Member Info for HopefulDave

Sounds to me as if something is being flowed back...... <cough> didn't somebody mention that possibility <cough>

I remember this from the 21st....

“OMG
Next thing HopefulDave, will RP turn the water into wine ?”

Apparently he can....

And I know I said I didn’t expect a separate revenue stream from the water, but appears that might be the case moving forwards. Anyway as I’ve stated. Water costs are one thing. The ability to continue fraking without water shortages is another, that is another added value on top of not shelling out for loads of fresh water / costs of disposing it are reduced in the future.

Love the fact once again you look to negatives in something that could be hugely beneficial to the industry in general. And this is a result of “our failure” - I guess if Robert is responsible for the drought then it’s you suggesting he’s a
god not me...

Alternatively maybe they are once again at the forefront of pushing new technology and introducing something else beneficial into the Denver basin...

And if you must know I do mail the company with awkward questions constantly, most of which can’t be answered due to commercial sensitivity.

Anyway. Not going to detract another potentially very positive development into a “we have failed to deliver debate”

There is a drought. Deal with it! It’s not Highlands failure to deliver, it is every frak operation in Denver and some
surrounding areas that are struggling.

Again. An issue in the oil gas industry, which we appear to be piloting something that could have huge benefits to the industry, the environment and importantly our bottom line revenue generation (depending on what kind of tie in / benefits we get from this) moving forwards.

Once again. - supplying our own nitrogen has ALWAYS been a plan read the prospectus from 2016.
Once again - a drought impacting every frak operation in Denver and surrounding areas is hardly “our failure
to deliver” - it’s called bad luck. - But we have once again looked to find a solution for this problem, and again as I’ve stated, one which could benefit us greatly in WD.

I would imagine doing this pilot will put us in a great position to benefit from its use in WD, as we should have a good working relationship with the manufacturer of these units after this pilot.

JH. Montana to Denver is approx 10 hour trip by tanker.

For Montana (Helios) this could be very useful kit as could be used to treat the water from Muddy and then instead of evaporation ponds could use the water (sell it on) or dispose of it far easier and quicker?

With regards to Denver use.

Positives:

Drought. - Re using water = water availability, no disrupted frak operations once committed to it. Imagine how much this delay has cost True / Haliburtons in getting the wells online? It’s cost us in revenue delayed, but they footing the bill for the well drill and completion and are not receiving $ despite committing the drill and frak crews etc.

The ability to stick to plan to a company like Haliburtons is massive, we have a drill on site and frak crews about and they had to stop due to no water, that would have cost them $.

Move this forward to WD.

48 wells * 110,000 bbls water (2,000 per 55 frak stage) = 5,280,000 barrels of water.

I think the cost in Montana was listed at $2bbl for fresh water, but how much does it then cost to take away the dirty water and treat it?

Imagine WD with 48 wells and the ability to use multi well pads (as we will have) and drill and frak simultaneously (different pads) and alternate that. If you can save circa $4 bbl on water then that’s a $15m cost returned (assuming 80% re-used) and initial water supply.

And more to the point it would ensure smooth frak operations without water supply issues, and therefore risk of cost overrun is dramatically reduced)

+ it stops the locals getting peed off with water consumption by the industry when severe drought conditions are ongoing.

Other benefits? Reduced cost of wells = potentially more retained % (if 110,000 bbls cost $4 that’s $440,000 per well) or nearly 10% of its pure drill and frak cost)

Or if we are tied in and have a deal to supply the water ourselves that’s potentially a lot of revenue to be made.

Again. More for the future stuff and unless more units are deployed (now in ED) then can’t see it currently producing a vast amount of water to speed up our ED wells, but the RNS said they had sourced more water to get going there...

It could be we bring online the first 3 wells, clean up the water from them, and ultimately use some of that for the later fraks. The two units can produce up to 500bbls a day combined if I read correctly so that’s not a vast amount (4 days to get one frak stage) but modular design = ability to scale up. So unless we deploy more to site we won’t be supplying enough water to make a huge difference with the current ED frak operations, but they sourced more water there so hopefully hear the other 2 wells are frakked before long.

Funny that JJAL was laughing about water as a revenue stream, and some use a $4 bbl oil revenue with our 7.5% in ED and yet we could ultimately get that same amount from the water recycling.. lol

Morning, just checked my bank account and my payment from rampers dot com hasn’t gone through yet. Is everyone else’s the same or is it just me?

Oops I should have posted that under a OneGayGuy1 user name.

Must be getting close to news if these “pack attacking me” messages are surfacing again!

Just in case anyone has any investments in St Lucia Tropical Storm Captain James T Kirk passed last night and I’m still here.

So that’s covered the paid rampers bit, and the weather report.

And I’m sure you’ll be able to return sometime soon if things go well here!

Ah nice. Which one, we stayed in le toc for 7 nights and grande now for the last 9.

It is very nice.

Still on them. 16 nights in St Lucia, coming to an end on Friday.

Hopefully end of this month and next will provide the lift off here and start the process towards a lifestyle more accustomed to what I’ve been doing last 13 days!

I’m sure my figures aren’t 100% correct! :) if oil keeps on rising might be a little higher :)

I’m sure it can be explained better by an accountant who is good at turning bean counting speak into easy to understand for all English.

I’m not that person however.

It just does what is says it does!

It makes little real sense unless you understand corporate p&l and accounting practices really, but if you read the accountancy practices on why do it and what the process is etc .... You can then see we have followed the process professionally and correctly, and the stated intention as to why doing it, sworn in statements as to why and then gone for Court approval as per the process.

It’s an accounting practice. As stated in the RNS.

“In summary, the effect of the reduction of capital is to create distributable profits on the balance sheet of the Company. The Directors believe that, subject to the future performance of the Company, this should give Highlands the ability to make distributions to shareholders in the future, as and when the Directors may consider that it is appropriate to do so. However, the Directors cannot give any guarantee that the Company will make any distributions, or provide guidance as to the size of the distributions if any are made.”

IMHO. We won’t be paying dividends until 2020+ time ish. Far to early to be thinking about receiving anything dividend related right now.

Capital appreciation (share price increase) is the current investment, as it’s likely that any profits (even if large) from Kansas would likely go back into further asset expansion (more wells, Helios / advancing other plays etc)

But it does provide the opportunity, should we spin off any particular arm of the business at any time (just for argument sake say we proved up WD then sold the whole thing on for a chunk of $ straight up) that then they could pay a special dividend out or something.

Again. Imho. I don’t think it’s likely anytime soon (but never say never!) and it’s probably more to setup the company as one that is capable of paying dividends should the opportunity arise, as opposed to one that couldn’t. But again unlikely to get anything at present.

Maybe some institutional aspects couldn’t invest in a company not setup to do so?

Anyway, it’s just corporate setup / strategy and its not that uncommon an accounting practice.

Ultimately a good thing. But we need (just to keep JJAL happy) the jam to be there so it can be spread out to everyone first!

RNS confirms it.

You’d have to hope the acreage expansion might have something to do with it, alternatively there are a number of potential buyers for it so no doubt it has taken a while to have advanced discussions with all of them.

Oil from the ground there are like usually one or two refineries nearby I guess. Gas. Usually restricted to whoever has the pipeline in place nearby.

With the Nitrogen we could sell it to a number of people..

This can be used by a number of different companies, it might be easier just to agree to supply one big company and dump the lot on them, or maybe we will have a few contracts in place.

I just don’t see us trucking it about as a supplier directly to well sites, think we will just enter into an agreement(s) to sell the nitrogen to one or a handful of customers. Just my two cents of course!

I think it will be very close however. With Argon details to follow but not as quick and way more of a sideline (but hopefully still an extra revenue stream on top) but Nitrogen is the biggy we are fingers crossed for at the moment I guess.

Not that I’m not excited about the WD possibilities, it’s revenue people want to see. I have a feeling sentiment here will
change in an instant and the Nitrogen commercials (depending how much detail is announced) will turn a lot of heads and wow a few people.

Of course if there is a very local industrial requirement for it then we could sell at a higher price, if the local price is still normally ~$8+ for example and an agricultural or other industry user (food packaging) or something was local then no reason why it could not go for more money as with little transport cost it could be great.

Sure we will find out soon enough.

Blacksheep.

Re Nitrogen I’m expecting a ~$4 profit after operational costs.

I imagine we will sell in bulk to people and not be in the business of trucking this about ourselves.

We aren’t going to hire / lease trucks etc to transport the Nitrogen I don’t think.

More likely wells cost $200-250k. Additional money to liquify the gas (easier to transport in bulk in liquid form?) so perhaps a similar amount to liquify the gas per well in infrastructure?

We paid $8-11 per MCF delivered to our frak sites. My guess is we will offtake / sell it in bulk for $5-5.50 have an operational cost of maybe $1.50 per MCF to liquify it / other costs.

So circa $10k a day net profit from the well at $4. It would need 40-50 days to payback the well cost + infrastructure and then be producing that amount per day.

Even if costs are huge and you only get $3 profit would be $7.5k, $2 profit $5k. Hence the why drill for normal gas comment I guess. That goes for $2-3 and is yet still profitable. This well is cheap and producing gas worth ~3 times natural gas prices.

I’m more conservative with my Kansas thoughts than some here but at $2 $3 or $4 profit per MCF (after cost payback of a well and it’s infrastructure) it’s a superb play

Imagine this is the share premium account thing that was ruled at the AGM, enabling Highlands to pay dividends at a later date from profit or if they sell off an asset of one type or another..

88,000 barells they require to complete the fraks on the next two wells.

55 fraks * 33 stages complete (60% each completed) = 22 stages left per well 44 stages * 2,000 barrels.

Oh and JJAL. Things called time zones... I’m in St Lucia if you must know.

JJAL. - why can you simply not acknowledge what’s in the RNS as in treating flowback water.

Noodle. - I was not suggesting they continue to flowback and frak simulationsly - hence the additional time and the “now staggered operations”

I was suggesting that seeing as they cannot frak without water, they could look to flowback the wells they have frakked and reclaim that water, before then fraking the next wells.

JJAL - Im not trying to suggest we are yay a revenue stream from water either. I’m simply stating they are saying in the RNS that they intend to flowback the wells to reclaim water.

What good is that reclaimed water once frak operations have completed on that site. Not a lot.

Therefore is it not logical that they will therefore flow back the wells they have frakked to get the water back to re-use as it’s quite a large amount?

Given they have said they will treat flowback water, why do you have such a hard time and why giving this thought so much negativity as always?

Yes it’s a delay still. Yes the wells aren’t on time. I’m not suggesting anything else.

I’m suggesting if they are going to treat flow-back water then one well is capable
of that right now, and the other two have 40% to go before being ready for that.

Again. Why put that device there if not doing it?

It’s a simple question. I don’t understand the reason for it being there unless it’s being used to generate water for the later (possibly the single well, or possibly the two wells in same formation) via flowback water as normal production water from the two current wells would generate insignificant amounts of water.

It makes no sense to have it there otherwise?

Why do you think it’s there then. Come on. Rather than have a massive go at me, provide your reason why you think they have deployed those?

I’m not saying it will happen. I’m saying it’s possible, and is that what the units are there for?

Rather than a discussion on why they are there, you have skirted round the question and just gone on the usual rant.

I’m suggesting one or two or three wells could come on-line in order to generate more water for the remaining fraks which would then happen afterwards (once water is there)

1 barrel = 42 US Gallons.

Therefore. Try again.

The figures I produced earlier = 99,361 barrels during 1 month and 8 days and 1 month and 13 days
For Powel and Wildhorse. They also continued to produce significant water over the following month also. But just sticking to those figures = 99,361 * 42 or therefore 4,173,162 gallons, if you add the third well in, then that would add another 1/3rd again, so over 6,000,000 gallons. So if you think that’s an inconsiderable amount of water, or you think we are putting those units in solely to convert the small amount we get from production then that’s fine!

Also as per RNS. They have sourced water to carry on. My guess as I said is that they would have sourced the water to get the remaining 40% done on each well then looked to flowback.

The 6,000,000 gallons from flow-back on three wells produced would go along way on the next frak would they not?

Again. Why put it there solely for 1,600 odd barrels from production wells, that wouldn’t make a dent in the requirements, flowback water would however..

Not for a second saying there isn’t a delay on the 6 wells overall, but the wording indicates that we will process the water from operations AND flow-back, and the now “staggering of operations.”

Either that’s stop start stop start staggering on the frak OR
A change of direction to stagger completion operations from frak and frak, to possibly frak and complete (flow-back
and reclaim water) and then frak.

It’s a simple question. Why reclaim water from flow-back operations in Dec if at that point all 6 wells have finished their frak? That makes no sense at all.

I’m guessing we may flowback the wells we have finished fraking to get the water to start off the next ones.

What is the point of putting those units there if all they are doing is processing the water produced from our two producing wells? That would only get us 1,648 barrels of water based on July’s well production data!!! Ridiculous amount of effort for a small amount of water.

So go back to flowback time.....

Wildhorse.

8 days in October produced 13,781 barrels
November produced 31,000 barrels.

Powell:
13 days in October produced 24,766
November produced 29,814

Does it make more sense now?

Expect nothing less from you JJAL.

But what else could they mean when they say concert the flow-back water.

Why else do you think that is in the RNS?

What other logical reason is there for it?

To sell water back to the operator in November / December? When the wells have been frakked?