Member Info for Penguins

Ocelot,

a company stating immediate future when it didn't have authority to do a placing until after a meeting over 2 weeks in the future would be odd. Near future doesn't exactly sound as though it isn't needed for a while.

But maybe you're right the placing will be after the drill arrives - stranger things have happened, certainly never say never - but why would anyone agree a placing just after the rig arrival which is likely to see the SP rise, if only temporarily, when there would be more opportunity to sell during a (likely) rig arrival P&D. (PS Ozzy the reason to consider gambling)

Maybe they'll announce the placing and rig arrival at the same time allowing the placee to (forward) sell into the (hoped for) rise - even though forward selling will be explicitly forbidden.

Nobody knows until it happens, unless there's a leak.

As for timing I suspect that the Turkish authorities would allow a delay if needed for any reason as the site has been prepared indicating intention to drill.

As for blatant misleading (or missing out the bad news) here's why the horizontal was stopped in the RS of 12 November 2019:-

'The good, clean horizontal trajectory, together with the continued indications of possible improved reservoir quality and significantly lower pressure-depletion than expected, led the Company to decide that there was little technical or economic benefit in pursuing drilling to the maximum planned c. 3,000 ft horizontal trajectory'

Whereas in the 2019 - 2020 annual review somewhat different:-

'The horizontal drilling of the Portland HH-2z was completed in November 2019, with the length of the horizontal curtailed by the intersection with natural fractures in the reservoir and the onset of drilling mud losses at the toe of the well.'

The November version is misleading (and looks untrue - the reason for the decision was not as stated) and meant the 23 December 2019 revelation of water ingress (A Merry Xmas to all our Readers) was a surprise to pi if not to UKOG.

Did they forget what they had RNS'd in November?

Jaffy,

Hopefully lower than the herd but I don't have a target and I might just let what I have ride. Watch out for when UKOG twitter stops being filled with ramps for other shares - though even that can fizzle out quickly - and take a view on the 'target' price (here and on twitter) as it's pretty clear that isn't what the herd sell at.

My posts are usually about long term expectations, not trading though.

Really, 4 years ago.

This was the sort of rubbish that sent the SP to the heights of 10p+ that for some reason, despite it being only of academic interest, posters still refer to, if sometimes obliquely.

'RE: Long way to go10 Apr 2021 10:06
There may be a long way to go but we know from the past and from recent trading that UKOG can go a long way in a very short space of time.'

RNS 30/6/2017:-

'I am delighted to inform shareholders that the discovery of light, mobile oil, seeping out of fractured Kimmeridge limestones and shales, corroborates our pre-drill prediction that both BB-1 and HH-1 are likely part of the same Kimmeridge oil deposit. The presence of such mobile oil outside of any structural or stratigraphic trapping mechanism provides significant supportive evidence that the Kimmeridge section across the central area of the Weald Basin contains a continuous oil deposit of national significance. I believe this result will be TRANSFORMATIONAL for the Company.'

Easily said by SS, not so easily delivered

Ocelot,

that's the difference between a technical post with information/data and an opinion post, or a post about something easily looked up (OP, volume, SP).

Ocelot,

If very little happens in 'transformational' Turkey that will confirm the market's perception not change it.

...but it depends who holds the cards as to what the highest price UKOG can get away with is.

UKOG definitely need the cash to fund its obligations under the agreed work programme for the Resan Licence, and you only need read the GM notice, not this board, to know that.

Ocelot,

there's a difference between saying a placing is coming, because the company has said one is and has said ir needs one, and wanting one to happen.

No great hurry - or unable to get one away even at a discount to the current SP? Unless you are party to their efforts you are, like me, just guessing - but unlike a seller a buyer of billions of shares will want the lowest price possible?

Despite the OP it's pretty clear that the SP is dropping with the 'real' spread 0.18p to 0.185p. Only 5 trades out of 74 (and less than 2% of the volume) have been above the mid-price of 0.185p today, the last just after midday.

UKOG need to get on and do the placing - I suspect a placee won't be wanting a price based on the rig arrival P&D as every day that passes sees an ever lower 'bargain' price - but maybe that's all part of the plan to get a placing away.

Ocelot,

The operating margin in Turkey is irrelevant to today's profit margin - which is what today's OP determines - which seems to be the title of this thread.

My post was indeed specific to HH.

With no production in Turkey there is no 'extra profit' for UKOG.

But the operating margin for Turkey is derived from the E Sadak field - where production is from about 8 wells and has been operating for about 7 years. I also suspect the operating margin for E Sadak does not include the cost of the wells needing to be drilled on a regular basis to try to maintain production levels for the field because of the rapid decline in production.

There's been no mention of the results of the recent campaign at E Sadak where 2 more wells were planned for late 2020 and 2021 - but as UKOG haven't mentioned anything about production at E Sadak, despite UKOG calling it a producing lookalike that's no surprise - though if the results had been good (whatever that may mean) maybe they would have done.

Ocelot,
UKOG are loose with time scale wording, usually raising expectations of something happening much sooner than it does. As the timescale was given before the GM what phrase could have expressed that the fund raise would be happening in the near term. There's still nearly 2 weeks until a deadline that may be easy to move as long as intent to start drilling is clearly shown.

Time will tell, certainly seems like the market is waiting to see what happens.

You think they were statements as to the situation at the end of last September?

Annual Report and Accounts, For the year ended 30 September 2020:- '....that in the current pricing environment, the significant cost reductions achieved at Horse Hill over the year and the forecast reduction in water handling costs via the conversion of HH-2z into a water injector means that, going forwards, Horse Hill production is forecast to be profitable.'

In the obtuse way UKOG make announcements this means the production from HH-1 in mid April was not profitable 'current pricing environment' - and at the end of the Chief Executive's statement 'Finally, with the prospect of stable profitable production from Horse Hill.....'

Prospect meaning:- 'the possibility or likelihood of some future event occurring.'

The Cheif Executives statement has many statements about 'current' (at that time) activities.

Ocelot,

Maybe they are having difficulty getting any interest.

Troll,

Extra profit? Wording in the annual report and accounts indicated in mid April that HH was not then in profit., Has the higher OP moved it into profit?

Zoom:-

'zoom Posted in: UKOG
Posts: 1,734 Price: 0.145
No Opinion
RE: tanker 11 Dec 2020 11:25
If everything is okay I expect UKOG to open up the chokes very slowly over the next few days and we should be up to 2 or more tankers a day. IMO.
GLA.'

average production December, not 430bopd, 82 bopd plus 34 bwpd - even with the water tankers that's only about a tanker every other day.

'zoom
Posted in: UKOG Posts: 1,734
Price: 0.975 No Opinion
RIG 21 Jul 2019 16:46
IF. the rig is at Caythorpe near Bridlington now, it has been there for only 12 working days. that is presuming that the Moor house men work Monday to Friday. I reckon it will be at least another two to three days to drag out those tubes and cut them up, and if so this could be the week that we finally see the rig arrive a HH... This is IMO.
GLA.'

&

'RIG 14 Jun 2019 14:38
It appears to me that we could see the rig on site at HH on Monday morning, because of events at west newton.
I HOPE I,M right.
GLA.'

Rig arrived at the end of September.

&
Price: 0.25 No Opinion
RE: Horse hill ... ongoing plans.... for Kim and Portland 03 May 2021 16:31
Penguins. You are correct, but the figures you quote are way out of date and I will stick to what I believe to be true at this time, and so will stick to my 4p share price for the next 3 weeks.'

The closing mid price SP was 0.2p 3 weeks later

Ocelot,

yes they could also use the funds to support their UK operations - like the GM notice pointed out for next placing:-

'In order to deliver the Company’s stated strategy and growth objectives, it will require further funds in the near future for, AMONGST OTHER THINGS, its funding obligations under the agreed work programme for the Resan Licence and any of the new Licence applications should they be awarded to the Company and its partner.'

Ocelot,

It's also AIM so being wary of company statements / actions is also nothing unusual.

I wish I had your optimism about the potential of any of the defined projects when it's apparent that UKOG are holding back information. So far it hasn't been a positive when UKOG have failed to be open, and that continues with what is happening at HH, of course that gives certain posters licence to claim that nobody knows what's happening - despite no indication anything has changed.

Ocelot

Beware of the word 'potential'. Until UKOG are clearer about what they expect with an explanation why the outcome should be so different to E Sadak for Basur / Resan and to Godley Bridge fot Loxley that potential might not be significant.

As for geothermal at HH or BB, perhaps some information about why that's going to work - there's a suspicion it's more hot air than hot water.

Ibug,

I wouldn't get too hung up about a map that AME could have forgotton to update.

But your first sentence still holds true as SNR exited at some point despite having the cashflow and knowledge from the E Sadak field - or perhaps because of it - and no other Turkish company took up the 'irrisistable' opportunity that UKOG did.

Horse Hill

Annual Report and Accounts, For the year ended 30 September 2020:- '....that in the current pricing environment, the significant cost reductions achieved at Horse Hill over the year and the forecast reduction in water handling costs via the conversion of HH-2z into a water injector means that, going forwards, Horse Hill production is forecast to be profitable.'

In the obtuse way UKOG make announcements this means the production from HH-1 in mid April was not profitable - and at the end of the Chief Executive's statement 'Finally, with the prospect of stable profitable production from Horse Hill.....'

Prospect meaning:- 'the possibility or likelihood of some future event occurring.'

Brent Crude was over £48 in mid April, now over £51 - so assuming - and I am - that they are producing similar volumes of oil and water to January/February (about 100opd average) that's about £300 per day extra - whether that has made HH profitable nobody outside the company knows.

Placing/Spud

If UKOG announce the spud before a fund raise it would be a surprise as it's pretty clear they need more cash to be able to fund the drill, from the GM notice:-

'In order to deliver the Company’s stated strategy and growth objectives, it will require further funds in the near future for, amongst other things, its funding obligations under the agreed work programme for the Resan Licence and any of the new Licence applications should they be awarded to the Company and its partner.'

Any company taking on drilling would want to see enough cash (not hoped for funds) for the drilling before starting, not sure the operator/driller would take a different view.

But why would a placee be happy with a post rig arrival discounted price rather than pre rig arrival discounted price - a condition of the placing might be it has to take place before the rig arrival is announced, let alone spud.

Of course if it took a few days to announce the placing and the rig arrival or spud was then announced - a bit of forward selling would help.

Justbe

The only reason to participate in the open offer would be if the price is lower than the market price. as UKOG can't take the risk the SP will drop below the offer price as has previously happened after a placing what they need will be from the placing.

Holders wanting to average down may hold off buying until the last minute waiting to see what happens to the SP, choking off at least some possible demand.

Troll,
It's actually in the directors interest to keep the price low until early July as that's the first share purchase date, also why would a placee want to miss the rig arrival P&D? Placees don't want a high SP, nor will the BOD.

Anyone taking confetti won't be hanging around hoping the Basur-3 drill is successful unless the SP drops below the placing price and stays there.

They raised twice

02 July 2018 UK Oil & Gas Investments PLC
("UKOG" or the "Company")
Completion of £5 million Institutional Placing
UK Oil & Gas Investments PLC (London AIM: UKOG) is pleased to announce that it has raised gross proceeds of £5 million via a placing including two institutional investors.

Details of the Placing
The issue price of 2 pence per share represents an approximate 5% discount to the closing price on 29th June 2018. A total of 250,000,000 new ordinary shares have been placed. Application will be made for these new ordinary shares to be admitted to trading on AIM and it is anticipated that trading in such shares will commence on or around 9 July 2018.

Use of Proceeds
Together with the funds raised in June, these funds will allow UKOG to embark on its projects' current 18-month work programme.'

The June placing was on 15 June 2018. The price on 13th June was about a penny. The price had risen on 14th June to close at 1.5p or so (note the near apology for the placing price), and the placing did indeed drop the price to less than a penny (about 30%)

So both placings dropped the SP, so why would you buy before a placing. The price did rise in anticipation of the ewt, the placings held the SP back so who knows how high it the SP might have risen above your 2.94p.

'The placing's issue price of 0.9 pence per share represents an approximate 12% discount to the closing price on 13th June 2018, the date the pricing of the issue was determined, and prior to the receipt of the Oil and Gas Authority's Horse hill Extended Flow Test ("EWT") consent as announced on 14th June 2018. A total of 611,111,105 new ordinary shares in UKOG have been placed with new and existing investors.'

Shows how sneaky they can be - raise £5.5mm, and then when the price rises raise another £5mm.

Wizard,

'Maybe there are those who can't remember what happened with the UKOG shareprice after funds were raised for the Horse Hill EWT but the shareprice after touching 1p went to 2.94p.'

But in fact the SP was already rising because of the start of mobilisation of kit for the ewt. Closing price when the fund raise was announced ar 16:18 on 2 July 2018 2.3p, July 6 closing price 1.9p - 17% lower. You would have had to be careful to have made a profit as the SP was fairly volatile following 2 July with the SP eventually dropping below 2.3p (closing price) on 13 September 2018, it never again reached 2.3. Apart from odd spikes that marked the start of the steady decline to the recent lows some 30 months later, only a change of course and more vague promises has helped the SP recover to less than a tenth of the early ewt SP.

Obviously short term traders were happy but there were a lot of posters predicting the only way the SP was going was up - based on what UKOG said. Hanging around for the expected ewt results was not a good idea though.