Member Info for Mirasol

Doesn't matter - its injected so they just pump it straight back in instead of paying for trucking...............

"If Wytch Farm can make a profit on their water cut figures anyone can."

October 2020

Wytch farm 12460 bopd 14629 bbl water INJECTED

IBug - they only pay to reinject - which is a small cost compared to trucking water which is what HH has to do - and 12,000 bopd pays a lot of costs

" As soon as oil taken to refinery UJO gets their proportion of the sale money-"

Depends on the Accounting Procedure attached to the JOA - it's normally credited to the Joint Account immediately and then can be netted off at month end against costs incurred for each company. If you're in credit you get a transfer, if not you get a cash demand

"Yes Mirasol. I agree. What a pile of ****e and disappointment UKOG ended up."

But you never said so Heid - you ramped and ramped and ramped - then disappeared overnight - as you will here :(((

From heid in 2019....

Blue is the colour, oil is the game
We're all together and winning here on aim
So cheer us on through the sun and rain
Cos Uncle , Uncle is his name.…

"£12 mil funding to be closed in the next couple of weeks."

I don't see any evidence of that in the QA - in fact these two raises suggest the opposite - if £12 mm was on the way you don't need the two placings....... the first QA answer has no timeframe - in fact he sounds well p***** off............

"MMs keeping this down Market Makers supposedly. I prefer to call them Market manipulators"

Evidence? No-one has ever shown that the MM's manipulate these small oilers - TBH they are too small to bother with

"No water, seems to me that UKOG have now misled the OGA"

I very much doubt that , I really do...... I can't remember a single case of that ever happening onshore or offshore the UK. You'd never work in the business again

That first answer doesn't suggest that the re-financing is anywhere close - it's a" we've done our best but no-one wants to lend us the cash"

no water!!!

What a strange person...........................

"All the funding, whether debt or equity, is sorted, "

Really ? So they don't need the £ 12mm to finish SFB?? I must have missed something

ZYX098 - the "costs" include the money spent on paperwork AND the delays that are incurred. With no reasonably clear way of being able to say start a well on a specific date there are no economies of scale, each operation is a one-off with all the costs that that involves. I read that offshore in the N Sea rig productivity increases by over 30% between the first well in a drilling programme and the third for a rig brought out of storage - yet onshore the rigs rarely move directly from one operation to another in the same area.....

There is no incentive for new supply (or even oil ) companies to come in and a lot of the kit is really old

The rules should allow a company to drill, long -term test and produce for example without having to repeat the planning process at every step

Ocelot - it's hard to find a dearer operating environment onshore than the UK - which is why just about every small oiler eventually looks overseas

From the original RNS 23rd July

"Transaction structure
To earn its 50% interest in the Licence, the Company has agreed to fund 100% of the first of 5 commitment wells in the Licence's 5-year exploration term, together with a small 2D seismic survey with an expected cost of $1- $1.5 million. UKOG's net expenditure for the one well plus seismic programme is capped at USD$5 million maximum expenditure. Thereafter,
the Company will fund its 50% interest share expected to be c. $1.5 million per well."

So it is Up to 100% of the first well subject to the cap of $ 5 mm

I would comment that they seem to have come to an agreement quite quickly - JOA and farmin negotiations can drag on for years in some cases

"I repeat you have no idea what this deal entails.....you don't know what has been agreed....what is the point in negotiating if all deals are the same...."

True - but things like the basic Farmout Agreement, the JOA and the AP are always pretty much the same I believe - the time and cost of negotiating a "non-standard" set of paperwork is immense.

the difference will be in the exact terms - when do UKOG stop paying all the costs, when do they earn, when do they get rights to the old data, what are the exact sole risk provisions, what is the pass mark for decisions, is there any right of pre-emption if one party wants to sell, what percentage uplift can the Operator charge for overhead costs..........

We'll never get to know those as they are never published

In a farmin agreement where the Operator is farming out they will almost certainly have included a detailed cost estimate or AFE (Authorisation for Expenditure) - this will have the cost of the rig - almost certainly being provided by another, associated company for tax reasons. UKOG will be billed for the total cost (up to their agreed limit) by regular cash calls - normally monthly

AME will "pay" their subsid/associated company the agreed day rate etc - UKOG don't get any sort of a free ride

"Yes, but AME will charge them for the use."

It all depends on the Joint Operating Agreement and attached Accounting Procedure

the "standard" international one these days is normally based on the UK Offshore one written by Britoil in the ? 1970's which covers all the main points and saves everyone trying to negotiate it from scratch

I understand it normally states "The Operator shall neither gain nor lose by being Operator" ie you shouldn't make a profit - but you can write off a lot of costs if you are wise. And I understand that if you use your own kit then the costs should benchmarked against other operators and providers.

So yes they will make some money but the costs to UKOG should be similar to the costs if they went and got a rig from someone else

I see Reabold are forecasting a CPR in late summer - should make interesting reading