Member Info for Penguins

Ocelot,

Any of your posts about gas prices in the near, or medium turn. future don't concern UKOG - but you insist on keeping us informed, now coal (and John Redwood's inane coments)- what next seasoned logs?

I'd be surprised if anyone following UKOG doesn't follow, or even have shares, in ANGS and hadn't already seen the RNS about SFB first gas though.

From various sources:

The UK has LNG terminals but little storage so delivered gas is being exported to Europe where those countries that have storage are filling it up.

Germany's storage is 81% full and total storage is equivalent to about a fifth of annual consumption in 2021. UK gas storage is approx 1.5bn cu metres, Germany's 23.3bn cu metres.

Let's hope as consumers and shareholders in a company that produces zero gas it means those traders that have taken positions on high gas prices this winter hoping for gas shortages in Europe that have exacerbated the problem are not bailed out if the gas price falls.

Looks like someone didn't wait to buy!

ells_valexpert
Posted in: UKOG Posts: 183
Price: 0.088 No Opinion
Sanderson 05 Aug 2022 08:37
…Time to pull your finger out of your arse now that we have hit the placing price of 0.0875… get that news cycle at the ready otherwise you won’t be in a job in the next few months.

'ocelot posted'

'the boss of Shell has said', 'Tesla Inc. Chief Executive Officer Elon Musk said.' 'From the Daily Telegraph', "German Foreign Minister Annalena Baerbock warned', 'UKOG described the gas field as follows', 'Caroline Bain, chief commodities expert at Capital Economics', 'Tweet from Sir John Redwood', ' said Liz Truss.'

Occasional original opinion, but lots of posts of cut and paste opinions - at least one in this list from a raving looney (you choose) - and one from someone that might benefit most by prolonging the (western) energy crisis and not finding ways to ease it.

Not sure why ocelot keeps posting what various sources 'have said' about the energy crisis when a child could predict things could get tough (no sh*t Sherlock).

ocelot,

the problem is that UK Gov plans is to simply pay, whether by funding consumers or suppliera, huge amounts to traders and producers, and legitimising the prices, lengthening how long it might persist, in the UK encouraging traders and producers, and enabling suppliers to pay whatever they are asked.

Today and most of the summer the UK probably produces all or the majority of the electricity and gas domestically required yet we are being asked to pay 'global' prices.

As Truss would say - 'this is a disgrace!'

As has been pointed out renewables are currently much cheaper for electricity, as is nuclear - but it seems the government takes the risk and pays a fixed price on some of these supplies so is also profiting from the difference in those contracts.

Unless UKGov (and presumablyall European governments, except those that significantly own their oil and gas companies) wants to continue forever to encourage price gouging something will need to be done. Most likely price controls on domestic production will be brought in - and certainly should control the price of fracked production if the government is the main enabler of it - hedged and ICE contracts will need to be considered and legislation introduced if necessary to cancel them.

Otherwise is it sensible that the government should forever fund high prices and enable oil and gas companies to produce more at those prices.

It's already clear that domestic production of oil and gas does not shield consumers from global pricing in any way, but domestic production and self sufficiency in oil and gas may be unachievable anyway (to start with fracking may not work) and by the time the UK might be self sufficient the economy would be f***ed to put it politely - but a mix of controlled price domestic production and high price imports during winter months would help overall costs. Of course it might not help Angus but that's a small price to pay to protect the UK economy - it depends on your priorities.

But of course not likely with a Tory government.......... until it's too late.

Yep

'Two wells already exist at the Surrey site'

One produces too much water and is planned to be used as an injector, the other produces 35% water.

and 'but the company has put forward plans to build a further four, which it says would produce millions of tons of oil over 25 years'

but the company also said that the well producing too much water to use as an oil producer would produce 720 to 1080bopd before it was drilled. The one producing 35% water was going to produce 362bopd, now somewhere about 60bopd.

that they would dual complete HH-1 - they didn't

that they installed a bigger pump claiming (RNS / Interim Results 30/06/20):- 'Post period a higher capacity and energy efficient linear rod pump was installed on HH-1, leading to increased production from the Portland interval'. They must have forgotten that the OGA publishes monthly production figures and if there was an increase in production it didn't last long enough to show in monthly production figures.

Also 'post period' during June HH-1 started producing water - they forgot to mention that in the 30 June interim results.

also in the same interim results they claimed:- 'Post-period, the Company also plans a significant intervention in HH-1 specifically designed to further improve flow into the wellbore' - it didn't.

So can you sensibly believe anything UKOG said years ago - they seem to not understand the Portland or Kimmeridge reservoir getting 100% of predictions about HH production wrong since 2018. UKOG have never, since early 2020 when production began, mentioned in any communication what daily production of oil and water is from HH-1. We only know how dire it is from OGA, now NSTA, production figures published 3 months late.

Ocelot you seem to be admitting that you don't care whether what you post is true or not, or what it's about.

'PS: I should add: I assume 100% but do not know this.'

You assume wrong, and instead of trawling Bloomberg and ICE for bad news stories in about a minute of research (2018 CPR easily found on the UKOG web site) you could establish that in 2018 half the structure (5km) was in PEDL235 (the Godley Bridge licence) so 5km is in PEDL234 - and it would help to know that the licences are based on national grid 10km squares.

Slightly longer and you could find a map in the appeal documentation that still has about 5km of the structure in PEDL234 but it now stretches most of the way across PEDL235 (nearly 10km not in UKOG acreage).

There is no guarantee either map is 'right' because of depth conversion and statics issues that needed to be addressed haven't been. The extent of reprocessing the seismic date was to 'phase match' it - a simple no cost option that can be performed in the interpretation software.

It's quite possible that any prudent farminee will insist on some field work to ensure that as much as possible is done before forking out for site prep and drilling. We shall see

Though I'm surprised that after drilling Basur-3 to a target completely outside closure from what is probably an unusable (gold plated) drill site - demonstrated by seismic data acquired after drilling - that UKOG aren't being more thorough in pre-drill work for Loxley. They even suggested in a tweet that they were shooting new seismic over HH - a sensible option considering the previous mapping was proved wrong by HH-2z and the plan for HH-3 is to drill into a structural high in a data gap.

If ocelot thinks UKOG is going to be in any way a detectable contributor to the UK's energy security we really are up sh*t creek with no paddle and a hole in the Hull.

Nomlungu
Absolutely - but that money shouldn't be handed over to profiteering suppliers / producers of gas. But reducing reliance on oil and gas, regardless of believing in climate change or not, is surely a good thing as it is a finite resource to produce cheaply (the current pricing does not reflect the cost of production) and includes insulating homes as well as nuclear, solar and wind - and anything else that helps - tidal?. For a long time though gas and oil will be a critical part of the mix as sun and wind are unreliable and nuclear long term and also expensive.

We're partly where we are because the government became too negative to oil and gas but then failed to implement all the 'green' stuff that would have at least started to help with the reliance on oil and gas.

Maybe the question is - is there really a shortage - excluding Russian gas is it producers holding back and the difficulty of moving gas round the world. Are we getting Oz LPG because there's a lower price supplier in the Far East. Then there's reports of LPG carriers turned away because we can't store it and also the UK is exporting imported LPG gas to Europe.

Maybe more LPG carriers is the near term solution?

PS also agree about fast tracking large oil and gas developments - and I would include fracking the Bowland - if it works - though deliverability could be an issue even if successful - ie poor productivity per well and regular refracking needed to keep them producing economically (at sensible prices).

There's two different issues
1 UK energy security and
2 UK domestic prices.

Solving 1 is long term whatever someone says about fracking and feeding gas into the grid next year - not sure 'if successful' was mentioned. This also sensibly requires a concerted effort to reduce reliance and consumption. In the context of UK consumption Saltfleetby and Loxley (even if succesful) are irrelevant and in the case of Loxley unproven. - and specific to this board as a citizen I would hope prices have been sorted by the time (if successful) Loxley is producing or else the country will be bankrupt.

2 is an entirely different issue brought about by companies and countries competing for supplies globally because Russia has cut supplies to Europe. Unless the government/s can control producer prices and prevent profiteering by middlemen then giving money to end use suppliers (either directly or giving cash to consumers) to compete against each other to obtain gas will just perpetuate the problem - speculators buying up supplies effectively expecting (hoping?) consumers / government to pick up the tab far into the future. When there's true competition a free market works for consumers, at the moment it isn't working.

But there is no simple solution. Short term UKGov could effectively impose price controls by taxing profits on UK gas fields but that would be too easy to get around - dropping the price to an intermediary that then makes the profit, and there's 'hedges' to contend with. Maybe having a single entity (like Briitsh Gas pre privatisation) responsible for buying all gas for supplying to all UK consumers - only negotiating new contracts direct with producers would enable some control over time. Of course allowing the demise of multiple suppliers and thus their contracts might hasten how quickly it was the sole purchaser.

Just some thoughts.

The hedge continues until June 2025, not next year. Assuming the hedged volume from July and August has all been transferred to Q1 & Q2 next year the remaining Q3 hedge should be easy to exceed - though being prudent it may be ANGS won't elect non hedged flows until they've seen stable flow for some time. The monthly deliverable rises in October to 160.95mmscf which varies through the following 9 months per day between 5.19 and 5.75mmscf/d (depends on number of days in the month). For Q1 and Q2 it looks like the deliverables under the hedge will rise by about 1mmscf/d because of the rolled forward hedged volumes.

The extrapolated rate from short tests was 5mmscf/d from one well but stable flow wasn't achieved, and expected to 'normalise with time' (reduce?) - with the flow from a second well to be added the hedge in September should easily be met and when both well's stabilised flows are RNS'd then pi should know whether there can be significant non-hedged volumes to sell.

Even the hedge guarantees cash flow but obviously non-hedge sales can significantly improve that, assuming the 2 wells can cover the hedged volumes for some months (there will be decline, predicted in the hedged sales) the side track, assuming success, could provide those sales.

Interesting times.

Today has proved that the value of a gas field isn't going to be reflected in the SP until the gas has been shown to flow - even when it was previously produced and shut in because it could no longer be exported. Though the 5mmscf/d is an extrapolated daily rate from possibly short initial flows through the processing facility from one of the two production wells.

Until Loxley is drilled and there's gas, the Gas Water Contact is shown to be the same as Godley Bridge, the mmapping is proved correct, and it flows at commercial rates, and not just initially, the jury is out on UK's supposed '2nd biggest onshore gas field'.

Because unfortunately SS's opinion has been proved to be spectacularly over optimistic on every previous project that has had any result - though mostly failure.

BB - transformational, Turkey - transformational, HH all sorts of flow rates in production, none as low as 60bopd - and of course the Kimmeridge which could produce hundreds of thousands of barrels a day from across the Weald according to information supplied by UKOG to YE.

As for Loxley it's surprising that if he's so sure he can't convince a bank to loan him the cash to drill it rather than waiting for a farminee to appear and take some of that gas.

and if UKOG have 100% of the Loxley accumulation it would mean it doesn't extend into the adjacent Godley Bridge acreage - the figures that SS quoted to Jeremy Hunt ocelot likes to quote were the gross mean and high case figures not those net to UKOG and no mention of the low case.

Ells,

'BTW. the Portland storage project (cost a lot)'

in 4 years time UKOG decides to go ahead or not - then several years before some of the project is operational? But no doubt plenty of upbeat updates in the meantime.

There are also other (non-UKOG) gas storage projects, early stage Islandmagee in N Ireland and Stublach in Cheshire whichhas been operational since 2014 expanding.

UKOG can't (won't) pay for Loxley, sort out HH, get Turkey right, yet is happy to spend cash just preparing to do something that will require massive technical and organisational skills they don't appear to have - so lots of consultants.

There's a world of difference between finding something to do and executing it - hint hint - UKOG hasn't managed one successful project so far (despite spending on consultants) unless the Horse Hill well they didn't drill (the Angus team managed that drill) producing a sixth of what was predicted is considered a success.

UKOG has had many plans over the years, and multple transformational projects - I guess those that have seen them either not happen or fail are somewhat cynical about these grandiose plans.

Oops - autocorrect up to no good....

'but might have left that fantastic hanging there'

Should be 'but might have left that fantasy hanging there '

Meanwhile seems someone is working on beiing ocelot2 - failing there being any current good news repeat the often found to be hollow UKOG claims, often passed off by posters as facts about what will happen.

BTW. the Portland storage project (cost a lot) has nothing to do with the geothermal hub which might keep some nearby greenhouses warm - so not an update.

Sadly that report of good rates from Basur-1 also included a report that the test was stopped because of water production - though for some reason UKOG didn't mention that bit. A short distance to the south west of Basur-1 is Basur -2 that's described as a deeper water test, and on the latest map defines where the deepest closing contour goes. The closure around Basur-1 is small.

From the various RNS it looks like UKOG wanted to just drill to a location adjacent to Basur-1 which might have guaranteed a show and a good initial flow test but would not have proved up the hundreds of millions barrels of OIP - but might have left that fantastic hanging there - you can only make a guess as to why UKOG might have been focussed on geting a good initial test and not proving the size of prize they were claiming existed.

The seismic is no longer being considered, they are going ahead with it.

The previous seismic programme was meant to start in August 2021 according to UKOG (in August 2021) - it finally hit the ground near the end of 2021 , the new mapping (the first subsurface map UKOG have shown for the area) was put on twitter last month.

However it looks like it may have been decided to go ahead in June with the seismic as they had field personnel looking at unused shotholes from the previous work and 'found' the oil seep that presumably hadn't been noticed when some of the holes were drilled.

The new seismic is needed to firm up a location for Basur-4, but may of course wipe it out, one option then might be to return to drill close to Basur-1.

Here's one post from one of many posters about the likely direction of the SP nearly 4 weeks after the last placing at 0.18p, with others boasting of loading up, re rate coming etc. You'll note the mid price at that time was already 5.5% below that placing price and the opinion of this renowned poster was 'strong buy':-

'ocelot
Posts: 19,313
Price: 0.17
Strong Buy
RE: Turkish Delight 29 Jul '21
Raj34,
You've got to be in it to win it. I can remember UKOG more than quadrupling during the course of a single session.
Given that the downside risk appears to be strictly limited at the present time, the risk/reward ratio looks very attractive.'

Oops.

Within days UKOG announced the Basur-3 well was suspended - not admitting at that point the whilst the stuck drill meant a sidetrack was required the well target was in completely the wrong place.

Maybe the next announcement might be soon, and positive, let's hope so, but UKOG seem to be able to make posters who think they post reasonably, like ocelot, to be wrong footed (to be charitable).

Multiply whatever that is by £0.0008375 and in terms of value where does that place UKOG's performance today - few more than 100 AZN shares?

Includes just under 9 million shares traded at 0.083p - placing shares still being dumped?

'Winter 23 natural gas is at 679p
This is going to cost households and business an absolute fortune'

Maybe.

But that's just one contract. They're going to look mighty sorry if the market has dropped by then - it'll cost who ever bought atthat price, or do you think a year ago contracts for winter 2022 were going for those forward prices you so like to post here when yhey're irrelevant.

Woohoo,

Can't think why you're posting that here though unless you're mocking those who didn't fix their tariff?

UKOG sales gas next month= 0
Month after = 0
etc.

Unless you'd like post if/when UKOG will have sales gas

For years ocelot has been repeating UKOG PR. In that time, whilst there have been unjustified rises in the SP - that are to some extent predictable and expected - the fundamental value of the company (ie proved oil or gas assets) has risen from Horndean only (less than 100,000bbls 2P reserves) to just under £4mm for HH-1, plus Horndean - although that valuation was decided by the company - not independantly in a CPR. There is of course some 'property, plant, and equipment that will be amortized - and cash.

The SP is driven by hope that UKOG PR comes good, not proved assets.

Whilst UKOG assign values to intangible assets - the amount of money spentit depends on success to move all or part of it to tangible assets.

Meanwhile those that have challenged the copy and paste of UKOG PR, which unsurprisingly never mentions the downsides, with research that has often proved right.

'The board isn't just for the naysayers' - indeed, nor is it just for rampers. Ocelot has previously accused me of being a naysayer but so far in terms of the company's performance it's pretty obvious who's been right.

Consider this, which I shall keep on repeating, as to why ocelot and others accuse some posters of being naysayers etc:-

'Keeping to realistic expectations and awareness of risk is not being negative - posters seeing them as such suggests likely outcomes are more negative than they think.'

That was originally posted in August 2019 before HH-2 was drilled and the SP was over 1p.

I go with the start of the extract 'should we prove'.

So far UKOG proving up anything has been 'miss' not hit. With Loxley the risks are many and commerciality can have a vast range - even with $100 oil HH, which was declared 'commercial' by the company in October 2018, is currently barely commercial and UKOG are showing little sign of doing anything else soon to mitigate it.

That's despite all the testing of HH-1 accompanied by statements predicting HH-1 production of 362bopd and HH-2z producing 720 to 1080bopd - though of course the caveat was ignored by most 'Note: * There can be no absolute guarantee that forecast, targeted or calculated rates of production will be achieved'.

During the months of testing the production advice softened (I wonder why?) - to this in the last update 27/11/19 RNS before the admission of water ingress just before Xmas:- '......prime technical enabler for HH-2z to be capable of delivering significantly greater flow rates than those seen in the HH-1 vertical well.'

Beware early pronouncements of flows, volumes etc - UKOG have failed to update even HH volumetrics although a new map was produced after HH-2/2z proved the previous mapping wrong in 2019 - and Basur will also need to be updated following the failure of Basur-3 - maybe after the new data has been acquired, processed and incorporated in the interpretation.

As for commerciality it does depend on the forward gas price used and in the case of the Portland at HH apparently not understanding the reservoir, the structure or delivery mechanisms.