Member Info for Mirasol

The original plan was to drill HH1z and then HH-2 and 2z followed by a break while they got planning for production.

For reasons unknown (but probably to do with Tellurian) the arrival of the rig moved right and planning has been delayed (but not a long way from their 2018 estimates)

I'm sure they're now hoping to get planning while they drill the wells they already have PP for so they can shift seamlessly into production wells

IIRC they have discussed rejigging the immediate program to drill HH-2 and 2z first before HH-1z - this allows them to keep producing from HH-1 for most of the time and keeps it as a fall-back if something goes Broadford Bridge with HH-2 and 2z

Found it - Google is our Friend

https://www.ukooa.co.uk/issues/stdagreements/worddocs/Joint%20Operating%20Agreement.pdf

177 pages including the AP - a draft from Shell for the UK Offshore 20th Round back in 2002 but if you compare some of the text in the UKOG admission document you'll see not much has changed.....................

It can't be - they're over 80 pages long I believe and then there is an Accounting Procedure attached

As it was once explained to me by an oil field lawyer that JOA's used to differ enormously but when Britoil was formed in the 70's they decided there would be a standard all singing, all dancing version. This has proved to be remarkably successful as it covers all the issues and saves everyone years of negotiating from scratch - it's been adopted in other places as a template as well apparently.

Something do change - almost always the passmark /voting levels and often the sole risk provisions but the rest is very much the same from Licence to Licence

Apparently you could get a free copy of the basic draft from UKOOA (when it was still around) but the replacement body, UK Oil & Gas , wants cash.....

There is a summary starting on page 171 of the readmission document

From that it looks as if it is a Standard UK (what is known as a "Britoil" draft)
O&GUK will sell you one for £ 150 https://oilandgasuk.co.uk/product/joint-operating-agreement-joa-long-form-accounting-procedure/
Joint Operating Agreement (JOA): Revised in 2008 with the involvement of a broad group of senior industry lawyers. The CD also includes a PDF of the user guidance notes and short form accounting procedures that have been produced in association with the Oil Industry Finance Association (OIFA). Supported by CMS Cameron McKenna.

Long form Accounting Procedure: An alternative to the JOA Schedule A, this was produced in association with the OIFA.
Also included in the pack is
1. Additional Guidance in Relation to the Oil & Gas UK Standard JOA, March 2011
AND
2. Amendments to Clause 22 of the Oil & Gas UK Industry Model Form Joint Operating Agreement to address the Bribery Act 2010, March 2013
Available in ZIP download format only.
------------------------------------------------------------

Penguins "though there may be paperwork requiring completion before the rig can be hired without Tellurian's involvement (indemnities, guarantees of funding?)"

The more i look back at the timings the more I believe that Tellurian were blocking, or at least delaying, approvals for the rig contract until UKOG made them an offer.... Sanderson was talking about a short mobilization framework in Jan/Feb and here we are in mid August. One of the RNS way back referred to "all INTERNAL approvals are in place" - could be the missing EXTERNAL approval was Tellurian whose approval would have been necessary under the JOA.

All water under the bridge now...... now if they can only get planning permission for the development......

But people (DHC etc) claimed that Brockham flowed oil as well ... the trouble is that without rates and times and the test report you just can't believe a word they say

I've always thought it odd that Cuadrilla never pursued it if it was so good - after all at the quoted rates they didn't need to frac........

YY " He has proved that already bar getting oil to the refinery."

And therein lies the whole problem - they can't get any oil/gas to flow from any of their properties can they.................

What REALLY worries me is that re reading what has been said by the BoD about Balcombe it sounds identical to what they said about Brockham withe same technical team

Why should anyone believe a word they say?

I don't understand why people get so upset when someone like Penguins asks a reasonable question.

Sure he/she tends towards the disbelieving but than any LTH who has seen the statements from the Company and on here over the years is entitled to a degree of scepticism - it could be worse of course - look at Angus.

You can be a LTH here and not need to constantly wear rose tinted glasses.

Right now I thin k we're in a better place than we've been for years

Wizzard - you don't issue a CPR for each well - in fact here is no requirement for them to issue one at all unless they want to rasie more cash .

They have to submit a Plan of Development to the OGA which does what it says on the tin. That will certainly cover off the Portland and (probably the Kimmeridge- although that might be a little more uncertain as to exact numbers).

Once that is approved they can push on and produce as per plan and you can read the story in the monthly production figures.

A CPR is only required by AIM if you're doing a raise of some sort - try and find a BP CPR for example....................

Penguins yes point taken on "reserves" etc -

Well testing always costs a lot more than production - you are starting and stopping, running gauges, employing (Very expensive) test engineers etc etc

Once it goes on stream a lot of fields are unmanned onshore UK (remote monitoring) and the tanker turns up whenever ...... You might have a security guy around but even that is exceptional. The pumps and kit are designed for long term reliability and you don't change anything - just pump /flow steadily. You also cut your costs by getting the people like the tanker company to quote on a yearly basis rather than pay by load etc etc

Getting accurate numbers on OPEX is very tough but most people seem happy at $ 20 a barrel as back of the envelope

Of course we should also remember the 680,000 Tellurian barrels will be produced over maybe 5-10 years so there is the time value of money to factor in but even so you can see it makes sense to buy up more of it if you are convinced you can produce it - which UKOG clearly do....... If oil prices zoom then it's a licence to print money

And they get the additional KImmeridge upside , effectively for free..................

Say Portland connected volume = 12 million barrels and recovery factor of 15% = 1.8 million recoverable

35% of that = 630,000 barrels they've bought . They paid £12 million for that = £ 19 a barrel or US$ 22.85 a barrel

Add in production costs - say $20 a barrel = $43 a barrel - so anything over that or increased recovery , or reduced OPEX is jam

Looks good to me

"Apparently in Redruth it has caused 2 million £ in improvements."

WHAT??? Did it flatten the whole place to the ground?????

Charlie

Not sure what the status is on all the wells that have been drilled - the -4 in particular has had a lot of work done to it and is probably in bad shape. The IPO presentation said they had 3 wells in the field and Planning permission for up to a total of 6 so they could drill more I guess - but at ++£ 1 million each and Xodus saying low case was 20 bopd (?per well?) = very risky

Alba only have one real asset and that's Horse Hill - the rest is smoke and mirrors that will require years of work and millions of dollars to realise. UKOG are now in a position where they can squeeze Alba hard on Horse Hill - so I'd expect them to exit in the next 6 months for cash and paper so their BoD can continue their lifestyle for another couple of years

" Does anyone’l know whether multiple Portland wells at Brockham could produce a higher figure eg 500 bopd??"

As I understand the RNS 's Charlie the problem with the Portland at Brockham is the need for water injection and they have problems with the Environment Agency over that. Could it reach 500 bopd? The high case in the IPO was around 150 bopd IIRC

"We have at least 189bcf along with a 65m hydrocarbon payzone with a hydrocarbon saturated core recovered from the lower formation. West newton 2 was to prove up a discovery so the gas is a dead cert."

Sorry - the BoD THINK they may have 189 Bcf - but until it is logged, tested and there is an extended well test that's not much more than an educated guess. Look at the history of Balcombe, Horse Hill, Avington (way back), Brockham................

Numbers produced by AIM companies after an initial drill are often woefully incorrect I'm afraid - I've been burnt a few times

"now if I was SS I wouldn’t be showing my hand just yet, imagine an RNS coming out saying “HH is flowing like a *****” Tellurium would be like “ oh hello”
Instead nothing comes out and they get itchy feet
I still wouldn’t bring CPR out for couple of weeks yet, don’t want to **** on their chips just yet"

Of course Tellurian would be getting all the data from the well every morning like all the partners - and as a much bigger outfit no doubt have had a lot of people looking at it . It just doesn't make sense from a business point of view to stay in - if they have to raise cash in the USA they have to explain ALL their investments to potential lenders and HH is just a pain in the a**** for them.

CPR - Sanderson said he would n't do one until the testing had finished - and they take 3 months normally - expect it around Christmas................ or they may wait to see what the horizontals actually do

"SS didn't do very well in cracking the Weald code at BB, and wasn't it Tidswell and Lenigas that got HH flowing?"

Lenigas cut the deal to farm into the Magellan/Tellurian acreage but he was chasing the deep (dry) Triassic play. Tidswell drilled the Horse Hill 1 well but was then replaced by Sanderson who recognised the KImmeridge play (and took 5 years of s*** from so-called "experts" because of it)

Lenigas moved on to another pump & dump (Cuba? Cannabis??? God knows...) and JTP went to Angus and made the brilliant decision to sell out of Horse Hill....... Sanderson tested HH in 2016 , screwed up Broadford Bridge in 2017-18 and has run the very successful testing at HH since summer 2018

there's only one decent businessman in this list and it isn't Lenigas or JTP.......

Note the stock price was above 0.92 for quite a while - right up to the 2nd August - then it drifts down to current levels and HEY PRESTO! RNS with some dilution on the 7th..............

Now UKOG must have been negotiating this for months - so any leak is unlikely to have come from there - but the moment they gear up for an RNS - it leaks..............................

The fact it's drifting up now suggests there are no immediate plans to issue more shares to take out Alba et al - and I suspect those guys need $$$$ rather than paper anyway.

AIM - don't ya love it!!!!!