Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Ibug,
UKOG appear to be playing fast and loose with the share numbers they're filing.
Claiming the 1.3 billion shares that were priced at a vwap no later than early August were issued after 8 November when the market was informed cannot be truthful can it? At the same time (8Nov) they appareetly issued 1.4+ billion (loan note) shares at a price of 0.025p although a vwap of that level wouldn't have been available until late November.
Were the shares given out so they could be sold into a dropping price - sort of UKOG effectively aiding forward selling?
As you point out no subsequent share issued have been filed, you would think going into a GM the minimum would be to file how many shares are in circulation rather than filings made late about shares issued last year.
Whilst UKOG has RNS'd the subsequent shares issued that take the number of shares in circulation to the maximum allowed from last years AGM has UKOG issued shares already, knowing they can get away with declaring them at a later date in exchange for loan notes in excess of the authority given at the AGM in expectation of a pass at the GM?
....... and that is probably not this sort of rule stretching (not informing the market asap shares have been issued) that caused the GM to be abandoned.
Ocelot,
The issue isn't the lack of plans. It's the lack of detail about them, even for those they have a considerable amount of information about.
HH - years of data, a June 2019 RPS Kimmeridge report produced during testing, Portland determined an 'outside verified' decline curve for HH-1 resulting in a NPV valuation of £0.8mm. Comments in planning applications for other sites that the Kimmeridge at HH and BB was uneconomic (Loxley), that delay at HH and Loxley was due to the legal challenges (BB) - but no full explanation as to the reasoning in RNS - just inaction.
Loxley - poor checking of the CPR with significant error/s, obvious UKOG meddling in the outcomes and expectations. But at least there'sa CPR even if the input data is Spa rs e. Most companies mention at least 'interest' or visits to data rooms. Interest seemingly something they are happy to mention with the gas storage project.
Turkey - initial expectations driven by UKOG making false comparisons with distant fields in Kurdistan and nearer fields in a different reservoir whilst not detailing information about a poorly performing field on trend nearby. Abandoning the main targets for reasons that should have been apparent during due diligence when farming in. Then Pinarova based on weak supposition because it was cheap - suggestions from AME UKOG were paying 100% (not a positive) and then ploughing on when it was pretty obvious it was a hopeless cause.
Leaving the money pit of Portland Port: UKOG attaching themselves to the Solent hub some 80km distant, perhaps for the credibility of being able to mention ExxonMobil and spending cash raised without full explanation of how this will benefit UKOG investors (who presumably in the main invest for short term results) near or medium term, in the hope of receiving government support being decided later this year.
Ocelot doesn't give suggestions as to what UKOG should do going forward, here's mine though:-
Only progress Loxley with a farminee in place
Sell the Portland Port project
Immediately convert HH-2z regardless of the Supreme Court - though should have been done as soon as all technical clearances and permissions were in place. Get the seismic shot and get a CPR..
Either farm out with a carry or get out of Turkey.
and stop pushing the boundaries of honesty about what you're doing.
Northfork,
Just one point - those so called 'derampers'. Did it never occur to you that maybe those posting that the projects would fail, certainly those that explained why, it wasn't deramping, it was being honest - it wasn't what cause everything to fail though.
As for red tape and judges I suspect that the technical risk was, and is, far higher than the risk of losing to the challenges - perhaps that's more of a reason for UKOG dragging their heels at HH and not expediting getting the planning conditions passed for Loxley - and of course spending all the cash raised on Turkey and the gas storage project.
It's been over 3 1/2 years since UKOG farmed in to Turkey - no protesters or legal challenges there yet progress hasn't exactly been fast - probably for the same reason, the acreage just isn't that good.
Good luck with He1 - remember that not every poster branded as a deramper is necessarily deramping.
As for today's RNS - usual smoke & mirrors - who raised questions about the proposals, why were they accepted as credible enough to stop the meeting? All seems a bit amateur, and until UKOG get authority to issue more shares theoretically no more loan notes can be converted - regardless that the SP (and vwap) is below nominal value - if it wasn't for the lack of authority to issue more shares I suppose they could convert at a premium to the SP though, if they were mad.
Maybe,
but the first tranche of 'equity shares' were issued and sold around early August (from the vwap price they were converted at (0.0504p and the large sells around that time) but not announced until November.
I have no idea if this would have been within the rules about keeping the market informed of the number of shares in issue, but otherwise the holders of the loan notes would have lost a lot of money selling any time near November as the SP was around 0.03p
I don't think nominee account shares can be voted except by the owner. When UKOG give actual votes rather than percentage of votes submitted the number is usually very low, yet nominee accounts are where a large percentage of shares are held - those holding over 3% had 76% of the shares (though the list on the UKOG site is as at 9 Nov 2023).
For example at the 2023 AGM about 600million votes were cast when the total shares in issue were 21 billion - less than 3%.
I'm afraid that ocelot (surely ostrich) fails to mention that UKOG probably has loan notes of £1,660,000 outstanding (ie not converted to shares yet) - equivalent to about 50% of the market cap - ie more or less equivalent to their proposal to issue 50% more shares - which apart from the hazard of being below the nominal value explains the need for this meeting..
I put 'probably' because the £1,660,000 includes the 2 committed tranches, each of £500,000, the last to be taken before 16 February (a coincidence?), but UKOG hasn't mentioned them since the RNS announcing the loan note raise in June last year - though UKOG not mentioning something perceived as negative is not unusual.
Ibug,
The question is what are their obligations to the CLN holders? If they do any sort of meaningful placing they will swallow up the newly available shares. But will the CLN holders want another £2 million loan notes - though they could do a deal with anyone wanting to take over UKOG without buying in the market - so further stuffing share holders.
Neither.
No more raises or CLNs except to fund their equity in drilling, not for the vanity Portland Port with SS hobnobbing near ExxonMobil etc when they're miles to the west of The Solent.
First slash salaries, give shares instead for a year to the BoD, and part pay below board level in shares. Get rid of all consultants - concentrate on HH and Loxley.
Divest Portland Port it's an infrastructure project with long term outcomes that don't fit with the short termism of drilling for success - even if success doesn't happen.
Get a partner in to drill Loxley at any price, even if they want 75% equity (or more) to pay 100% .
Get the HH water injector up and running.
Ditch Turkey, AME farmed it outbecause the licence was rubbish - probably farmed out because the lookalike E Sadak field was performing badly, and Resan Basur was worse - it was going to be relinquished without someone else paying for drilling.
I know I'm negative about Loxley and even the water injector at HH but without drilling in the near term this company is dead. Hopes of government grants maybe allocated next year, or a large partner in UKEn isn't going to generate funds for exploration/appraisal this year.
Not sure what I would do about the PPP farm in. Their silence since early December about their workover wells is ominous. Without success there the farm in is unlikely - though at least they have some headroom for placings - but probably not for £4.6mm - and it would be foolish to shoot the seismic then not be able to fund the well.
But stop trying to be BP - it' an AIM oiler.
When the reason UKOG has consolidated appears to be because the SP was dangerously close to the nominal value, and likely with bad news about to be announced to go below, and therefore they wouldn't be able to issue more shares in exchange for loan notes it has already given out (£1,160,000). They also needed authorisation to issue more shares as they had already used up the previous authorisation, 50% more.
Without 'news' let alone a something actually being done successfully, there's no reason for the mcap to rise when more shares are issued as UKOG has already had the £1,160,000 and quite possibly spent it, though there is the committed £500,000 due before 16 February. At either 0.001p or 0.01p the new total of £1,660,000 in loan notes outstanding would require more than 50% more shares requested to be issued.
Pre consolidation, with a SP of 0.01p that's 16.6 billion shares needed vs the request for authorisation to issue 14,767,500,000 shares.
Or post consolidation with an SP of 0.1p that's 1.66billion shares needed vs the request to issue 1,476,750,000.
Of course the CLN holders can't convert that volume of loan notes all in one go but over the next few months before the AGM they might have a good go at it.
So it looks like consolidation was just to recharge the confetti machine, the change in nominal value putting off the need to do it again until the new SP went down to the new nominal value of 0.0001p.
Not sure what happens if the GM vote goes against UKOG?
Ibug,
when I saw your post with this 'HORSE HILL LATEST: UKOG planning a downhole pump changeout and scale removal programme to enhance oil production from HH-1. Further updates to follow.' from memory I thought you were quoting from the 5/11/2020 RNS :-
''As previously announced on October 1st, the intervention's objective was to optimise oil flow by reperforating the full Portland oil producing section, inserting a new production tubing string and thus enabling the downhole pump to be placed at a deeper level. Originally the intervention was planned for April/May but, due to the COVID-19 lockdowns in both the UK and USA, a further unforeseen 6-month delay was introduced. Further updates will be reported when the PBU data has been fully analysed and interpreted.'
Of course I was wrong, but the promise of updates was there - anyone remember an update mentioning the findings of the PBU? Me neither.
But if the oil and water production is anything to go by I suspect the interpretation wasn't that positive. The daily production averages from OGA figures before and after the workover:-
Aug 2020 oil 128.4bopd water 45.9bwpd - sixth month of production
Sept 2020 oil 93.3bopd water 41.4bwpd workover started
Oct 2020 oil 47.3bopd water not reported workover
Nov 2020 oil 101.3bopd water 39.4bwpd
Dec 2020 oil 81.8bopd water 34.3bwpd
Jan 2021 oil 102.3bopd water 54.2bwpd
Feb 2021 oil 99.5bopd water 44.3bwpd
\Mar 2021 oil 104.7bopd water 50.5bwpd
Apr 2021 oil 101.1bopd water 46.8 bwpd
May 2021 oil 100.2bopd water 40bwpd - last month of ave. over 100bopd
So that workover that included reperforation, 8 months after production start at over 300bopd , with production dropped to 128bopd didn't seem to help at all.
I suppose UKOG will mention when it's done. or even when they do it - but will they mention daily production levels of oil and water - they haven't since 2020?
1000% rise guaranteed (assuming the SHs agree to it) next Monday morning - whoopee. Unfortunately not because of a UKOG success but a consolidation.
...........and it comes with the added bonus of an extra 50% shares they can hand over (mostly) in exchange for the remainder (£1.16mm) of the possibly already spent £2.5mm CLN, opportunities to average down without the risk of the SP being taken below the new nominal price for a long time.
and there's UKOG taking the 'committed' £500,000 before 16 Feb, although if 'committed' is the same as UKOG 'planning' something, maybe not
SRBS,
The timing of farming into Turkey (July 2020) was a distraction from HH as in the June 2020 Interim Report UKOG finally admitted that the repair to HH-2z hadn't worked and producing a lot of water, and UKOG knew, but didn't reveal, that HH was producing a lot of water as well.
More likely UKOG realised that HH was a dud , hence doing nothing there since, and needed a new story to spin - and they also would have known that E Sadak wasn't very good (lookalike to Basur-Resan) which is probably why they didn't give any details of its production, and compared it to fields in Kurdistan.
Not sure that anyone should have any sympathy for SS.
Does anyone believe that anything they do in the Kimmeridge at Loxley and Horse Hill will expand on the knowledge that they already have from the cored, logged and extensively tested Kimmeridge in BB-1/z.
Waiting for Loxley and Horse Hill is just an excuse for doing nothing since early 2018 in this retention application - which may seem plausible to planners not aware of the huge amount of data collected in the drilling and months of testing already.
They just want to hang on to the site as there's scope to string along punters with promises of further work 'in the future' - which, if it's after HH and Loxley, it might require a further extension assuming they get this extension.
If the other site uses are viable why haven't they fleshed out what those plans are to investors in the nearly 6 years since BB testing ended.
As for Portland gas storage it looks like a vanity project that, as I've previously posted, may be an opportunity for a sinecure / escape route for SS by floating/selling it off from UKOG.
NP,
all true - but UKOG has over the years over stated the likelihood of success, and for the one success(ish), HH, made claims during testing about production that weren't ever reached (or likely ever to be), and has never RNS'd oil / water daily production or a production forecast since soon after production began nearly 4 years ago.
UKOG has avoided scrutiny of HH by not getting a CPR on it - preferring to get reports, and making internal calculations that they use but don't publish.
UKOG influenced parts of the Loxley CPR (gas price resulting in the highest NPV and single well production level) and there is one definite erroneous conclusion, which importantly justifies the GWC inferred at Alfold which in turn justifies the closure UKOG map and thus the volumetrics that feed into the NPV.
As for Turkey it was (and is) disgraceful how they failed to reveal any production details of the E Sadak field despite it being operated by AME and described as a lookalike to Basur. In their 2022 Annual report AME reported 0.5mmbbls 'reserves' and 250bopdproduction from multiple wells, did UKOG do any due diligence on what they were told about E Sadak? As for Pinarova drilling downdip of a well that tested oil cut water was never going to work, but UKOG persisted for 8 months with the sham that testing a zone with an oil smell was worthwhile - coincidentally when there was nothing else happening.
But not everyone is able to understand and scrutinise UKOG's claims and thus rely on the honesty of SS when he proclaims how good every new project is and those that predicted failure, and justified why, have been repeatedly ridiculed as 'greens. nimby's ctc on this board and elsewhere and even blamed for the poor share price - as if being right about the likelihood of failure caused the failure.
Shhhh.
Once upon a time that many shares were worth £10,000.
I sometimes wonder, when ocelot informs the board UKOG has the highest number of trades that day, or another poster rejoices in a 50,000,000 buy, whether they realise that a SP of just over a hundredth of a penny means 50,000,000 shares cost little more than £5,000.
Maybe ocelot has the SP filtered along with anyone who doesn't think everything UKOG does is fantastic and failure is always a precursor to success, because UKOG says it is.
Ibug,
'Is it going to be another day of 0.011 0.012 ?'
Obviously not. Way things are going it will be cheaper to buy in the market than UKOG can 'make' those golden tickets for. I wouldn't know if, or how many, any other companies have managed to get their SP below nominal value - but UKOG is sure trying.
Ocelot,
Doesn’t it worry you that UKOG value the undrilled part of the HH field 14.25 times the value of a well they have years of data for – and have choosen not to get a CPR done for HH that would provide an independant view of HH.
But nothing appears to worry ocelot.
Another consideration is that if PPP farm in then UKOG will only have half its present equity in non-HH-1 production (if successful). If PPP don't farm in UKOG will need to raise £4.6mm (+?) to shoot the 3D then drill HH-3.
ZYX,
The CLN holders already have £1.16mm to be conveted so the £500,000 due before 16 Feb is just more shares needing to be issued when requested.
Could UKOG issue shrodinger shares that do and don't exist until RNS'd while the SP is above the nominal value, or even below the current nominal value if that happened, but RNS'd after 16 February, re-priced and above the new nominal value.
Otherwise surely there is a provision in the contract as to what happens if UKOG can't issue shares.
Noticable they RNS'd the GM notice almost certainly after they knew that Pinarova was a dud and expected the SP would crash on that news, though the lack of shares to hand over to the CLN holders was an issue after the CLN RNS on 23 Jan as that soaked up the available shares.
As for the GM resolutions UKOG have voters with a gun to their head, though they could have been honest as to what appears to be the reason for the GM - no authority to issue more shares, little headroom above the nominal value with the possibility of going below and still a lot of loan note debt to clear.
Given the 8,438,550,000 shares they had authority to issue when the SP was around 0.07p in early May 2023 getting to 16 February 2024 having raised £3.75mm but still 'owing' shares for £1.66mm of that is not a great result, though probably more of a disaster for pi than UKOG.
Vernonya,
The consolidation is 10 to 1, but it's combining that with the nominal value dropping to a hundreth of the current nominal value that could enable the SP to drop around another 99% before hitting the new 'floor'.
UKOG's problems are the SP being close to the nominal value, all the authority to issue shares at the 2023 AGM is used up and there being (assuming the £500,000 tranche of loan was taken in November, but not mentioned in the January loan note RNS) about £1.16mm of loan notes out there, and another £500,000 tranche before 16 February.
But assuming everything is passed.
After the GM, with authority to issue 50% more shares, UKOG will be free to issue shares against loan notes even if the vwap had dropped below 0.01p before 16 Feb - the new price, 0.1p, above the old nominal value of0.01p, and vastly above the new revised nominal value of 0.0001p.
and thus the death spiral could continue.
If they could agree a deal with the CLN holders who after 16 February would, assuming UKOG haven't exceeded their authority to hand out shares before that, have £1.66mm of notes to convert.
Not sure what the vwap has been over the past couple of dayx but assuming it's about 0.000125 then that would mean over 13 billion shares, plus 4.5% taking it to just under 14 billion shares. Then there's all those warrants (+33%), though they're priced at +40% -- that's 4,5billion shares priced ar 0.0175p. - and of course there's already a lot of warrants issued at higher prices.
Then there's the option for £2 million more loan notes.
Confetti factory is in overdrive. Assuming the consolidation is approved those share numbers are divided by 10 - but the percentage of the company remains the same.
Ocelot,
Maybe if you didn't filter almost all non rampers you might realise that UKOG's projects are up s**t creek - currently without a paddle.
Possibly no wells drilled this year, maybe HH-2z converted and some seismic shot, and lots of tweets about Portland port.
Situation normal, UKOG stringing along pi for another year - faithfully repeated here.
Ocelot,
the only assets that have proven reserves are HH-1, Horndean (10%) and Avington (5%) when it restarts production.
in the last annual report these totalled £1.73mm. Plus about £2mm of 'decommissioning asset (?) and property, plant and equipment. Seems that's what the market recognises - mcap £3.7mm.
The rest is mostly expenditure chasing unicorns - but UKOG don't give details apart from future value of HH (£11.4mm) based on further drilling and hope - but possibly not based on the 43% they'll end up with after a PPP farm in if it happens and PPP drill HH-3 - oh, and it's successful. The remainder is presumably money spent in Turkey, Loxley and possibly some for BB and the Portland project.
Still, as long as ocelot believes.........