Member Info for Mirasol

"Some people don't see an end to the testing/exploration/massive expense."

I hate to break the news to to you but it will never stop.

this is a small oil company run by explorationists - if they make money the first thing they do is to go onto the next BIG IDEA. Look back at the past - Rockhopper farmed their Falklands interest to Premier and promptly sank all the money into Italy - not a bean for the shareholders. Cairn found a zillion barrels of oil in India and promptly went out and blew most of it offshore Greenland. History is packed with similar stories

Energy stocks, including eh very big guys, have a relatively poor rate of return - projects overrun, are late or just fail but hey ho! It's on to the next one. and if they do make a fortune they use it to buy someone else out.

TBH that is the Holy Grail of oil investing - being in a company that someone else buys because it's got a good position.

You have to realize that people who found these companies are NOT bean counters - they're people with a vision.....

there is an alternative explanation.....

Maybe people are distrust the company so much they've decided to get out at any price. If you don't believe the BOD you might decide 3.5 p is better than waiting for 2p.......

I'm hanging in but I am braced for all sorts of outcomes - this is Angus not Shell............

I heard it was management change in Noble - the new guys didn't like the FI and ditched it as soon as they could

But this is the ultimate waiting game TBH

as opposed to those who come on every morning and tell us the"Today will be Blue Day" and the price will be over 5p, 6p, 10 p by 12:00, 15:00 close (delete to taste) I suppose??

Not all questions are deramping - I've been in this share for a long time and right now I am totally uncertain what is going to happen - past performance is not exactly filling me with great expectations - I hope to be proved wrong.......

Well the UK onshore is a very small group of people - the PW test team seem to shuttle back and forth between Angus and HHDL all the time and it's in everyone's interest to have two successful operations so I expect there is some cross company discussions - maybe in a suitable local pub...... After all JTP was contracted to HHDL for the original well so there must be some links

Probably not "official" and nothing in writing but both managements happy .............

Warik

I don't think any company informs the market about every little bump in the road

UKOG are probably pretty certain that they can do the programme - on their own if necessary - but they're probably negotiating on details........ Trying to keep the legal bills in check . So far Sanderson has been able to ease out a whole bunch of drossy little outfits - it may take time but I'm sure they'll make it work

And the oil keeps flowing all the time - thats the benefit of production - even from a well test.

Compare with Angus - no real production and clearly something odd going on...

Sorry Warik - I don't normally trawl through this stuff but it's been bugging me for a while - Sanderson is not one to hold back but I couldn't see why they hadn't contracted a rig.

TBH it doesn't matter - I'm sure UKOG have enough cash to carry Alba and they may even have enough to buy out Tellurian - now doing both would be a big ask and might mean another raise but I'm pretty sure all it means is delay while the various options and deals are done.

Depends on the Joint Operating Agreement - they often require partner approval over a certain amount - normally say £ 1 million and they require the Operator to show the partners the bids and there is sometimes language about exactly what the Operator can put in the contract (to protect the partners)

I've been told that in most operations the letter of the law is not rigorously enforced but if someone wants to delay things they dig out the small print and there really is no way around it.

I can't believe it's in anyone's interest to stop the testing and to delay the production paperwork - UNLESS they have no cash - which leads me towards the status of Alba. Their latest presentation is very long on opportunities and totally bereft of any financials.

Page 16 of Alba's latest Annual report states

Material uncertainty related to going concern

We draw attention to Note 1 of the financial statements which, under the heading “Going Concern”, indicates that
the current cash resources of the group and parent company are insufficient to meet the forecast expenditure for the
coming year and that they are dependent upon the receipt of future funding to continue as going concerns. If such
funding is not available, the group and parent company may be unable to meet their liabilities as they fall due within
the foreseeable future.

As stated in note 1, these conditions indicate that a material uncertainty exists that may cast significant doubt on
the group’s and parent company’s ability to continue as going concerns. Our opinion is not modified in respect of
this matter"

The UKOG £ 3 million raise would fund all of Alba's share of the forthcoming planned programme...... and leave some over for beer money

Yin Yang posted "Somebody knows what is going on within the company that is causing the drop. The share price falls because there are more sellers than buyers, but why keep selling at close to now the all time intra-day low of 3.325p on Feb 27th 2019"

That's what is starting to concern me - people are still bailing out at historic lows when there is a promised positive news flow around the corner -

the only reason to get out at a vast loss at 3.75p is because you think it might go a lot further south - "save yourselves!!"

Personally I doubt it but there are clearly enough people who do think that way to keep this share drifting down.........

Argos

"The money for the rig and all the present EWTs and the drilling programme is already in place within HHDL and had to be before the permissions were issued by OGA."

Well a wise man would hope so but I believe the OGA does not actually check on day to day financing - only in a very rare case (and this may be it).

But there are other steps

Firstly HHDL may have some internal approval system that requires unanimity from the shareholders to go ahead - I don't know.

The other thing is that HHDL only own 65% of the Licence - Tellurian own 35% - and it is probable that unanimity is required for contracting a rig and drilling - that's quite common apparently

There is a third step - the AFE ("Authorization for Expenditure") which is sent out just before things kick off - it's another chance for the partners to put a spoke in the works (or "protect their investment") - depending on which side you are on...

Just because UKOG has the cash doesn't automatically mean that the other s do or that things can progress on SS's timetable I'm afraid

RU4

I think you are correct - if a partner can't or won't pony up the cash call for the rig then the Operator has 3 real option:-

1. Park the whole idea - can't see SS doing that

2. Offer to carry the dissenter but they lose some of their interest - quite likely with Alba I'd hazard

3. Go sole risk - this effectively throws the dissenting party out out - it's expensive, very slow (months and months normally) and you need a herds of lawyers to make sure you get it absolutely right - can't see that happening here as it would delay drilling into 2020.....

where is the magical rig coming from? It's still turning at West Newton I understand?

Correct

It takes time

but Angus need to prove competence - GL can say what he likes but the events of the last couple of years hang over this share like a dark cloud. No institution is likely to come anywhere near it until they show that they know what they are doing

The well test is vital for that reason as well as for the technical reason

Ninetails

As posted several times the rig at West Newton is the BDF 28 which drilled Broadford Bridge - West Newton looks quite risky - they'll probably find some gas but it may not be commercial.

I understand it is the most likely rig for Horse Hill 2 as there is no other medium sized rig currently available in the UK BUT someone needs to sign a contract!!!

Wizard

these wells seem to take 30-40 days to drill - but the horizontals (which will be 1z & 2z) may take a bit longer . AFAIK HHDL haven't started on the cellars for HH-3 etc as these are production wells and are included in the planning permission which the Council are considering

Think they missed a slot on the rig but they could 'fess up....

no-one believes they are superhuman do they??

I could see JTP having a look but GL? I doubt it...

and they probably weep at some of the posts on here - relentless ramping every day, relentless de-ramping every night ....

Don't get your hopes up re the CPR ,

When it comes, it will almost certainly only focus on the Portland. No consulting reservoir engineer is going to sign of a billions and billions of barrels across the Weald because a) the rules are very strict b) it's not their training.

Taking tiny pieces of data and extrapolating them across vast areas is the Geologists job - or very large Australians with a stetson on.

The Res Eng's will give you a very carefully worded document saying the Portland is looking good but there are issues (there are always issues until the last drop of oil comes out = CMA big time) and the Kimmeridge might be big but we have not enough data to tell (there is NEVER enough data for an engineer)

You just have to stick in here and for the long term - there will be ups and downs as the day traders and rampers and derampers play their games but I think UKOG is now going to be around for at least 10 years - how big they get and where the SP goes is anyone's guess right now.

B2H

In a perfect world - yes - they want to be rid of the liability once and for all.

This was a serious issue 10-20 years ago in the N Sea as minnows started to buy old fields. National Authorities, like the OGA, made it very clear that if you sold a field to a minnow and they didn't abandon it they still had the legal right to come after the original seller. Now basically the big boys still underwrite the Ultimate liability but there are still advantages as it was explained to me.

Firstly you defer the cost of abandonment - maybe 10+ years at say Saltfleetby - the time value of money means that this is a serious advantage - even if you just stick the cash in a Building Society a£ 2 mm it will accumulate a lot of cash- and hey! when did it ever hurt to kick the can down the road?? You'll be long gone (personally) before some other schmuck in the company has to deal with it.........

Secondly costs of abandonment tend to fall in real terms (especially offshore) - specialist contractors, new, bigger, more efficient kit, mew methods. Most offshore fields are now abandoned in money of the day costs (totally ignoring inflation) that are 50% of the estimates made 10-15 years ago. Onshore.. maybe not but you can always hope.

So GAZPROM are still on the hook probably but I doubt it worries them

Excellent point B2H

" conditional on the prior acquisition of the field and licence by a third party abandonment operator."

But in 30 years investing in UK Onshore and offshore I've never seen that phrase used. There are companies who specialise in offshore abandonment etc but they are never Operators on the Licence. You'd have thought Angus, as an OGA approved production operator would qualify themselves (UKOG wouldn't right now...) so that really leaves IGas or Egdon onshore UK - it's very much Egdon's back yard but what is in it for therm? 49% for a quid???

An alternative would be to bring in someone like PW Well test or Moorhouse - the contractors - but I heard that IGas tried to sell some old Midlands fields to PW and it fell through as the OGA weren't comfortable that PW could "operate" properly or something similar........

Biggest worry is if the OGA pick up on his using cash set aside for abandonment as working capital - they might ask him to stick it in escrow - and £2 mm to fully abandon 8 wells looks very light to me