I’m not sure. We’ve seen another competitor, a colleague of ours in the onshore industry, IGas, that’s privately owned. You can end up with an awful lot of problems with changing shareholder base that as a listed company with a broad shareholder base we don’t have. That’s one reason. I think the second reason is, our retail market won’t not give us access to the enormous levels of capital that some players have got, particularly for their offshore projects for exploration abroad. We’ve certain of our companies go abroad and end up with £300m raises, which they are able to do through these very, very, large funds. We’ve closed ourselves to that. We’ve always said we are a nimbler, smaller company and we’re happy to raise much less but we like to be able to raise, and quickly, when we see good opportunities. And I think that’s the best part of the AIM. What we have to do is to restore confidence that we’re able to deliver and then that advantage will be back with us.
George Lucan of Angus interview in D or D11 Oct 2019 12:45
So is the Weald oil dream over?
“No, I really don’t think so”, Lord Lucan said.
“I am comfortable that the oil is in place. But it does seem to want to remain in place and that’s the problem.”
The difficulty, he says, is that the Kimmeridge oil appears to vary over just a short distance. It flows at Horse Hill, he said, but it doesn’t flow a few kilometres away at Brockham or at Broadford Bridge, in West Sussex, which is closer to the supposed sweet spot.
“If we look at the whole Kimmeridge play it is really an unknown.
“It is something we said in our original prospectus that this was an unconventional play. It was not well known.
“I’m telling you, as a layman, that I don’t think any of the technical teams know very well yet.”
Asked how many wells would be needed across the Weald to be sure, he said:
“Well in the order of hundreds, which no one can afford. Which is just as well because the residents would be flinging up their arms in horror.”
The executive chairman ran into a disastrous minefield of compliance with some share dealing. I know him personally and I believe him to be a man of integrity but somewhat hopeless with paperwork, as it transpired, and I’m quite certain he didn’t benefit from any of the breaches of compliance that ultimately led to his resignation. When he resigned, he left his colleague, Paul Vonk, my predecessor, as lone executive member of a board, which is an extraordinary thing for any company, and I think a very poor example of corporate governance. He left it in that situation for many months and then fell out with Jonathan Tidswell, which is never a good thing to do. Jonathan is not a majority shareholder but he is a significant one. Generally speaking, a good CEO takes reasonable heed of what a significant shareholder says and feels. Initially, I was slated to come on to that board as non-executive director just to add some eyes and ears. But, as you know, the falling out between Jonathan Tidswell and Paul Vonk led to a shareholder requisition and ultimately Paul’s resignation. At that point in time, Jonathan, the NOMAD and I had discussed what role I would come in as and it was suggested I come in as interim managing director to try to get a decent board together. And I hope I have gone someway to doing that. I’ve appointed a proper finance director and a proper technical director and an experienced non-executive chairman. Generally speaking, chairman of public companies should be non-executive. He’s got a great background in the industry. And we’ve retained one other non-executive director so it’s a nice functioning board
Stephen Sanderson, UKOG's Chief Executive, commented:
"The HH-2 coring programme, a key step towards delivering the correct placement of HH-2z's horizontal section within the field's most oil productive interval, now also has the welcome task of helping confirm a deeper oil water contact. If correct, the deeper contact will have a potentially significant positive impact upon oil in place and recoverable volumes, a welcome development."
CAN YOU PLEASE PROVIDE SOME SENSITIVITIES OF YOUR FREE CASH FLOW AT DIFFERENT LEVELS OF OIL PRICE?
“To start with, due to our low-cost production it is worth noting that we breakeven at a Brent oil price of $17/bbl. Going forward in 2019, for every increase in the Brent oil price of $10/bbl, we would expect to add c.$2.5 million in free cash flow on a monthly basis.”