Member Info for ocelot

5% of something modest is better than 5% of a complete write-off.

Can you advise on progress of the first year gas off-take agreement at Saltfleetby as advised in your recent RNS dated 4th July? Asked on 23 July 2020
Our apologies and that of our counterparty. The document has been stuck with Covid-19 constrained legal teams but, as far as we are aware, all commercial issues were settled weeks ago and we look forward to clarifying the arrangement for shareholders during August.

What is holding up the re-submission of the Balcombe EWT application? Asked on 16 July 2020
We believe it appropriate, given the sensitivities, to have full and careful consultation with the planning authorities and other statutory consultees before resubmitting. This process is all but complete and we remain hopeful of resubmission in the near future and at any rate during August.

PS: including 3 new ones asked on the 30th.

Questions answered:

http://www.angusenergy.co.uk/media/investor-questions/

Should have answers to Investor Questions before market opening tomorrow.

Have now exceeded yesterday's total volume of 162.3m.

Volume so far: 167.2m (all figures from advfn)

an 11m+ buy at 0.1988p

2 buys of about 7.5m each.

Total volume so far: 106.8m per advfn

having spent over £60mm (ocelot's figure was £59mm before the last placing)
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Penguins,

ocelot's figure wasn't for expenditure but for accumulated losses in the group accounts to 30/09/19.

What I hadn't appreciated is that the total tax rate on UKOG's activities is 40%.

If we assume accounting losses of £59.153m at 30/09/19 = losses for tax purposes, then those tax loses can be valued at £23.66m.

It just needs some taxable profits to make use of them!

Angus has updated its web page on Brockham the concluding paragraph of which now reads as follows:

... Currently the site has a water replacement pressure support well (BR3), a Portland Sandstone production well (BRX2Y) and the BRX4Z sidetrack. Angus Energy still see’s significant value in the Brockham field and intends to continue production from the Portland Sandstone via the BRX2Y well, while also injecting produced water in the BR3 well to maintain pressure support in the reservoir and to increase oil production. The company is also evaluating the potential to perforate the BRX4Z sidetrack in the Portland Sandstone and isolate the Kimmeridge section to further increase the recovery of the remaining Portland oil pool. Angus Energy hopes to have all regulatory permissions to produce, inject, and perforate effectively in the near future and maximise recovery from the mature Brockham asset.

http://www.angusenergy.co.uk/what-we-do/brockham-oil-field/

Re the Kimmeridge and Balcombe's horizontal into it, ANGS has updated its web page on the site which now concludes as follows:

Angus Energy tested the Balcombe 2Z well in the Autumn of 2018 and achieved strong oil flow rates to surface. However, the oil production rates were restricted by drilling fluids not totally recovered from the well. The company intends to return to the site in Q4 2020 to recover remaining drilling fluids and carry out an Extended Well Test to prove up the commercial potential of the field.

It's too early to write off Balcombe as a failure, let's see how Angus's ewt goes (assuming permission is obtained once the revised application is submitted).

The hope is that the programme of wells can be self-financing.

On Penguins's figures, 1 well needs to be financed by gross production of 75,000 barrels, ie. in a year, 205 bopd or, in a quarter, 4 times that.

Cash generation for the company.

As you say, limited information available at present, but reasonable to assume they believe it is worth making the effort.

Penguins,

Believe cash-generation is at the heart of UKOG's thinking: HH-2z is not (currently?) in a position to generate the cash they were anticipating, Turkey, if successful, offers the prospect of "quick monetisation" (or "capital velocity", in the words of Bill Higgs of Genel).

The Kimmeridge remains a largely unknown zone, with just the 4 key wells (HH-1, BB and Angus's Brockham and Balcombe).

The next test of the Kimmeridge (assuming permission is granted by WSCC) is Angus's horizontal at Balcombe. Expect UKOG to keep a very close eye on developments there (before the end of the year, if all falls into place).

Re the Portland: await developments at HH-1 and HH-2z.

From the RNS of 23/07:

The Basur discovery, made in 1964, whose primary target was the shallow Cretaceous age Garzan reefal limestones, recovered 600 bbl of oil to surface from deeper naturally-fractured and dolomitised Cretaceous Mardin limestones. Core and cuttings contained live oil. Of the oil to surface, 500 bbl were produced over a 6-hour test period, equating to an extrapolated rate of 2,000 barrels of oil per day ("bopd").

Similarly, wells drilled in the 1950s at Resan originally targeted the overlying shallower Garzan but found good oil shows within the Mardin, although short tests were inconclusive. As the Mardin's natural fracture potential was largely unrecognised at the time, it is AME's and the Company's view that the Resan wells were not adequately tested.

Turkey may be a gamble, but isn't that in the nature of oil exploration?

Hopefully, things can proceed quickly, much more quickly than in the UK.

It is certainly the case that technology and knowledge have made advances since the 1950s and the 1960s.

Because of the "quick monetisation" Turkey offers, providing a welcome contrast to the bureaucratic delays in the UK.

It may be a "roll of the dice", but suspect SS has done all he can to ensure the dice are loaded.

The AME press release is right to describe UKOG as ambitious: it may have suffered setbacks, at BB, at HH-2z, with Surrey CC's Loxley planning meeting, but it remains an ambitious company.

Followed by a 1.2m+ trade at full offer of 0.09p.