Member Info for londoner7

By my estimate on draught she has between 350-400 bbls - I'd guess nominally one number or the other.

JayKay1, thanks, the data sheet has proven to be very useful in my calculations.

Spedders, I'm an investor in HUR but I'm also a new investor in ENQ, where Kraken offloads are a big topic of conversation. As an engineer and out of interest I wanted to understand the conversions. After some study I came up with the same conversion as you, gross tonnage, API, etc. I agued my case on the ENQ board and was politely told by several members that I was wrong without any clear alternative calculation being presented. I stuck to my conversions, but my numbers all came up short against the fact that ENQ and EOG numbers all pointed towards 500K offloads. A poster on this board sent me this link to the Amundsen type shuttle tanker

https://www.slideshare.net/teekaycorp/the-amundsen-class-shuttles

I constructed a spreadsheet around the cargo and ballast capacities and the numbers worked. Most of the FSPOs in the North Sea are 600K capacity with nominal 500K offloads, and in almost every case I follow the offloads register in my sheet as very close to 500K. BP' Glen Lyon is a 1M capacity FSPO and I've seen up to 600K offloads for the same class tanker with a gross tonnage of 66563. Applying your maths that equates to 485K bbl capacity, and this is a relatively large shuttle tanker.

If anyone is still reading this ;-) and interested, I assume full ballast on arrival and empty ballast on departure (for c500K offloads). A big assumption but it seems to work.

Sorry for the 'simples' jibe. I'd just got back from the pub and was in good spirits! I appreciate your query.

Spedders, I could bore you with the detail but by my estimate the Petrolatlantic has a capacity of at least 618K bbls. The standard parcel size for an FSPO in the North Sea is 500K bbls. The PA would have slim pickings is she couldn't handle 500K. How do you get 400K bbls - show me yours and I'll show you mine.

I think comparing this tanker's capacity to the last is pointless. Both exceed 500k bbls. There may be a good reason why 350 K bbls was offloaded last time and something similar will be offloaded this time. But the fact is that the Lancaster FSPO is capable of an offload of 500K and the PA is capable of handling it. All I'm saying is that 500K is the normal parcel size.

Probably, before the end of the weekend the PA will detach and report a draught. If it is 13.5m she has 500K. If the draught is less she doesn't. Simples!

If it's the usual 500K parcel and she stays on schedule then it's around 15Kbopd. We'll know in a couple of days.

chilting, Navion Oslo is big enough. A couple of weeks ago she took a cargo from Catcher which does 500K loads and more recently she took a cargo from Glen Lyon which does larger loads and by my estimate that load was 550K, and you know how conservative I am in my estimates ;-) Keep an eye on her too.

I've speculated in the past that tanker behaviour can be a good indicator of current Kraken performance. You have better insight and experience of shuttle contracting than me, but if one assumes that there may be a day or more between the contract and departure and then 1-2 days of sailing time and on potentially 50K production per day, there is only a two day window between a 500K cargo and a full 600K FSPO, then time margins are tight. I've noted in the past that some Kraken bound shuttles come up the North Sea at barely 7 knots. For the last load (#41) the Natalita was steaming up the North Sea at 12-14 knots and it was looking like an 11 day cycle, but as she got close it all changed and she drifted around for nearly two days before hooking up. I would speculate that the Kraken FSPO had a late problem and was perhaps then operating on a single train or other reduction in production before she could complete the usual 500K package - that was the breakdown event. I'd even made a note in my log anticipating a longer cycle for the next load.

Beerbull, a 'steal' isn't a quantifiable valuation in my book, but the 10 years of reserves only refers to 2P of 245MMbbls.
Enquest have identified a further 200MMbbls of 2C resource, which they claim is accessible through drilling with existing infrastructure, so expect the 2P number to be maintained or grown over the next few years. The 2019 bonus plan points to a 5-10% growth target in 2P over the next 3 years - that's net of ongoing production.

Speculation is the lifeblood of these boards.
Contact IR? No, no, no! It’s way too early for that!

A recent discussion on Kraken fuel reached an impasse so it was time for facts. But who would have thought that it could lead to a fresh discussion on the heating of sea water and crude. Okay, a somewhat specialized subject and with only one specialist (ProdOpt) on board it too has reached an impasse so again time for facts.

The Kraken tanker has been delayed a day or two and already the board is rife with speculation. :-) For my part I wanted to know if the Sapphira had been contracted by Enquest – if a shutdown has been initiated its status would indicate whether it was planned or not. There was an ‘investors presentation’ last week which included a detailed slide on ‘capitalisation and enterprise value’. Clearly a point for discussion. AB has just vested all his outstanding options. The ENQ share price has recently been showing some strength against its peers.

There is a rich vein to suck dry before we introduce facts. The 5th Sept will come round soon enough, when much will become clear, but let’s have some fun in the meantime!

chilting, why do you think the Sapphira with a destination Sullon Voe was linked to Kraken when recent transfers have been in Scapa Flow?

F22, The CMD information on Lancaster was very positive but there was one note of caution.

'This included measuring interference between the wells, which proved to be instant. Whilst a very positive indicator for fracture network connectivity, the Company believes this interference risks the two wells acting like a single well bore. A cautious approach will therefore be taken to manage increases in flowrates between the two wells, with careful reference needing to be made to the combined rate.'

What do you make of that? Apologies if this has already been covered.

ProdOpt, I retract my comment 'It is flared'. My focus has been on the generator, and I had only that in mind as I wrote the post. IR didn't mention flaring. Surplus gas is flared, but then we knew that already.

It seems logical gas would be used to directly heat water. I'll be interested in your findings. I also wonder if the processing of wet gas and, or, the heating of water and crude is proving to be another challenging aspect of the FSPO performance. I recall someone, perhaps you, speculating that might be the case - maybe the plant is under specified. If so, perhaps that's an area that will be targeted in the upcoming maintenance window, if such an upgrade is feasible. (Again this was an earlier poster's speculation, perhaps you)

ProdOpt and Romaron, thanks for you replies to my query last week about the gas import pipe. From the Kraken development presentation it's clear that a 15MMscfpd gas import pipe, to supplement produced gas, was the preferred fuel source - cheapest. We know that the 62MW power generator is specified to use 3 fuels, diesel, gas and crude. And one of the areas of improvement identified in a recent presentation has been 'Fuel gas availability'.

Based on this I had serious doubts that gas was the sole supply or that crude was being used, particularly because ENQ and OAG oil production numbers match and my understanding is that ENQ do not include produced fuel gas (or crude) in their production stats, so I sent my query to ENQ IR.

When I receive communications from a company I don't quote them verbatim preferring to maintain a level of confidentiality. Although, I appreciate that IR would anticipate their replies getting into the public domain, which is probably why they can be vague at times. That said, this is my interpretation - take it as you wish.

Produced crude has been used at times but not in significant quantities. Crude would need to be treated before it's supplied to the generator. My interpretation is that this source is unreliable. It is not currently in use.

There isn't a gas import pipeline currently in place. Produced gas is not of sufficient volume to supply the generators. There's a view that produced gas might supply one element of the generator. My understanding is that no produced gas is used by the generator. It is flared.

The 62MW generator is supplied by purchased diesel. It is a reliable source and solves one of the significant impacts on the FSPO uptime. The focus can now be turned towards other issues. I estimate the cost of diesel at $1.5m - $2m p.a. (Equivalent to <100bopd, it seems a small price to pay if it keeps the power plant operational 24/7 – okay there’ll be some planned maintenance, the emphasis on planned.)

Gas remains a future option.

Enough of the idle chat - where's that tanker?

There's a new presentation on the website. Includes an interesting slide on EV that I haven't seen before.

Oilyali, good points about Kerogen moving down the risk cycle.

I'd just add that the timing is significant. Rob Kelly, a non-executive director associated with Kerogen, has full assess to HUR's activities. With the recent CMD bringing all investors up to date with Lancaster and the current drilling programme now is a good time for Kerogen to take some profit, if that is their wish, without unduly rattling the market- a 110m sale is always going to cause some temporary liquidity issues.

The 2nd drill in the 3 drill programme has only just started. Imagine the reaction if the sale occurred say 4-6 weeks from now.

Therapist, if I was a betting man I'd have put it on your pick, but sadly the Natalita is now showing ALVHEIM O.F as the destination.

The watch continues.

Thanks romaron. A very interesting insight, which highlights the value in attending AGMs or other events and taking the chance to question the main man (or woman). I find that the Q&A session following a presentation often reveals more interesting stuff than the presentation itself, but the analysists can sometimes be too respectful when a question has been dodged or poorly answered. At a recent event I took the opportunity to ask the BHP chairman if there are any party animals on the board with respect to a point I was making on a history of poor CapEx judgements coming at the top of the commodity cycle. I doubt an analyst would have used those words but my point was received very clearly, and just perhaps he'll reflect on it the next time he wants to write a cheque for $50bn.

Hi romaron, could you expand on your comment, "At the last AGM AB commented on the accuracy of tanker watching "

Hi romaron, the chess analogy is interesting. AB may be a chess master but in my mind the chess board is floating on the North Sea and pieces are arbitrarily moved by passing storms. Perhaps he doesn't need to win but just outplay his opponents. I don't know the man but you seem to so your comments are encouraging.

Ineos walking away from a £117m deposit on a deal suggests they are very serious - perhaps they identified a better opportunity. Whether that's here or elsewhere I suspect there'll be news in the next year or so, but bid interest has never been a basis for my investments. Let's call it the cherry on the cake.

I've been reviewing Kraken on a number of fronts but held off posting. As a CNE holder I understand your point about the Kraken impairment - in the main my view is that it was part of a 'kitchen sink' exercise to get the SP down ahead of his options, and it worked. Time will tell as to the validity of the impairment, but two elements struck me. One, the financials CNE applied to their impairment lead to a positive read across to ENQ's holding even if the same impairment was applied. And two, it would be remiss of CNE not to assess the logic of building their stake in Kraken from 29.5% to 49.5%, and a first step would be to reduce its valuation in the market. There is the possibility of a large arbitration award later in the year. If successful CNE has stated that their existing plans don't require the cash injection so they would return the bulk of it to shareholders. Perhaps they would look at increasing their stake in Kraken. I'm not clear whether the 2018 AGM you mention was this year or last but I'm assuming this year. I noted in the report issued just a couple of months back a comment that a sale of up to 20% of Kraken was still an option. Again, looking at CNE financials on Kraken even the sale of a 10% stake would do wonders for Enquests financial position.

Hi romaron, you've been here longer than me and your insight into the availability or otherwise of cash for maintenance is interesting. I take the gist of your point to be that with a relaxation in pressure on cash flows we may see some reduction in recent field declines. Let's hope so.

I've been looking into the GKA hub, including Scolty/Crathes. The high teen decline rates you refer to are apparent, but there's no doubt that production efficiency has improved over the last few years mitigating that decline to just under 10%. The new SC pipework should bring Crathes back into production later in the year and IMO could be a significant addition. Looking further out I can see development of Eagle in 2020/21, which as Enquest will no doubt highlight, "The field is tied back to the Kittiwake platform and has greatly extended the useful life of this production hub." It should also maintain or reduce average hub costs. All good incremental stuff which is what I'm looking for from my investment in Enquest.

As another poster mentioned earlier, I'm sure AB is also looking for the next North Sea acquisition, however I'm not so sure that LTHs here are ready for it.

L3, you mention Alma's production rates.

Although, I've followed Enquest (at arms length) for several years it's only in the last couple of months as an investor that I've looked into the detail of their assets. A couple of things that are apparant is one the disappointing results from new developments e.g. Alba/Galia albeit with the odd exception, Yathan, and two the relatively short plateau life e.g. Alba/Galia and Kraken. These outcomes are not unique to Enquest. As an investor in Ithaca I saw similar disappointments with Athena and Stella. Athena was impacted by ESP failures, which became uneconimical to repair/replace.

At Alma/Galia I see Enquest is having a similar 'battle' with ESPs. Winning in the case of Alma but losing with Galia and with it approx 500bopd - I guess an ESP replacement wasn't economically viable. It looks like the new ESPs (2018) went into Alma.

On the Alma numbers I used the OAG dashboard tool to assess gross production numbers for each of the 3 years to April 2019. In the year to Apr 2017 gross production was 2.8M, April 2018 0.8M and April 2019 1.3M, so, yes a decline overall but perhaps some stabilisation following the ESP replacements last year. I believe 3 new ESPs were fitted. Over time these too will fail but hopefully ENQ gets a couple of years production first. A still useful 2,000bopd net at the last count but as you have no doubt observed in a steady decline. Also, I noted comment on planning ahead for decommissioning of the Alma/Galia fields.

On Kraken, and its short plateau, I think a bit of capex on the Western Flank is likely in 2020. I estimate current production (June) is around 85% PE on 50K for an average production number around 43Kbopd. At a recent update a mid 80s PE was mentioned as a near term goal. Perhaps they'll squeeze a bit more out following the next maintenance cycle but the 50K is likely to come off plateau in the next 12-18 months, hence the need for the WF development. Still early days but I'd be happy with a 35-40Kbopd Kraken target for 2020, anticipating another 3 week maintenance period in 2020.