Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
Loxley farm out. Heralded as a pre-planned farm out as if farmouts usually just happen unplanned, some posters assumed it could be rapidly consummated. With no takers early in 2023 a CPR was produced on hardly any data with a revised interpretation of the Alfold well supposedly proving it had a GWC similar to the GWC in Godley Bridge-1 - this was contrary to all previous analyses including the Final Well Report (FWR) and various licence applications (available on the UKOGL site).
Warning - for those of limited attention span stop reading here (if you haven't already)
Hung over today and had another look at the Loxley CPR whilst watching the snooker:-
The revised analysis of the Alfold well included a poroperm crossplot (fig 5:14) with ellipses meant to demonstrate that the reservoir properties above the GWC in GB-1 and Al-1 were preserved because of gas emplacement. A cursory look at the two crossplots clearly show that the green and red data points (coloured depending on depth) are reversed. In fact the opposite is endorsed by the core phi (porosity) plot in the Alfold well log petrophysical display (figure 5:17) - incorrectly identified as GB-2z - which shows core phi (porosity) down at around 10% above the supposed 2945ft TVDSS GWC, but vastly improved to 20%+ below 2945ft TVDSS the GWC in GB-1 and hoped for in Alfold – they haven’t plotted the core permeability in fig 5:17 but it is shown in figure 5:18 (furthest to the right column in the Al-1 panel), more difficult to see on this multi well display though clearly permeability (red * points) is far worse above 2945ft TVDSS than below.
Alfold rft data is mentioned, though only from below the GWC (and is water gradient), but not mentioned in the CPR were the four failed rft in the supposed good reservoir around 2925ftTVDSS (Top Portland Sst at 2919ftTVDSS) - the formation is described as tight in the FWR
Another supposed support to the GWC is the increase in resistivity above 2945ft TVDSS taken as indicative of gas above 2945ft TVDSS - but could this be a response to the tight formation RPS/UKOG appear to not realise exists?
SRBS,
To break even, let alone profit, don't the placees need to sell at 0.02p, and the MMs agree to buy them at 0.02p?
More likely this buying is being supplied by CLN shares where at least they can convert at today's vwap - and get 4.5% added to the loan. As I've pointed out there's not much headroom for UKOG to issue shares (less than a billion) but as they seem to be able to avoid norms by not revealing when and not adding the converted shares to the total until months laterit looks like they don't have a limit to shares they can issue despite the AGM limit.
Now that there's a floodof shares bought below 0.02p if there is a P&D on news all those that bought recently (after Xmas) are going to be struggling to get out before the dump, and there's no guarantee that the CLN holders might work hard to get the price lower if they are selling today.
Ridiculous situation - just to hope to get a grant for the Portland Port project.
Indeed with traders coming on to this board trying to profit by claims of successful projects ahead, but to make money can only do it by selling before the results, and then disappear - as long as they time it right - before the fateful well test results RNSs.
Even the continual supposedly good test results at HH served only to help the SP limp along and in production the reality of the detail missing from the UKOG RNS came home to roost.
Best get back to those other forums where you can get away, without challenge, with posting UKOG PR that so often turns out to be misleading at best.
3.75 billion more shares and quite possibly still billions of CLN shares that will need more authority to issue, though given they didn't admit that addition shares were converted until months later (converted in early August, mentioned in November) maybe they can wait until after the AGM to adjust the total shares in issue.
If the Portland Port project is so investable why don't they float that project off, see if it can be funded on its own merits rather than subsidised by investors in oil and gas, and give UKOG investors the choice to keep or sell their shares in what is effectively an utility.
They currently have authority to issue 8.43855 billion shares from the 2023 AGM.
Before today's raisee they've issued under this CLN 3.8221 billion shares, which left about 4.6 billion shares UKOG can issue until the next AGM - unless they call an EGM.
They still have about £800,000 of the CLN remaining to be conveerted, and if the June CLN RNS is to be believed they took another £500,000 in November, and there's another £500,000 in February.
Yet with today's placing have now issued 7.57 billion shares, leaving about a billion shares authority left.
What have they done with the money, and what does it say about the oil and gas properties that SS has bet the farm on getting a government subsidy for a gas storage project.
Presumably SS has pointed out the likelihood of a P&D on news, not success at Pinarova.
I haven't looked but did Zak Mir pump UkOG yesterday?
Hmmmm.
It's the delusion that anyone would need to pay for something the company does almost without fail - fail because they choose projects that are high risk and low reward - which is no surprise given they can't afford to offer a competitive work programme in licence applications or a farm in work programme to secure decent projects.
But then they fail to offer opinions other then highly unlikely outcomes (taken as facts by some). For instance they failed to give any information about production well flows and decline from the lookalike E Sadak field operated by AME in Turkey. The 2022 AME Annual Report gave total E Sadak field production from the producing wells (most from 13 drilled) of 250bopd, and using more rigorous analysis the E Sadak field reserves dropped from 25mmbbls to 0.5mmbbls - Resan licence recoverable resources went from 23 to 7.3mmbbls in the 2022 Annual Report.
So what are they hiding that they know about Pinarova - there were posters (you know the supposed swampies, nimby xr brigade) were saying the reasoning to drill Pinarova seemed to be it was cheap, not because it had a good chance of success when it was essentially a downdip appraisal of a well that produced water with an oil cut.
Loxley is another high risk 'appraisal' of the Godley Bridge-1 well that depends on a new, but flawed, interpretation of the Alfold well that has driven UKOG to impose a saddle between two seismic lines to facilitate structural closure matching the GWC in GB-1. The CPR reflects that the well needs to find the gas column and reservoir properties 'expected' for the resources quoted.
and still UKOG avoid converting HH-2z to a water disposal well - an easy £250,000 a year win, the amount UKOG claim would be saved. What risks are likely from injecting into a fractured reservoir........imagine.
Received the second tranche of the loan of £0.5mm - which according to the June RNS would be taken by 17 November?
If they have then there is £1.3mm loan remaining and there's another £500,000 due on or before February 16.
No clarity, a bit like the initial announcement where there was only a single 'award' of 'equity' shares - being in fact 'shares' - that, like Schrodinger's cat, are in circulation and also not in circulation until some time later when UKOG deign to let the rest of their shareholders, and market, know they have been issued and at what price. Seems now that unlike the previous CLN UKOG will continue hand over a billion shares or so and leave it weeks or months until announcing that there's more tranches of 'equity shares' so no one confuses them with 'shares' they've given but have no idea when, or for how much, they'll be converted for - or maybe they do - just don't want to tell the mug punters.
Perhaps they should have called them Schrodinger shares instead of equity shares.
We now have a reincarnation of JR/Ells/G-martin who thought that only posting once on the same board with 2 accounts meant that no rule was broken - it was.
But just looked back to June before the £3mm was raise announced and I have endless replies to JR/Ells/G-martin's claims UKOG wouldn't need to raise explaining a raise would be needed - and at the end of June, guess what......£3 million raise.
Here's an extract from thestart of my post on 26 June 2023:-
'Ells / JR90 / G-Martin,
you posted:-
'Company has ample funds to cover its share of the planned drilling and testing campaign'
But they didn't include any such statement in the interim report - and in the AGM notice they were quite clear:-
'Consequently, in order to deliver the Company’s stated strategy and growth objectives, it will require further funds for the above intended comprehensive work programmes' - which included mention of Pinarova , and many other funding needs. You keep suggesting, bizarrely, that they can't raise for anything else because UKOG said they had ample funds for Pinarova.'
and of course when the CLN was announced what was part of it for:-
'Turkey: further testing of Pinarova-1 and further drilling preparations/studies'
So even UKOG admittedfully funded for Pinarova before the raise was the truth. Not sure who's worse at predicting the need for more funding you or UKOG.
What's the expectation for authority to issue more shares at the next AGM now that HH is so 'profitable' and they're 'fully funded', that's if they can wait until then - 20 billion? or the equivalent if they were to consolidate?
Another just over a week has passed since I posted this on 3 January.
'Another RNS of no news - with a promise of news in the future, that will probably not be news of the testing results but arrival of the equipment on site - is the repetitive issuing of 'news' tweets and RNS a contractual obligation of the CLN?'
Seems I was wrong, not even news of equipment on site.
I thought I was joking about the repetitive issuing of tweets and RNS being a contractual obligation of the CLN - but considering the number of tweets (12) and RNS (4) so far in January..........and they haven't tweeted about their road and pad repair abilities yet this morning.
'NEW YEAR, NEW AMBITIONS: UKOG and UK Energy Storage are busy on multiple fronts:
Portland hydrogen storage' - surelybeing done by consultants and outside consultancies
'testing at Pinarova-1 in Turkey' - being operated by AME
'and exploring fresh opportunities at Horse Hill'...... - farming out both the 3D seismic and well to PPP who haven't consummated the deal
........'and at Loxley' - being farmed out to anybody, just not yet, but planning conditions still to address - presumably by the planning consultancy
'There’s a lot in store in 24! #renewableEnergy #hydrogenstorage #oil' - well probably not a lot of oil and zero renewable energy until the end of the decade......
So what didn't they do in 2023 (and 2022, and even possibly 2021 - HH-2z conversion anyone?)? that they're really really (fingers crossed) going to do in 2024?
Remember this:-
UKOG@UKOGlistedonAIM
Jul 5, 2022
JUMPING FOR JOY IN JUNE: The govt backs our Portland Port energy project … The govt backs our gas appraisal project at Loxley … PLUS encouraging oil seep in Turkey and new seismic plan at Horse Hill. And now for July!'
what happened.......
As for the CLN - this from RNS 4 June 2020 about paying off the previous CLN - with a placing:-
'The repayment eliminates the uncertainty attached to Loan Note conversion timings and pricing, something the Company feels was perceived to exert a negative influence on the Company's share price.'
Perceived??????
They currently have authority to issue 8.43855 billion shares from the 2023 AGM.
So far they've issued under this CLN 3.8221 billion shares, leaves about 4.6 billion shares UKOG can issue until the next AGM - unless they call an EGM.
Not only haven't they formally notified Companies House of the rise in confetti they also are late filing their confirmation statement as ibug pointed out - from Companes House:-
'Confirmation statement overdue
Next statement date 30 November 2023
due by 14 December 2023'
So when did the issue of these shares happen?
3 November 1,424,487,652 second tranche of equity shares (aren't shares 'equity' in a company?) the SP was about 0.03p and didn't drop to 0.026 until near the end of November, now they seem to have quickly converted a third tranche at a 0.022p vwap available before xmas. Seems this latest CLN avoids the nasty business of telling the market within 3 days of being handed the shares.
so 1.3 billion at 0.0504 =£655,200
1,424,487,652 at 0.026p = £372967
and 1,087,649,954 at 0.022p = £239,283
4.5% added to the loan = £57,035
Gives a total off th £2,000,000 of £1,210,415
However there was meant to be £500,000 'delivered before 17 November, and there's meant to be another £500,000 before 16 Feb.
It was headlined as a '£3 million funding facility'.
so not £800,000 left but in total by 17 February, if the original RNS announcement is to be believed, of £1,800,000 - fancy UKOG not mentioning the second and third tranche of the loan.
At 0.03p that would be another 6 billion shares (+4.5%)
and they will have got about 360 million warrants for the 0.022p shares at a price 0.0308p.
'We believe that successful project will be beneficial to local and national level energy, economic and net zero interests'
Believe - that's a resounding endorsement from the team that seemed to believe that every project UKOG has been involved in will be transformational often with very little justification, or even ignoring very obvious negative information.
Perhaps it's just that they don't say which direction the SP will be transformed.
Loxley isn't a low risk appraisal well, the previous appraisals of GB-1 (GB- 2 & 2Z) failed, and mostly based on the latest interpretation of the Alfold-1 well, near Loxley, that has identified a GWC in that well that is at odds with every previous interpretation that there was no gas column.
UKOGs speciality seems to be proving that a follow up to a poor well isn't worth it. They even managed to do it with their follow up to HH-1.
How UKOG manages to claim so much from so little evidence.
If, and it’s an enormous ‘if’, Loxley is a commercial find (if drilled?), given that one of main justifications of a GWC the same as Godley Bridge-1 is based on a wrong poroperm correlation between Alfold-1 and GB-1, the gas will just feed into the grid (at ‘up to’ 30mmscf/d from a single onshore well!) and whatever gas goes into the plant where natural gas is reformed into hydrogen it won’t be the gas from Loxley if it’s in Portland port – a location that makes them a very distant member of ‘The Solent Cluster’ (about 50 miles from Southampton).
But the hydrogen production and storage at Portland is supposedly going to be production of green hydrogen using power from a so far unplanned wind farm offshore Portland.
Strangely there is no mention of Portland port in any of the government reports as far as I could find – despite the many mentions that UKOG has made of government support – or as I would put it kind words.
As for Horse Hill perhaps the desperation of our returnee is showing with the resurrection of tweets of pictures of the Esso aviation(?) fuel pipeline. There is no way that HH will ever produce enough oil daily to require a pipeline for export - last October, the latest NSTA figures available, it needed about 3 oil tankers a fortnight - an average of 45 bopd .
Mullins,
It might be the most recent tweet but it's old news, UKOG tweeted about the report 5 Times on December 14, and exactly the same tweet as yesterday on 15 December.
Rather than a report about preparing for the next decade, which UKOG may have nothing to do with, it's a pity UKOG is less informative about about what's going on with projects of more immediate concern, a picture of the Pinarova site that looks anything but ready for the workover and nothing specific about the other O&G projects. Has UKOG given up on their supposed core business - just hoping someone will farm in to HH and Loxley to do the work, and AME operating in Turkey (though who's paying what isn't clear).
Not sure what the UKOG 'team' are doing other than managing contractors - and repeating tweets, almost all about hydrogen which if they're lucky they could be converting from natural gas in 2030 or so.
Auspicious date?
9 months ro the day to when UKOG RNS'd that the swab test of the Pinarova secondary objective in the Hoya (although it had never been mentioned as such previously) had failed and not recovered any oil despite there being oil shows whilst drilling - not to be confused with an oil smell whilst drilling. UKOG didn't bother to mention that the primary target had nothing in it - just had to deduce that, like so many UKOG failures, from the fact the Hoya amplitude anomaly was no longer mentionedand and that after reaching TD they needed a reason to continue to look for a mythical accumulation that was feeding the oil recovered from shotholes - that reason being maybe there if there was some oil in the Germik they could consider (September RNS) 'the acquisition of a small 3D seismic programme to identify a possible deeper oil pool, seepage/spill from which being the most likely primary source of both the seep and Pinarova oils.'
Not sure that a 'possible' deeper oil pool leaking or being full is the most likely primary source of the oils seen. To leak and be still leaking it would need to be recharged, perhaps by an even deeper accumulation, that's also leaking, spilling ........etc etc. if it's not migrating from the source rock.
Originally UKOG thought (June 2022) that the shothole oil:- 'provides evidence of an active light oil petroleum system in the central area of the licence'
ie that the shothole oil was direct from a source rock 'active light oil petroleum system' not spilling or leaking from another accumulation.
and surprisingly (June 2022) the seep's API gravity is close to the 43˚ API gravity of AME's nearby producing East Sadak oil field' yet despite sending a sample of E Sadak oil to be tested with the Pinarova and shothole oils they've not mentioned it - maybe it doesn't fit with the narrative (interpretation) of the deeper accumulation
Roll on the results of the test, not sure that UKOG seem that excited about it, nor sure why they are doing it except to fill the gap in anything happening, and it's still going to be a long time until either Loxley or HH-3 are likely to be drilled (or if) - though why hasn't UKOG converted HH-2z to an injector, according to UKOG a 'win' of £250,000 a year and probably a lot less costly than Pinarova drill and test to do - even in the highly unlikely event of SCC et al losing in the Supreme Court (the excuse for doing nothing) converting HH-2z to a water disposal well is not drilling for more oil and could have been retrospectively permitted.
The last statement before the extracts from the RNS perhaps explains.
'It seems a very opaque system with no public record of when YA/Riverfort choose the conversion price / date which seems unfair to 'normal' investors, even traders.'
Paragraph 1 & 2 - It wasn't clearly stated the 1.3 billion shares would be handed over to YA/Riverfort and enter the market with no proper notification. It was 4 months later the conversion and conversion price was revealed.
Paragraph 3 - even more equity shares were handed to YA/Riverfort with no explanation why the original1.3 billion was added to by over 1.42bilion shares
Paragraph 4 - The over 1.42 billion second tranche shares are being sold but there has been no notification of them being converted and at what price - and there's still probably over £1.5 million of conversions to come already plus another £0.5 million to come.
The question is why UKOG made the original June RNS so vague. UKOG could have clearly stated that the shares would be given to YA/Riverfort and when conversion happened wouldn't be revealed, and the conversion price wouldn't be revealed until some time later.
The formula for the number of equity shares could have been better explained - it was described as amounting to between 37% to 51% of the £2000000, or 1.3 billion. The basis for what was described in November as the first tranche of 1.3billion shares wasn't explained (though it was less than 37% of £2mllion because of the conversion price), and the second tranche of 2.42+billion shares seems arbitrary and if they had been converted at the SP on 3 November of about 0.03p (they won't have been) the equity shares would have totaled 54%, more than the 51%, so they must have been expecting the SP to drop.
Just like the project RNS - smoke and mirrors.
I think ninetails has described it very succinctly.
So UKOG gave YA / Riverfort 1,300,000,000 of equity shares which were converted when the vwap was 0.0504p after the 28 June RNS and probably sold them all at a higher price between the announcement and the conversion date, but this wasn't mentioned until 3 November. It was unclear from the RNS that these shares were just being handed over without any further announcement and there was no mention of a further handover of 1,424.4 87,652 shares - labelled as a second tranche of equity shares.
But UKOG shares in circulation wasn't updated until November - surely that isn't allowed. If the 1,300,000,000 were handed over in June when the CLN agreement was announced, or soon after, they should have updated the shares figure then. If these shares weren't handed over before they were sold then YA / Riverfort surely must have been shorting.
In November they handed over the second tranche of equity shares, another 1,424,487,652 shares to YA/Riverfort (and updated the shares in circulation) that trade data suggests they are or have been, selling - but when will UKOG let investors not given help like this know what price these shares have been converted at.
This affects how much loan remains to be converted. Assuming all the second tranche of equity shares are sold and they have 'converted' at 0.022p (just above the lowest vwap I calculated) then with the first tranche of equity shares they still have £1,575,000 of loan to convert (includes the 4.5% added to the loan on the sale proceeds of the equity shares and the £500,000 added in November but not the £500,000 to be added before February 16). Hopefully these will be converted with only a few days delay between conversion and RNS.
It seems a very opaque system with no public record of when YA/Riverfort choose the conversion price / date which seems unfair to 'normal' investors, even traders.
Excerpts from the 3 November RNS:-
'The Loan's first tranche of 1,300,000,000 has been converted by the Investors at an average price of 0.0504 pence per share. Investors can elect to convert the second tranche of 1,424,487,652 Equity Shares at the lower of the Variable Price* or the Fixed Price**.'
'Application has been made for the first and second tranches of the Equity Shares, numbering 2,724,487,652 ordinary shares in total, to be admitted to trading on AIM ("Admission"). Admission is expected to take place at 8.00 a.m. on or around 8 November 2023.'
Another RNS of no news - with a promise of news in the future, that will probably not be news of the testing results but arrival of the equipment on site - is the repetitive issuing of 'news' tweets and RNS a contractual obligation of the CLN?
In May they messed around until 23May allegedly not perforating the casing after announcing they were gong to test the Germik (oil smell formation) on 3 May. During that time they did release a couple of tweets (11/05 & 16/05) that suggested 'testing' was happening when later they said the no valid testing happened unless another test proved otherwise.
Let's hope once the PSI equipment arrives they quickly get on with perforating the casing and then we'll see how excellent the arrival of the equipment was and it puts an end to all the nonsense about an interval that had an oil smell which was so important it wasn't mentioned until after the well TD'd when all other possibilities of success were gone.
As for the oil sample, which was deceitfully 'urgently' revealed days later on twitter when the Hoya section, that at least had oil shows, was about to be swab tested - how does that and the shothole oil sample compare with the E Sadak sample that was also sent for testing? Did UKOG forget to ask as it seems UKOG was responsible for arranging the oil sample tests.
It's also interesting to note how the oil that returned to surface - the 'mobile light oil recovered from the mud pit - is no longer identified as happening when the casing was inserted - are they hoping everyone's forgotten what they've previously tweeted and thinks it was in the mud pit while drilling the Germik - which would be far better than it being displaced by the casing with no certainty where it came from.
https://twitter.com/UKOGlistedonAIM/status/1654065954463047680/photo/1
Will we see chartists once again issuing charts showing rockets and upward curves as has happened so many times before - but never the subsequent drop - forgetting that with UKOG what goes up has, so far, always come down.
A chart showing the peak of the spike - now that would be useful, if it was right.