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Initial forecast recovery rates depend very much on the reservoir etc etc - they can range from <10% up to 45%. Secondary recovery (eg using water flood) might take this into the mid 60% range and tertiary recovery techniques even more

In general if you can afford to keep a field flowing and your production revenues stay above your costs you sometimes get over 100% of the initial forecast oil in place - that can be due to a conservative initial estimate, a screw up in the calculations and/or continued oil migration into the structure.

I 've been told that the original Kimmeridge Oil Field in Dorset is one of these

Obviously onshore you have more scope for extending the life of a field by years cp offshore where your fixed costs (eg helicopter support) is so high

Excellent post Quince!!

One quibble - their Weald gas play at Loxley/Dunsfold is actually an appraisal of the old Godley Bridge 1 gas discovery well - so the exploration risk is probably low-medium - what the commercial risks are is an interesting question

Plus they seem to share the structure with IGas - so maybe a joint well?

Problem is the people who told you that Brockham was 26% of the value are the same people who told you it had a value.... until last Friday

There is no reason to accept ANY value issued by this Company I'm afraid. Worse I can't see any one buying them - it looks toxic

Suspect you are right - they probably realized from the UKOG Broadford Bridge experience that they might have screwed things up but went ahead whistling in the dark and hoping something would turn up......

AH ! Desire - another one of my AIM disasters.................

To be fair Desire's Falklands disaster was a straight technical error - they used the wrong methodology looking at the electric logs on site. There would have been no announcement as if the BoD had listened to the crew who wanted to wait for some samples but no, this is AIM and the "news" was rushed out on a Thursday or a Friday I believe. By Friday night they knew it was water and so had the news out by Monday opening.

Angus looks like a very different history of mis-representation stretching over a period of months

Beware Smythe - he was caught a few years back claiming he was a Chartered Geologist when in fact he hadn't paid his dues or kept up the qualification criteria for years.

he's an ex academic who lives in France doing up property.............. seems to have a chip on both shoulders

so they've kept the oil in the tanks all this time? Are they punting on the price rising to $120 a barrel??
No tankers, no sales = no oil
Face it - they probably only got out a couple of barrels.............

Because it never did - it produced at an EQUIVALENT RATE of 1587 barrels a day - but that might have been measured over 15 minutes (or less)

No Oil ever left the site, none is stored and none was ever sold.

It's a plain lie - and leads to the sort of numbers that were being thrown around at Brockham -

INSTANTANEOUS RATES MEAN NOTHING

I'm sure Sanderson has said it goes to Perenco at Hamble (the old BP terminal) and then by pipeline to Fawley...... doesn't make sense not to be able to have two way flow IMHO

And no-one has ever mentioned shipping it across the estuary - which would be madness when you think of it - you'd just drive the tankers round to Fawley instead..........

I believe there is a pipeline under the Solent from the Perenco facility to the EXXON refinery - so they don't need a ship. There is NO WAY Perenco would tell you what they charge UKOG - that's serious commercially important information to them.
Given the fact the oil is high quality and there is no water I'd be amazed if UKOG weren't getting market price - this is a lot better crude than most onshore UK stuff.
By the way there is also a small oil terminal at Shoreham which could easily be used to store oil and ship/barge to Rotterdam if Perenco started to gouge HHDL

As Alan says they must have known, or suspected, things might not go according to plan (or the plans they discussed with the PI's). I still can't believe they went ahead with all the work on isolating the water tho unless they had a genuine hope it would all be OK - plus they did that raise - they'd be crazy to have pulled the wool over the eyes of their corporate mates.

I 'm veering towards the idea that there were signs things MIGHT not be right but they ignored them and believed the optimistic scenario.

I also think it's far to early to write off the Kimmeridge - UKOG have produced 25000 barrels from the reservoir in a well that was never designed for that horizon and they are clearly continuing to work on it , if a little more cautiously. If they even only get 200 bopd from it it will all be jam as the Portland will pay for all the site works.

As for success rates we have 4 KImmeridge tests Horse hill, Balcombe, Brockham & Broadford Bridge - 2 of these (HH & Brockham) were never originally targeted at the Kimmeridge. We have one exploration success - Horse Hill - so a 25% success rate. It's worth remembering that the current exploration success rate in the N Sea is 35-38% - and that's after 60 years of exploration.

The Kimmeridge is in very very early days and it looks as if UKOG are being reasonably cautious.

I'd appreciate Allan's thoughts on this but I expect he's in a state of shock ... I am

It's possible they really thought it was all OK until the point when they sealed off the water zone. at that point they confirmed they'd sealed it off but then nothing happened - no inflow, no pressure increase, no sign of anything coming out of the formation in the oil zone. Nothing but completion fluid down there.....................

Presumably panic, followed by investigation to show that nothing was blocking the hole....... back to the original data, reinterpret and the horrible realization that it was tight all along and that any oil they saw came from the water zone.................... or some very small and now depleted fractures...................

At this point delay the test gear and start talking to the partners - who no doubt were gibbering - more thinking and it becomes clear they got it totally wrong - followed by the defenestration of Lenigas at DOR (maybe he was still a True Believer) and Alba saying they won't put any more money into the Kimm at Horse Hill

Delay delay and get out an RNS re the gas deal (which I believe was actually on the cards some time ago - you can't cut a deal like that in a couple of weeks). Put on flak jacket and retire to bunker sending out the news on the last working day off the month and praying that you can stagger through the summer.

A word of warning to Union Jack devotees - until they produce this reservoir for some time be very careful about the figures they quote

I seem to remember these rocks often contain gas but producing it long term is an issue. Didn't Egdon have a similar field on Teeside that just about washed its face but is now shut-in? I need to do some digging but I remember a lot of "UK's Biggest oil/gas discoveries..." over the last 30 years - Avington, Horse Hill, Balcombe, Brockham................... could be more tears before bedtime...............

The only one that makes any sense is UKOG - I can't see a new entry wanting to buy this pile - you have no idea what else is wrong.

UKOG might do it as they may have a different view on the Kimmeridge potential than our BoD currently has, plus they get a site that they can use to drill a long reach well into Holmwood (or Axx or whatever)

On the other hand there clearly hasn't been a lot of love lost between Sanderson & Tidswell/Vonk with both parties going their own way 3-4 years ago. UKOG would have to take on the abandonment liability and they probably have a real fear about what Angus have done on that site (which is a bit of a mess TBH)

If they do buy it it will be for washers ....................... Angus have essentially declared it dead so no upside for us suffering LTH's

What we forget is that Horse Hill 1 was never drilled for the Kimmeridge - they just drilled through it on their way to the main target which was the deep Triassic play (a dud). It was never cored in either the Kimmeridge or even in the Portland AFAIK.

So they are undoubtedly going to use all the knowledge they've picked up over the last 5 years to get a decent data set from the -2 well which they can read across to the test results from the last year.

I'd expect coring the Kimmeridge and the Portland and a full set of state of the art logs - such as image logs - to enable them to see what they have. Right now it may sound strange but they don't have all the data they'd like from the original el-cheapo well (a Tidswell special).

later wells (Broadford Bridge, Balcombe 2 and Brockham), all have core and image logs and that'#s what people use in the USA for unconventional plays

They produced over 25000 barrels from the Kimmeridge - see the RNS of 17th may 2019

Back in November they stated

10,248 bbl of KL3 oil was produced over 30 days of sustained daily natural and pumped flow from an 83 ft perforated interval. The programme included 9 days of pressure build-ups (or "shut-ins") and downhole sampling. Production was achieved via a variety of choke sizes whilst maintaining stable bottom hole pressures. No formation water was returned to surface; however, small intermittent slugs of completion brine were recorded. ·
KL3 produced at an initial metered sustained natural flow rate of 771 barrels of oil per day ("bopd"), with a maximum
recorded half hourly rate of 902 bopd. The average sustained daily rate over the full test period was 342 bopd.
Prior to the final shut-in period the well was producing oil at a stable bottom hole pressure of around 800 psi.
· Total KL3 gas production to date is 3.5 million cubic feet ("cu ft"), with daily produced amounts through the
enclosed flare falling within the Environment Agency's permitted limits and parameters.
· EWT results to date indicate that the KL3 oil pool "seen" by HH-1 is commercially viable. Consequently, following
completion of the KL4 EWT, continued test production of a commingled KL3 and KL4 oil stream is planned"
"

Having just seen my ANG shares wiped out I'm surprised there hasn't been more negative reaction on the UKOG price. After all Angus have stated they can't get the Kimmeridge to flow at all - and it's just down the road.

Thank God for the extended test which shows you CAN actually produce the reservoir - otherwise we'd be in full panic mode

you have to ask if its another ANG Screw up that has led to this - certainly I feel even better about this mornings UKOG RNS and it's quiet, measured tone having just read the horror show from Lucan and friends..........

Well you go out for a few hours and the roof falls in..... even by AIM standards this is a hard one to live with.

What seems to be clear is that they think the reservoir is very tight - ie it capable of flowing at commercial rates without fraccing. This is very different from saying it was water problem, or a kit problem or an acid problem or a Tidswell screw up problem. It's basic to to the whole play.

I can't see they had this in mind even a month ago when they did that placing - that would have been criminal - and worse, their City friends would never speak to them again.

Looks like when they did set the packer to isolate the water zones they also did some other measurements/ flows/ logs or something that raised a bloody great red flag. They then spent the time checking the results and desperately casting about for a distraction deal. Note it was so bad they didn't even TRY to flow it - I hope nothing technical was quietly placed in a bottom drawer a year or so back...................

Quite a few of us warned about the confusion here about FLOW RATES (which may only be measured over a short time) and Actual production numbers.

Note the same issue applies to Balcombe - the RNS stated "The test utilized Nitrogen and coiled tubing to clean and prime the well which when removed allowed a natural flow at 853 bopd equivalent, not including 22.5% water. A second flow period was undertaken with the well flowing naturally at 1,587 bopd equivalent, not including 6.6% water"

the critical word is EQUIVALENT - we have no information on ho much was actually produced - I don't remember any tankers or sales so very little probably. Until that information is made public I wouldn't trust Angus at all nor will I ascribe any real value to Balcombe .

What is clear is that Horse Hill is a different beast - it has flowed , they have sold a lot of oil from the Kimmeridge and they're planning to continue appraisal. The big question is Horse Hill unique or is t Brockham - or maybe its just a difference in people...............

TBH that's a pretty good RNS - everything moving along , a few delays but would you rather be here than with Angus?

One thing is the 600ft of Kimmeridge contributing to flow. That is a monster number - it really does suggest that, in the right places, the whole of the section may produce . This is what all the Billions of barrels trumpeted by Lenigas is about and they've clearly made a big step towards commercialising it.

The fact that they admit to "unexpected learnings" suggests they still don't feel they REALLY understand the Kimmeridge - hence the totally sane decision to get the Portland on stream first. They've also strengthened the technical team .

Overall this is a major step in moving UKOG away from the wilder end of the Oil & gas business to a proper, well run company IMHO

Kris

I seem to remember UKOG pulling the BDF28 off Broadford Bridge at some ungodly hour of the morning - well outside the announced time - to avoid issues - they had the co-operation of the police and the planners of course.............. and by the time the swampies turned up it was long gone - in fact they didn't notice until the company made an announcement late that afternoon.......... then they intercepted it as ?Angus? had parked it in some obvious spot like a service station......................

Sanderson takes a pretty hard line when it comes to the hand wringing brigade I've noticed