Member Info for Penguins

Of course it's probably not best to consider that the Broadford Bridge well was a failure so it was all hype, mostly driven by over optimistic RNS, and SCDM buying rather than UKOG adding any value.

I suppose it could happen again......the hype I mean....adding value is much harder.

Now it seems that ocelot who has derided anyone quoting 'history' now claims that the realists were right because 'For the last 2 1/2 years, they have been proven right. But that is with the benefit of hindsight.'

That of course is complete BS - 2 1/2 years ago the true outcome of HH-2Z wasn't known, UKOG were still explaining the water ingress would be solved and on production in the near future. HH-1 production hadn't started, and Basur wasn't even a twinkle in SS's eye.

But the 2 1/2 years is 5 years since the all time highs filled almost daily with ocelot's brand of positivity / trying to discredit posters ocelot doesn't agree with. If the predictions that HH, the Kimmeridge and Basur might be rubbish were correct it was research - or maybe that's what ocelot means by hindsight - using previous well results and any other information about the projects to determine what might happen.

Yes UKOG might have been lucky and defy the likely outcomes - but so far they haven't.

Will Loxley prove up the 'positive' claims of UKOG of tens of billions of BCF recoverable. There are issues with mapping in the ares (unmentioned by UKOG though mentioned in UKOG's only CPR and in prevoous operators reports) and the current IGas CPR mapping shows a saddle separating Godley Bridge and Loxley - Loxley in an area to the east where previous mapping and the Alford well result suggest the 'high' is a 'nose' (ie doesn't close to the east).

Probably on announcement of a farmout (?), drilling, shows (maybe), tests (maybe) the SP will rise, but that isn't what research is about - any fool can predict these things (and the subsequent drop which ocelot doesn't predict, just a constant rise into the future) in fact most realists, say they trade on such foolishness - I do - it's understanding how likely success is rather than the day to day SP which is unpredictable vs long term outcomes, and what that success is likely to be vs the UKOG PR. Of course short term traders aren't really interested in ultimate success just a ramp and get out despite them often claiming a long term often ridiculous price target.

It's an odd way to look at the world that anyone that said the

1, the Kimmeridge wouldn't perform as well as UKOG claimed at BB

2. that UKOG were being selective about what HH-1 ewt results they were releasing hiding decline over very short periods for both Portland and Kimmeridge. They never mentioned again fracturing suspected during the 2016 flow tests

3. that there were risks associated with HH-2z because of fracturing and the limited 'good' reservoir section

4. that Basur might not be successful because the lookalike producing field had failed, poor and rapidly declining wells

was wrong and were in some way 'lucky'.

It's called research rather than repeating what UKOG said - that did have caveats but they were ignored - and was biased towards the upside but there were often 'giveaways'

1. For BB extended periods of silence - no details of what was expected.

2.the chopping and changing of what HH-1 flow rates were mentioned during the long term ewt and periods of shut in with initial rates then released

3.that the predicted levels or Portland production from HH-2z became vague and again periods of silence until the 23/12/19 RNS admitting problems (that they knew could be an issue in November).

4. That there was no mention of E Sadak production rates or wells - just an initial rate that was unrepresentative of what the wells were doing in production, and never showing a subsurface map.

It has been about 5 years since BB was ramped to high heaven and since then I suspect hardly a day has gone by when ocelot hasn't been 'positive' about the SP, and I and others have highlighted why the results might not be as good as UKOG claim for project after project, some now abandoned- not because UKOG were 'unlucky' but because UKOG were only RNSing very positive and unlikely outcomes.

BTW - ocelot quotes a SP of 0.8p as the low before BB drilling commenced. The SP had been gently dropping but was around 1.25p when UKOG RNS'd that a placing rumour was correct on 9 March 2017, the SP immediately dropped to about 1p and when the £6.5mm placing was announced on 19/03/17 at 0.8p the SP dropped to about that level. Predictably it then rose on the announcement of BB drill operations a few days later and then the constant 'positive' RNS and SCDM buying eventually lead to the 11p for a few seconds.

OK - it wasn't predictable it would rise to 11p (though anyone that thinks traders won't 'pile in' for a drill but get out before the results are known is a fool) - but the 'naysayers' were right that the Kimmeridge wouldn't live up to the 1688bopd which even UKOG put in RNS (which was the sum of the 2 best tests in 2016) and may not work at all.

But then ocelot wouldn't know because he filters posters who are realists.

'1/ the interest of the Bouygues family in 2017 and the share price rise from 0.80p to 11p at the brief peak;'

But they got a large number of shares due to their subsidiary Celtique being paid in shares for licences - and Celtique got extra from Magellan as compensation for an ongoing dispute.

2/ that it would take 2 1/2 years for the share price to return to 0.80p from the 11p peak;

Of course it wouldn't have gone so high if UKOG had been honest about what was likely - like many posters were. It takes time for 'investors to realise they've been had - and in those 2 1/2 years there was the carefully chosen ewt results and even the anticipation of the HH-2z drill results. Now we know it was all over hyped.

3/ that BB would prove non-commercial;

A surprise - really - only because UKOG exagerrated what was likely - installing a production completion that then had to be removed being just one example - there was also the FOTH gang making unsubstatiated claims. There were detractors - y'know those accused of being greenies etc. saying that the Kimmeridge wasn't a slam dunk.

4/ the extent of the water cut at HH-2z;

Which was preceeded by UKOG saying it would be 'routine' to stop it, as if it was an easy task. They also stopped drilling HH-2z horizontal becasue they hit fractures which wasn't revealed until the 2020 Annual Reports & Accounts on 16/4/2021 (nearly 18 months after it happened) and they waited until the June interims before admitting the water was 'overwhelming'. Could it have been flagged as a possibility - here's an extract from a post of mine while HH-2z was drilling.

Penguins
Posted in: UKOG
Posts: 2,574 Price: 1.025
No Opinion
RE: Down everyday recently 02 Oct 2019 19:25

'There could be issues - finding a water conduit, the well ending up in a less productive zone, or unexpected variation in the reservoir'

5/ the problem with the drill at Basur-3.

But UKOG never gave any details about the lookalike producing field which had failed wells, wells with low production and high decline rates.

Here's part of post of mine - there were many others about failed wells:-

'As for Turkey - not in Kurdistan but is adjacent to a 'geological lookalike' field with 8 wells producing a total of 410bopd last November, and 4 failed appraisal / development wells - something UKOG seem to not want to mention, preferring to mention OIP and reserves in fields not described as 'geological lookalikes' or unrepresentative initial flow rates.'

There's a reason why 'In the last few years, the negative surprises have outweighed the positive surprises' - UKOG only do the most positive view of what might happen - if UKOG were realistic what might have been expected at HH, BB and Basur - that many posters foresaw.

Ocelot perhaps should consider how much work Xodus did, beyond the calculation of gas in place and then using a guess for recoverable gas from UKOG's map, and of course what the report said beyond those figures - as those figures were all that UKOG RNS'd.

A CPR is a thorough document about the asset that they have to publish. UKOG also in June 2019 had a report done by RPS on the Kimmeridge - a year later they used the figure in that report for contingent resources of the Kimmeridge, but didn't publish, or even publicise it - it has only been ever mentioned in a footnote to a resources table.

I wonder why UKOG prefers 'reports' or 'studies' to CPRs about what were their main objectives.

Gosh, it's hard to keep up with the BS.

If anyone considers the front month gas price in the context of the Loxley farmout, that won't have sales gas for years and may not be successful, they shouldn't be negotiating.

But in the context of this board perhaps ocelot ought to unfilter to see what posters are saying in response to the selected examples of 'positivity' vs the obvious issues.

Boasting about the number of green line is akin to burying your head in the sand and just means you're less informed don't make any case for your assumptions and lkely to miss the juggernaut heading for you.

But I've just realised that the long lead Portland project is the gas storage in Portland, not the Portland at HH - too right it's long lead - 4 years before deciding to proceed is UKOG's estimate.

I do like lists.

'1/ "Drilling success at Basur is anticipated to provide UKOG with additional working capital in H1 2023". (placing RNS of 27/07/22).

Except that the 2 leads they're shooting the seismic over may disappear - they haven't shown the line that 'demonstrates' the Basur NW high - and Lead B on the new line looks like a forced rather than an obvious interpretation. Now they have a new map will they calculate OIP at Basur - the closure looks smaller than HH - and they've not published OIP based on the new map of HH - which has a smaller closure than the previous ca 30mmbbls OIP map - and never calculated on the basis the only recoverable oil seems to be in the sweet spot.

'The relatively modest placing of this Wednesday enables them to progress Basur.'

Maybe the placing represents all that anyone would agree to - possibly insisting no open offer, let alone a more modest one which would completely scupper it - who would buy shares at 0.094p if they already had shares and wanted to average down with shares at 0.0875p on offer - though maybe wait a while for demand to drop off? They also stated after Basur-3 was 'paused' that they had enough for seismic and a sidetrack - now not enough for a bit of seismic.

2/ re Loxley, " ... the Company will now implement a pre-planned farmout programme, whereby the Company's costs would be either fully or part carried by any farminee". (operational update RNS of 20/07/22)

Fantastic - 'pre-planned farmout programme' - or a 'farm out programme' that they warned might happen. Is Loxley a non-starter if they don't get a farminee - and if it's equity in the licence it's complicated by the abandonment or drilling of Broadford Bridge.

3/ Portland is one of the projects which "By their nature, ... have a longer lead time to cash generation than Basur".

Really? HH is there, discovered and in early 2021 (until they decided to mess around with the permission so withdrew the one they submitted in 2019) they were going to convert HH-2z in the spring. They've also had years to decide what to do - and then at the beginning of July mention a new seismic programme for HH - and then 3 weeks later ocelot posts this:-

4/ HH: imho, seems to have slipped down in their order of priorities.

What's happened - could they only raise a 'modest' amount so future 'actual' work - rather than messing around with geothermal, gas storage, farm-outs, trips to Turkey etc that may in a lot of posters opinions advance getting more oil out of HH and sooner - can't be progressed?

We'll see if the Basur-'x' well is drilled completed, tested and provd to be commercial in H1 2023 - of course if everything goes UKOG's way it could happen - but then when there's risk UKOG don't seem to want to mention until it's happened................

'you will see that I have absolutely no need to acknowledge downside risks'

Being positive for years, silver lining no clouds posting, with no acknowledgement of the downside risks, whilst the SP has dropped from any previous day before the latest placing you care to mention to today's SP - well at least we now know that ocelot accepts it isn't 'balanced' posting - just doesn't acknowledge it's wrong.

.........that the first assumption about a poster that researches in depth about a company (the same goes for ANGS at the moment) rather than scratching around for any, often irrelevant, general but possibly positive news, is that they must be working for DoD or a 'greenie', anti oil, or worse - rather than pro-investors in a company that so often seems to be anti-investors. Investors who surely should want to see relevant information the company chooses not to mention.

Last day for 'now for July!' to have us 'Jumping for joy' as apparently investors were in June.

The oil was down as well, if anything you would hope the water cut would drop much more with less production but it was about 35.2% in April vs about 35.8% in March. Gas Production was down quite a lot per day though.

The water will be sourced from a deeper level via fracturing, not from within the Portland, which means it's likely to be at a higher pressure than the Portland.

'So many buys why are red!'

Strange isn't it, it's as if there's somone with lots and lots of shares they're desperate to get rid of.

Well have a look at yesterday's RNS. UKOG sold a whole load of shares at 0.0875p - nearly 1.5 billion.

Despite ocelot's hopes that every timeUKOG do this whoever has bought them keeps hold of them what happens is they dump them into the market - although you should note that they aren't meant to be in their grubby hands until Monday.

So they go to the market makers and agree to supply as many shares as they can sell as long as they make a profit. You'll note as the buying appetite dries up at a certain level that price drops. So far I'd expect most reported trades since 14:00 yesterday are buys - don't suppose the market makers want any more shares to offload.

You'll probably see at the end of the day a large trade that maybe if they get the spread right looks like a buy as well - don't be fooled..........

I had a look at the 2/8/21 RNS and this statement stuck out - mainly because it was a line on its own.

'Sufficient funds are available to deliver the sidetrack and seismic'

So in fact the cash isn't for the work in Turkey - they are replacing cash UKOG must have spent on other things that won't in the short term generate any cashflow - which is now the priority - though even that is dependant on the seismic coming up trumps and raising more cash.

Perhaps someone at UKOG is reading this board for ideas- I commented yesterday that the interims weren't linked on the Financial Statements page. Today there it is! A Coincidence surely?

'and they still haven't linked the interims in the financial statements, and what about an open offer on the same terms?'

'Personally, I assume it is a matter of risk/reward, that SS judges the potential reward to be greater in Basur than in HH'

More like UKOG has no option as AME make the calls in Turkey and they can't raise enough to do both.

As for risk reward - both appear risky and now they've shown a map of Basur it's highly probable the reward has reduced considerably - the Basur closure looks a lot smaller than Horse Hill. That doing anything at HH has a worse riski/reward than searching for a target in Turkey with new seismic is a strange assertion.

But the tweet about new seismic at HH and the claim in the RNS, effectively, suggesting that there's no short term way to improve HH production - in contrast to previous claims about repurposing HH-2z - is worrying.

'By their nature, UKOG's other projects have a longer lead time to cash generation than Basur.'

Ocelot,

More BS. Posting without explanation of exactly why it would help with 'its bargaining position'.

I suppose you think that a farminee wouldn't have a look at UKOG's RNS and notice that the £1.25mm might just already be committed with talk of needing more cash in Q4 to pay for a well in Turkey (if the leads mature into prospects) - and it almost seems UKOG won't drill without a farm out of some sort. Might even worry them, assuming they don't want to cover the whole cost, that UKOG could be a 'drag' on progress having to raise to pay their share.

Seems a bit desperate placing now at 0.0875p for a 'modest' amount - could they not wait for the farm out happening now being consummated that's going to boost the SP because it will be such a good thing. Maybe a little P&D for the placees to dump in.

Looks like the only poster these days ocelot will converse with is Adrian - oops - credibility sinks to a new low.

ocelot,

'BBC home page lead article on gas prices'

Give it a rest - UKOG doesn't have any sales gas, and may never have any sales gas - and if it does it's years away - I'd keep quiet about it on ANGS where these gas prices could be a disaster if production doesn't cover the hedge, but then the rampers there want readers of that board to think ANGS will definitely be selling gas at market prices.

'The placing was done very discreetly.'

phew, discretion - fantastic - speculation it's in a few hands (sticky would be better) and a modest amout - maybe not that much cash but nearly one and a half billion shares, enough for everyone in the UK to get 20, any comment on the negative impact - or is the SP only mentionable when it goes up? Unfortunately seismic (eg phase 1) can destroy poorly defined prospects.

Luckily ocelot sees a silver lining everywhere, even in bizarre comments from the glorious leader - did SS expect the month would be stuffed with good news:-

'ocelot
Posted in: UKOG Posts: 18,976
Price: 0.09 No Opinion
RE: Twitter 06 Jul 2022 07:48
"And now for July!".

That sounds positive and enthusiastic.'

Note the SP was pre-opening!

HH1AN2,

I expected the 'before mid Q4' placing warning would be a while yet as they aren't doing anything, the only actual 'external' paid for work planned was the seismic programme - maybe AME is cash calling the whole cost before it starts to ensure UKOG pay up?

'Horeshill is the place to sort out first, water injection, seismic new well'

so why hasn't it happened?

Could it be it doesn't make economic sense? The cost of a new well could be more than HH-1 production is worth in terms of unrisked NPV as calculated by UKOG (less than £4mm), and HH-2z shows there's considerable risk.

As for water injection is there a risk it could cause a problem - unlikely to be injecting into a water leg but the same oil filled relatively thin better poroperm interval with fractures that HH-1 produces from - it could go horribly wrong.

If only UKOG would publish what they really think about both Portland and Kimmeridge - since Portland production began and abandoning production in the Kimmeridge there's been nothing about Portland production - only oblique reference to the water production and occasional, often non-commital, mentions of future plans for the Portland and Kimmeridge.

End of March 2022 £2.235mm

Since then what significant work have they done - spaffed presumably a load of cash on the Portland storage project - nice diagram, produced some oil and water and changed the downhole pump at Horse Hill, maybe paid for the 'phase 1' seismic processing (where the whole seismic programme was costed at $1.25mm) - and nearly forgot, salaries.

They now issue 1,428,571,428 shares - about 9% of the number prior to the placing - to raise £1.25mm (possibly less a 10% fee) to fund a phase 2 which probably isn't the balance of the whole originally planned Basur seismic survey - hopefully paying only 50%.

They'll need more cash for Basur-4, which they are hoping will be successful to generate some cashflow - but they still keep quiet about what success might mean (only 50% of, if they're lucky, a similar well to HH-1) despite AME being operator for the E Sadak field - described as a geological and producing lookalike to Basur. There is also the issue that the cash generated in Turkey goes to fund the next well there - AME might insist on it as it was an agreed licence programme of multiple wells (5?).

There's no mention of the tweeted 'new seismic plan at Horse Hill' where the tweet was headed - 'JUMPING FOR JOY IN JUNE', mostly about a presumed but not stated backing from the government of Loxley (now waiting for a farm out) and the gas storage project (now spaffing cash) and strangely ended 'And now for July!' which some posters took as a positive rather than a threat.

and they still haven't linked the interims in the financial statements, and what about an open offer on the same terms?

Ocelot,

So UKOG is starting a pre-planned farm out programme now.

Seems to mean they've opened a data room (virtual or physical). That's the now bit - except now companies have to visit it and assess whether they're interested and at what price. Maybe they like it but want more seismic, maybe they won't pay a premium, maybe they won't want to take on the responsibility for abandoning and restoring the BB site or even the risk of sharing the cost of drilling another well there? Summer isn't necessarily a good time for a data room with staff (and management) holidaying. Unless they do have a pre-agreed (rather than pre-planned programme) farmout, which might preclude getting a competitive bid, it could drag on for months.

When UKOG bought the licence in 2016 IGas would surely have also had a look and either decided no, or the price of (UKOG paid £3.5mm to include an IOW licence)- about half the cost of a well) was too high.

The gas price may be much higher today but in the time scale of developing a gas field the gas price may do anything and high prices often lead to a bust as consumers adjust usage of a product they can't afford. The UK produces a fair percentage of it's own gas - how long will any government allow unpopular price gouging to continue by domestic producers with a general election starting to loom in 2024?

Of course the flanks of a steeply folded anticline are more likely to be the mountains - with the valleys inbetween coincident with the subsurface high - as long as the anticline isn't 'leaning'.

Slide 12 of the Turkey Resan Licence Overview July 2020 illustrates this - it's because the tight fold causes fractures that at the surface weakens resistance to erosion. In fact that diagram almost perfectly illustrates what went wrong. firstly the oil pool at Basur-1 is much smaller than the ca300metres they are implying in this diagram (wonder why?)- UKOG now show B-2 nearby B-1 and map the top reservoir only about 40 metres deeper at B-2 which tested water (B-1 quite quickly produced water stopping the test after 6 hours). So drilling a vertical well from the surface bump to the north of B-3 would miss the small B-1 accumulation.

Of course UKOG just wanted to drill to be beside B-1 to gat an oil show and short test - which according to the latest mapping would have proved very little OIP - but who cares eh?

There's a better diagram at the end of the 'UKOG Turkey New Licence Application TURKEY December 2020 - showing much the same thing - of course there are faults involved that makes the subsurface (as UKOG mentioned once Basur-3 was drilling) much more complex than these diagrams illustrate.

Interim - 30/6/21:- 'Given the complex nature of the subsurface there are, of course, no absolute guarantees of success, but we remain confident that Basur-3 will move our understanding of the accumulation in the right direction'

Certainly in hindsight an ominous warning, and posters wonder why I question what's in RNS - and probably why ocelot doesn't want to read or respond to my posts

Ocelot,

It just means nothing has happened for a long time, apart from a couple of pump and dumps on no news that have dropped as fast as they rose, so the SP has been low for a long time while gas prices have rocketed and the OP been high and ocelot has only posted (apparently) positive news.

Not sure how accurate that makes ocelot's posting, or perhaps it's UKOG's RNS that you copy and paste?

Ibug,

Didn't realise it was a competition, thought it was just showing what a great car park the B-3 site would be for a lookout, but that's certainly a pretty good surface expression of a bump over there - though as B-3 has shown the subsurface bump is not necessarily beneath the mountain.

The change since UKOG's 20 April RNS from a single 60 sqkm structure over Basur and Resan based on athe new strike line to a couple of possible bumps, one not even on the Basur anticline, shows how misleading UKOG RNS can be.

More likely employed a forked tongue - just requires a brass neck to deploy.