewise with WN - is a Humber default factored into to costs"
At Biscathorpe UJO will probably have picked up an extra 5.5% of Humber's 20% cost share. Wells there are probably coming in at about £3 million each, so it would probably only mean finding an extra £165k plus a similar / smaller amount for the possible sidetrack, so I would guess that can be easily taken care of. West Newton is another kettle of fish. We don't know if Humber are in default there too …. yet. If they are, then UJO will pick up about 1/5 of Humber's 16.665% share of the costs, about an extra 3.33%. If two more wells are drilled at (say) £6 million each, then UJO would have to find another £400k, plusany EWT costs. So I would guess that UJO will have allowed for it in the £5 million placing

Egdon's share price has been a disaster since the Government's so called moratorium on shale gas. Maybe they ought to diversify away from it and move a lot more towards conventional O&G. In terms of making progress in the conventional O&G direction, I don't think they have enough cash to buy out any of Humber's licence interests, certainly not West Newton. They had only about £1.6 million cash at their 31 July year end, so it must be quite bit less than that by now, considering their overheads. Maybe they will need to fundraise, just like UJO? I'd really like to know who they have farmed out their Resolution prospect to, though it's not a done deal as yet. Thinking about Cluff's recent RNS, could it be Shell?

Kayaks and Olly. Thanks, that's really interesting. It seems odd that there are several quite old, nearby Zechstein offshore gas discoveries that haven't been re-examined until quite recently. Has West Newton given them a favourable wind, I wonder? Maybe they were previously thought to be too small and so not economic to develop. But could they perhaps now be developed from onshore by Egdon (and whoever they farmed out to)? The Resolution and Endeavour blocks (41/18, 41/19 and 41/24) aren't very far to the north of West Newton and they are very close to the coast. Immediately offshore from WN are Quadrants(?) 46 and 47 most of which don't seem to be licenced in near the coast. On doing a bit of research I found out there may be three potential Zechstein reservoirs offshore, all of them "carbonates" (limestones or dolomites). These are the Zechsteinkalk (or Cadeby), Hauptdomit (or Kirkham Abbey), and Plattendolomit (or Brotherton) in ascending order. The Cadeby and Kirkham Abbey are targets at WN, but could the Brotherton be of interest too? I think the Zechsteinkalk / Cadeby has produced commercial gas at the Hewett field, not far away in the SE part of Block 48. All food for thought, I guess.

I've been thinking about who gets what if Humber goes into default at WN too. At Biscathorpe the process has already started. Looking at the notes to Egdon's recent accounts, it seems that Humber are still in default. The other three partners have presumably been paying Humber's 20% share of the bills between them since the default first happened. If that is the case, the non-default partners will each see their Biscathorpe interests increase by an amount equal to 25% of what they currently hold This is based on Humber's 20% in Biscathorpe divided by the other partners' collective 80%. Presumably this will only happen if Humber's default isn't remedied. I don't see how it can easily be remedied unless Humber sell something valuable, maybe their West Newton interest?. If a default happens at WN too, Humber's 16.665% would probably be split pro rata by Rathlin and Union Jack, so their interests would become about 80% and 20% respectively. Humber could lose everything and Rathlin and Union Jack would only pay the defaulted amount and all costs going forward.

Hi Olly: In UJO's 11 November RNS David Bramhill said"We are looking at an onshore project with potential offshore resources ….." I briefly wondered what he meant by "offshore resources" but concluded that he meant "offshore SIZED resources". If you look at the WN prospect "blobs" on UJO's website it's pretty clear the undrilled prospects are restricted to the onshore area. The adjacent area in the Southern North Sea is un-licenced, and there's no evidence on the OGA's published maps that any offshore seismic data has been acquired there over the last few years. Mind you, they could be keeping it "under wraps" but if that's the case I don't know why DB would say what he did.

I'd be extremely surprised if a UJO director had leaked sensitive information about a possible placing. What would be in it for them except to p*ss on the share price, and then getting the sack if they were found to have done it? It's more likely IMO that someone, maybe a
small stock broker or finance house, was shown this information by a Nomad or UJO's own stockbrokers with a view to finding people who would take up some of the share placing. This should have made them" insiders" but clearly they did not respect this convention, which is usually regarded as a binding agreement. Apparently not everybody plays by the rules, but I wouldn't necessarily be blaming UJO. Let's hope they will keep the culprit(s) out of any future deals.

Hi Olly - By EDR picking up Humber's stake do you mean in West Newton or B'thorpe / Wressle? I'd say there's not much chance of it happening at WN as Egdon have only about £1 million in the bank, so they couldn't afford to do it. At Biscathorpe the process seems to have started already as it looks as if Humber are still in default. The other three partners will presumably have been paying Humber's 20% share of the bills between them since the default. If that's the case the non-default partners will see their interests increase by about 25% in due course. EDR would move from 35.8% to 44.75%, UJO from 22.0% to 27.5% and Montrose Industries from 22.2% to 27.75% and it wouldn't be a bad thing, IMHO.

Hi here Mirasol Thanks for your helpful (17.26 on Weds 20th)posting . Can I ask you another Q. about the default arithmetic? You said ".. in this case the Humber 16.6667 % will be split 2/3 Rathlin and 1/3 UJO - so that's an extra 5.555% to UJO and 11.1111% to Rathlin" That doesn't seem quite right to me, if I may say so. If there is a default by Humber shouldn't all the other partners split the Humber % in proportion to all the remaining (Rathlin & UJO) licence holdings?
Rathlin: 66.67 / (66.67 + 16.665) x 16.665% = 13.332% (or about 4/5) and
UJO: 16.665 / (66.67 + 16.665) x 16.665% = 3.333% (or about 1/5)?
I think this would give Rathlin: 80.002% and UJO: 19.998%, or have I got it wrong? Anyway, maybe I'm worrying about nothing if the remaining parties only have to pick up the extra shares of the costs going forward after Humber leave the licence without reimbursement…. if they do. There are some rumours going around that Humber have hired a consultant to sell their interest for a very good price. I'd really like to know to who(m)! Have a good weekend.