The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Many have a complete misunderstanding of what a CPR represents.
I take your point Deemule regarding BB commentary, but few, if any, are qualified Reserve engineers or evaluators.
Have a look over the 2017 CPR and let me know the page where Deloitte make reference to a particular well, let alone flow rates.
I will save you the bother, no reference is made.
http://unionjackoil.com/wp-content/uploads/2018/10/PEDL_183_CPR.pdf
A CPR follows the criteria laid down in the PRMS 2018 (Previously 2007, when the 2017 CPR was written. )
Here is a link to the most up to date version:
http://info.specommunications.org/rs/833-LLT-087/images/PRMgmtSystem_V1.01%20Nov%2027.pdf?mkt_tok=eyJpIjoiWWpGaFpURmxZVGRtTm1RdyIsInQiOiJqa3o3eU1XZmprcXNkUit6dW1JWWNyaXFEeEJleG9qWno2ZlBaanlTOWtMeFlRS2VaXC9lZVpLWmpKcmFvZzZmNWt6dVRucFVYazMwWk1PY1BYWVZpTTFKdUM2Um5kVitiS1VZK255MVhlZlB0NDc5THVJZ28xVnEzc2ltXC83Q1RGIn0%3D
I would draw your attention to the 2017 CPR, which made reference to the classification of “Prospect” or “Lead” only.
Clearly these are right at the bottom of the classification list.
We are aware that the discoveries in WNA2 and WNB1/B1Z have produced volumes of new data.
For sure flow rates and commercially are required, as is a sound development plan, to put Reserves in the top classification.
The next CPR, will be moving us up the Reserve Classification, and flow rates will be the icing on the cake, but definitely not required to produce an enhanced CPR for all the usual purposes.
I would take some time out to read these documents, to gain an understanding of what is said
Jack
Those betting a CPR on WN is way off, should note the below RNS.
I expect COVID had an impact and for sure the results of B1/B1Z also need to be factored in, but they have been at it for over a year so an update could drop at any time.
Jack
RNS 11 Nov 19
https://www.lse.co.uk/rns/RBD/upgraded-potential-volumes-west-newton-7ro4vti33x8g90g.html
“The information contained herein is the Operator's internal assessment of hydrocarbons in place and should not be construed as an indication of ultimately recoverable resources in accordance with an internationally recognised standard. An independent Competent Person's Report is being commissioned to estimate resources separately.”
SmokieUK
Source - 5 paragraphs in after the highlights
https://www.lse.co.uk/rns/RBD/operational-update-at-west-newton-onshore-uk-725nn7ipsv3ssvh.html
And the science bit:
https://www.sciencedirect.com/topics/engineering/fracture-permeability
Jack
Ahhhhh the bubbles of chocolate, representing Porosity (How big the pockets/gaps are within the chocolate bar). WN Reservoir = c15% we are told across the entire structure from A1/A2 to B1/B1Z.
Permeability represents how joined up or connected the pockets/gaps are and when talking about cores exhibiting natural fracturing the permeability looks very encouraging.
Enjoy the chocolate
Jack
The West Newton A-2 well exhibits encouraging porosities on logs and in core, particularly in the identified oil zone where in excess of 30 metres with good matrix porosities approaching 15 per cent. have been measured. The core also exhibits natural fracturing which is confirmed by an imaging log run across the entire Kirkham Abbey interval.
BlackHopper
Edale are an absolute return asset manager. Basically means they don’t benchmark their returns but concentrate on the absolute return of an asset over time.
“the Firm’s investment strategy involves investing in UK listed equities on behalf of clients”
“the Firm does not engage with investee companies, or act collectively with other shareholders”
This TR1 should not be overlooked by LTHs
Jack
Clearly there is a protection mechanism, whereby any investment by RBD is covered by an Investment Agreement. It's obvious, that if you put £20M quid in, you not only get a seat on the Board but also Rathlin are restricted in a number of ways.
Issuing new shares, paying a dividend, license obligations, appointing Officers to the Board, IPO's, Trade sales....the list goes on.
RBD are quite rightly protected as an Investor and our 59% Shareholding would have all the standard caveats.
I understand that things are progressing well, and all current Shareholders just need to chill.
Value will out
Jack
On so many levels, we have the Bella at the ball.
Shall I dance with the prettiest lady, knowing that the outcome could be rejection?
The side ways glance, weights up the risk and opportunities.
Faint heart, never won f**k all
Jack
Miker444
Lake of oil..........?
Very difficult to visualise. The distance between A1/2 and B1/B1Z we know is 2.5kms. The hydrocarbon column depth is at least 118M from the latest RNS.
I found a lake of similar dimensions but it’s only 72 feet deep. Take a look at the following site and visualise the dimensions of derwent water lake.
https://www.visitcumbria.com/kes/derwentwater/
Clearly the recovery rate is subject to further testing, however with fracture porosity at c 15%, the dimensions are enormous.
Folks do not realise the quantum of dimensions offered up.
All the facts currently suggest a hydrocarbon field of significant importance to the UK.
With that in mind, I believe that the current Market rumours regarding potential corporate action to be highly probable.
RBD win on all levels. If UJO decided to sell their 16.65%, that would put a bottom on the valuation and RBD would re rate accordingly.
Our 59% Shareholding in Rathlin, is also attractive to an IPO, where RBD and Connaught Shareholders extract value.
Let’s not forget that the £20M they has gone into Rathlin is covered by an Investment Agreement, which would dictate how Rathlin could manage further fund raising and dictate the participants. With £18.5M cash in Rathlin as at 31 Dec 19, and B1/B1Z costing c£5M, they are well placed cash wise, so are not a distressed seller.
That’s important, as we need to give the perception that we could “go it alone”.
I am favouring a Rathlin IPO, where we keep our 16.65% direct interest, but cash our on the Rathlin %age Shareholding.
Obvs all conjecture at this point, but sitting pretty
Jack
RNST
We don’t need a translation, as the RNS was very clear. B1 was a success in the Kirkham Abbey formation.
“The Kirkham Abbey formation indicated a hydrocarbon charge based on wireline logs, cuttings and mud gas readings. “
I find that portraying personal opinions as “Facts” laughable from someone who does not know about “Oil lakes”. Even in my limited experience, I have been invested in Companies where the reservoir was so big, it was described as “tidal”.
Jack
Deemule
I would also add that the EWT at A2 and B1Z plus a further drill at the B location are also already funded from the £16M RBD coughed up for Rathlin in the last raise.
Clearly RBDs existing cash balance also funds the 16.65% direct interest.
I would remind Shareholders that Cali is self funding and the next phase of infrastructure is now in place to enhance production. The current bopd net to RBD is equivalent to UJOs share of Wressle (once they get it off the ground)
The pandemic put the stops on Grizzly Island for all the obvious reasons but should be picked up again once COVID clears. The top RBD KPI is the ratio of Project Cash In to Cash Out, and I remember that the last Cali valuation on some of the assets was returning 6 fold.
Expect revised numbers soon.
Whilst Genghis15 was implying $0 for OIP at WN, I would say the asset is worth what someone would be prepared to pay, bearing in mind worldwide shortage of development opportunities. Add in onshore and next door to massive infrastructure and.........
Watch this space
Jack
Miker444,
Have a read of this recent report. The fall of Brent and the pandemic rained in oil exploration to the point where I believe it’s a coiled spring.
All the Majors know that there will be a demand squeeze and if they have any sense will be looking for development opportunities as opposed to pure exploration.
That’s why we will be a target. Simple
Jack
https://www.rystadenergy.com/newsevents/news/press-releases/the-world-will-not-have-enough-oil-to-meet-demand-through-2050-unless-exploration-accelerates/
Ah yes,
They have major infrastructure at Dimlington, just down the road from WN
https://www.perenco.com/subsidiaries/uk#:~:text=In%20the%20North%20Sea%2C%20Perenco,300%20mmcfgd%20for%20other%20producers.
Perenco Dimlington
Dimlington is the larger site of the four. The natural gas condensate is transferred to the Dimlington terminal. Dimlington also processes dry gas from the (former) Cleeton, Ravenspurn South, Ravenspurn North, Johnston, the Easington Catchment Area (Neptune and Mercury), and the Juno development (Whittle, Wollaston, Minerva and Apollo) gas fields. The Dimlington site has the control room for all of Perenco's gas fields that ship gas to the Easington site. Dimlington can handle up to 950m cubic feet of gas per day.[17]
Of course, in addition, there are the facilities at Easington (Part of ZCH consortium in the Humber)
https://www.zerocarbonhumber.co.uk/who-we-are/
WHO ARE WE !!!!!!
And then there is our friends at Shell (Oh dear Deltic, but I am a Shareholder there also !!).
Nice to see in NW Europe Shells infrastructure operations extend from Hannover right across to WN. Joking aside, the Southern North Sea, does appear to be on trend with WN.
https://reports.shell.com/investors-handbook/2019/servicepages/worldmap.php?area=northwesteurope
Didn't someone say that WN could be the equivalent of a North Sea Offshore find of scale but at a substantially lower cost (Ah yes, Stephen yesterday on BRR)
Eyes wide open, as RBD are still handing out Xmas gifts (Thanks to all the Sellers, being left behind as we re-rate upwards)
Jack
Oldabutnowisa,
Ditto. Today was a fantastic day, on a number of fronts. The Market is unkind when stocks are falling, but it also takes no prisoners in an upward trend.
It was a great session today, providing a suitable exit point for our Seller and quite rightly some took 30%. I thought to myself that no the asset has been substantially derisked what’s the point of cashing in my chips.
When you have an onshore field that appears hydrocarbon charged throughout, with 14% porosity, its special. A2 and B1Z flow tests within 3 months and with the knowledge that this is fully funded plus the cost of an additional B well, we are sitting pretty.
It would be good to get a Shareholder update (04 Sept 20 on website) to see the movers and shakers. Some have left but who are the replacements?
I know Wych Farm was outputting 110k barrels per day at its height. What are folks expectations here?
Far too much going on to leave the party early !!!!!
Jack
Deltic Management were offered an extremely good risk / reward play, which was rejected without discussion (?).
Deltic Shareholders, now need to wait until March 21 for a drill decision on the two farm out's with Shell, with no drill action until later in 2021.
In the meantime, the flow testing on West Newton A2 & B1Z is Q1 2021, which would have exposed combined Shareholders to a new rich period.
Let's hope the Deltic Management learn from this expensive lesson.
Jack
TryTry,
What they said was this was a Significant and Substantial Step up. Extremely good hydrocarbon charge over the whole area, with importantly no water contact.
They have seismic across the whole A1...A2...<...............2.5Km..............> B1, which confirms continuity across the entire structure.
The B1 well has meaningfully de-risked WN. The Economies and Easy of Development put WN on par with a North Sea Offshore find of scale.
Shareholders should be absolutely clear that this is a Significant Asset of extreme importance, within the Infrastructure intensive Humber region.
They will now flow test A2 and B1Z, and also have the go ahead for a further drill in the B1 location.
Looking forward to the news flow over the coming months and how that news increases our 56+% of WN.
Jack
Noveckingood
"Risk is gone, just have to work out the value now...!"
You won't be the only one. I want to see how we rebuff the first offer
Jack
Well done all.
Massive !!!!
Jack
Sachin Oza, Co-CEO of Reabold, commented:
"West Newton continues to surpass expectations and we are confident that it will be the largest onshore UK discovery since 1973.
"With more analysis to be done, we believe that these indications augur extremely well for the future of the West Newton project, which has the potential to be a meaningful and crucially local source of hydrocarbons for the Humber region."
Deemule
I find it interesting that commentators "write off" Cali as a non event asset.
Of course we know that the various wells have been in production for some time now and the team on site have gained valuable experience to date. In addition, the associated build up in infrastructure is very good news and bodes well for increased output.
Despite COVID, we know that Cali is a self funding activity and I'm sure that once the restrictive COVID issues are out of the way they will be in a good position to tackle Grizzly Island (for free).
With the cost per barrel at less than $14, Cali can operate profitably in extremely low oil markets. Of course, with Brent rising to its current level of $48 per barrel will increase profits and fund further exploration activity.
Jack
Oilriches
Good step through all the opportunities. I had no idea that the UK import £200M of gas a week, which I view as a staggering weakness in our Energy strategy, especially as we are exiting EU.
Jack