Member Info for Penguins

Ocelot,

The strange thing is usually you find an oil seep and then drill structures nearby to see if the oil is being trapped.

Here they've found an oil seep near where they drilled and missed a structure already drilled which teste some oil.

There's no doubt there's a working petroleum system in the area and supposing it stops just to the north east of Basur would be a strange conclusion.

Devoting 4 paragraphs in the RNS to it suggests it's a diversion from the complete F-up that they have got themselves into. Why they think only Resan is a problem with fractures when they were, in the previous RNS about Turkey, claiming Resan Basur was a single accumulation - and of course the Basur-1 water ingress which stopped the test.

Looking at the quality of the data on the new line to the North of Basur-1 identifying a migration path on a 2D line is going to be practically impossible unless it's coincident with the surface location of a fault - and would likely drive the interpretation to that conclusion.

I suspect it's a prelude to switching to drill Lead / Prospect A - has the advantage of less known about it - but the seep is considerably nearer Basur than Lead / Prospect A.

But it's obvious thepurpose of highlighting it, fooling those that only worry about OP, GP and repeating RNS and don't seem to care about the quality of the projects.

'Has anybody heard of any similar oil seeps in the area?'

Small point it's a subsurface accumulation that's derived from a seep it seems (it presumably wasn't evident on the surface - but there are a lot of seeps in Turkey (here's one article) and you might expect them in a thrust zone - but it isn't that significant if you were in an area with deep boreholes that proved there was a working system.

https://www.researchgate.net/profile/Adil-Ozdemir/publication/337261218_Oil_and_Gas_Seeps_in_Turkey_A_Review/links/5df258b94585159aa47914a0/Oil-and-Gas-Seeps-in-Turkey-A-Review.pdf

Ocelot I think you mean 'if' Loxley's commerciality is confirmed.

Any incoming partner won't just take UKOG's GIIP figures but do their own analysis of the mapping and look at the commerciality via risked NPV including their up front costs something UKOG raising cash through equity don't have to worry about - and it won't be with today's gas price - it will be with a price forcast into the future that may well take into account less reliance on gas at some point. But you never know - there might be another AIM plc looking for 'news' and blow the risk.

But why does it seems drilling Loxley has been kicked into the long grass - with UKOG 'bigging up' the gas storage project (just like ocelot) and moving forward on that rather than HH-2z and Loxley. As non-operator they don't have control over the Turkish adventure expenditure or timing although Basur is starting to look decidedly dodgy given the latest RNS.

Potentially - good word that, covers a load of unknowns.

what are the actual risks - UKOG put the chance of success at 60 to 70% - and judging by their previous utterancies about thir projects, which can hardly be called pessimistic (or even right), that will be an optimistic opinion of the COS.

They chose to claim there was a Loxley gas field (there certainly isn't if UKOG put a 30 to 40% chance of failure) and appear to have got Xodus to calculate volumetrics that they could have done themselves - was it just to add credibility to the numbers, which are now used as if the well's been drilled and the development's in progress

It also has the potential to be a dud.

As for funding - why not get the HH-2z injection going - probably the lowest cost work in their future plans - which some posters believe will increase production to 300bopd and obviously save on water disposal costs - surely that would make the SP go up so any raising would add less shares and maybe reduce the cash needed - or is UKOG not getting on with it suggesting those posters were wrong?

Also get a CPR done which will surely be so positive that it will also raise the SP - or perhaps not as UKOG don't seem to be doing that either for some reason.

'Analysis of further geological information obtained from legacy wells in the Resan area indicated that, whilst oil shows were encountered at similar levels to B-1, questions arose as to reservoir quality and the increased chance of fractures acting as conduits for underlying formation water ingress.'

Now forgive me for being cynical but there's no new well data around Resan and surely before committing to spend $5mm it would have been diligent to have a good look at legacy wells. I suppose it wouldn't have been convenient to have to ignore the OIP and potentially recoverable oil in the Resan structure when UKOG were blowing the 'transformational' trumpet?

Could this be the reason why the smaller Basur closure was targeted first because this isn't a recent discovery?

But now the question is what about the water ingress during the test of Basur-1, or are they saving that one up to explain a move to test Lead A?

I particularly like this bit as well:-

'Whilst B-3S still remains a solid and low geological risk option,'

Perhaps many read this and think why not drill it anyway as it's low risk. Here's a little secret - geological risk means the chance of finding oil, not necessarily a commercially exploitable amount - drilling to a ppoint adjacent to B-1 would almost certainly find oil - this seemed to be the aim of Arreton as well - targeting a location beside A-2 where there were oil shows but a failed test. I suspect UKOG would prefer to be drilling GB-3 next to GB-1 as well rather than as near as possible in the adjacent licence.

But of course 4 paragraphs at the beginning about an oil seep.........

Just looked in more detail at the new mapping.

In the December 2020 presentation for the (failed) licence applications there is a map showing the location of the 'vintage' seismic data. Whilst the scales are very different it is obvious none of these seismic lines cross the newly identified high along strike to the north west of Basur-1.

While UKOG have said they shot a strike line these are unreliable when shot parallel to faulting and can suffer from 'sideswipe' - really they need a dip line through the new high to confirm this mapping - drilling without will be huge risk - presumably breaking this gently to pi - 'Consideration is, therefore, being given by the JV to the acquisition of a small infill phase 2 seismic programme, designed to define a further Basur drilling location up-dip and to the northwest of B-1 and B-3'.

As regards the mapping the outline shown for Resan Basur in the same presentation (December 2020) is huge - but even the original outline shown in the 23/07/20 presentation is about 3 times the area of the closure currently mapped for Basur. As the Resan closure is now excluded - which was about twice the area of Basur it looks like the OIP and recoverable might be taking a big hit - if it's there at all.

What happens if the new high disappears? The stuff about the seep is irrelevant, throwing in something that sounds positive - they already know that there has been a working petroleum system nearby (E Sadak Field) and shows in nearby wells and the 500bbls from Basur-1 confirm it for Basur-Resan, and as ZYX and others point out wherever it is coming from in the subsurface is leaking and could be quite distant to the suface location. Will they chase the probably as risky 'lead A'?

Vistaman,

I believe the revenue figure includes Horndean - which, while a miserly ca 10bopd net to UKOG, becomes a significant contribution when HH-1 produces an average of about 60bopd.

TH2,

Have you looked at the seismic and map?

There's no huge structure and the structure closes to the south east of Basur-1 in contrast to the earlier reports that the structure extended towards Resan-6 - convenient now they are less keen on Resan.

The larger than Basur-1 closure to the north west along strike fo Basur-1 looks odd but UKOG have removed the location of all the seismic data except the lines shown to determine how much seismic defines it.

No mention of OIP based on the new map but presumably the 'old' map extended much further to the north east ( to where B-3 was targeted). Of course the odd looking bump (bit like the new Horse Hill map) might have plenty of unproved oil in it - I wonder if it would survive new seismic.

Don't know where to start.

Nothing happening for a while, nothing to say about the only producing operated asset except they might implement the water disposal through HH-2z ('if implemented' has returned) and the volume of oil produced from all levels up to end May suggesting that HH-1 continued to produce an average of about 60bopd from end December 2021 to end May 2022. No mention of water cut nor any projected production with water disposal. The only work ongoing seems to be compliance with HSE and EA regulations.

As for Turkey not going to change to drill the Resan-6 well because of possible water ingress via fractures and poor reservoir, while continuing to target Basur - though the test of Basur-1 was halted after 500bbls were produced because of water ingress according to reports made at the time.

It isn't entirely clear if they will shoot further seismic before targeting a new location (with a new site) for Basur-4 rather than continuing with B-3S.

Loxley no indication when site prep and drilling will take place.

Otherwise a load of stuff about the Portland gas storage which could be used for hydrogen or natural gas - but will entail significant expenditure over the next few years even before it can be confirmed to be feasible and economically viable.

Seems to be plenty of cash to pay salaries etc left at the end of March, and the lack of defined plans to do anything but studies and perhaps a bit of seismic might mean no fund raising for a while, we shall see.

Ocelot,

'6th biggest volume on the market'

with a share price of 0.115p a rather irrelevant 'fact'. But beaten by BOIL - nearly twice as many @0.08p.

By value would be a better measure - about £43,000 - or less than 400 AZN shares though only just over 300,000 AZN shares traded or over £35,000,000. Certainly would be behind all FTSE 100 shares and probably the mid tier companies, and probably a lot of AIM companies.

Coming 6th when the main contributory factor is abysmal SP is nothing to brag about.

TH2,

What are all these 'facts' about UKOG?

There are no reliable CPR'd figures for oil or gas either in the ground or recoverable been published for years - the last CPR was in 2018 before the extended ewt at HH, before Turkey was thought of and before the latest mapping for Loxley which Xodus calculated GIIP based on UKOG's mapping - though the report wasn't published.

The only facts I can see are monthly production figures for Horse Hill, which aren't even published by UKOG and months in the past - still waiting for March 2022 - and the results of previous drilling (HH, BB, GB and Basur / Resan) and selected test flow rates at HH that seem at odds with current production.

There is however a list of 'current' projects the results of which are unknown but facts like previous drilling and testing, or lack of, give an indication of likely outcome.

Soon we will get some factual accounts up to 31 March and a load of puff about future plans, just like every previous interim or final report - yet here we are with operated average 'stable' production of about 60bopd having spent tens of millions of pounds (80mm?).

Of course in the past posters have presumed any plan will be successfully executed and calculated 'values' and a SP that have so far never materialised.

The interim accounts are unlikely to show that UKOG has funds to complete any of the current projects at Loxley, HH and Turkey - UKOG stating as much in the AGM notice - let alone the plans for geothermal, gas storage and others that may have already been forgotten.

Ocelot,

I presume you expect anyone who expresses an opinion you deem negative, ie not repeating UKOG PR, would vote against the resolutions. I've certainly previously expressed the opinion that it would be pointless removing SS as, given the quality of projects, the only option is to exaggerate the positives and ignore the negatives - any new CEO would probably have to continue that policy. I also believe it's far more likely a supporter of SS and the company would bother to vote - I wonder what percentage of shares were voted?

As for the accounts why vote against - and the share issuance is a necessary evil as UKOG makes a loss - in any case possibly (probably) a placing will offer a chance to buy lower if the news releases don't come at a convenient time - or at the same price in an open offer should UKOG release news that generates a rise.

Perhaps ocelot believes the mass of positive posters on P&D days constitute the general ownership of UKOG shares - whilst they disappear as fast as they arrive.

That's not being positive about the projects but probability of spikes on RNS about progress towards further drilling in Turkey or Loxley or reconfiguring HH-2z. My expectations of the outcomes are in my posting history but (luckily) not everyone has the same opinion.

As for financial advice luckily I ignored this - though it was over the weekend and the SP was 0.24p on Friday close - the price dropped first thing Monday morning (5 July) when a placing at 0.18p was RNS'd:-

'RE: Buy 04 Jul 2021 12:22
Penguins,
Imho, as an investor in UKOG, I think you can begin to relax, the worst that can happen is that you make some money because the share goes up, (the 2nd worst, is that you make less money than you could have done because you didn't reinforce when the share was cheap).

Think we may be heading for something rather different than a spike, think a fundamental re-rating may be in the wind.'

The SP was 0.24p on Friday close.

Ocelot,

one of the truths of oil and gas exploration and production is that expenditure on wells and seismic has more chance of low grading a portfolio than high grading it as UKOG have demonstrated by drilling Broadford Bridge, HH-2z and Basur-3, and producing HH-1.

What the real conclusion from the testing both Portland and Kimmeridge at HH and BB can only be guessed but at the time the claims for production from HH-2z gradually diminished and became more and more vague as drilling approached.

UKOG have been either unlucky - which is a positive way of looking at it - or have failed to communicate to investors the risks that even posters on this board have been able to identify as major, rather than hardly mentioned - which is interesting when considering ocelot's claim that with a lowly SP the risk / reward is attractive when the risks are hardly mentioned and the rewards exaggerated. Destroying the SP by poor results then becomes a positive thing.

Ocelot has been promoting the 'low' SP as a benefit for a long time and probably for long before this post (pre 8 May 2018 posts are no longer available) when the SP was around 1.5p - 12 times today's SP:-

'RE: The OGA 08 May 2018 17:32
Remember the sp is only 1.5p ...
-------------------------------------------
Precisely, Scandic! It does help to make UKOG appear to be an interesting proposition, doesn't it?

Ocelot,

'Given the identity of the rival site, the probability of it being a "fake" account using that particular name is zero'

Really, there is a simon cawkwell account that is clearly the real, Simon Caukwell with over 2,800 posts and 59 followers

Then there is another account with an underscore (which ocelot claims is the 'real' Simon Caukwell) where on Friday two messages were put up one on UKOG and the other on ASOS. Zero followers, 11 posts, 2 on Friday, none previously about shorting or going long or anything more than the usual rubbish.

Stockraiser,

The explanation is that it wasn't a trade by either of the Simon cawkwells and it was just an attempt to put a positive spin on a large trade at virtually the lowest price of the week which would to most sane investors appear to be a sell.

By using a well known traders name (though by reputation a shorter) it added a level of authenticity that enabled ocelot to repeat it here - including the 1.5p in a year, but because someone else claimed it it isn't a ramp (in his opinion)

In a year's time there will probably be at least 20billion shares in issue (unless there's a consolidation) meaning the prediction is of a market cap of an even more unlikely £300,000,000.

Ocelot seems to have gone into overdrive based on a message on AD*FN.

Desperate isn't the word.

Seems Simon_cawkwell decided after 2 years to post a long on UKOG and a short on ASOS on Friday, and very few posts (9) prior the 2 on Friday - the two on Friday the first opening with 'Gentlemen'

The 'other' Simon cawkwell account has also been silent since 2020 but prior to that had many pages of messages, and littered with those starting 'Gentlemen'.

He was also involved in some controversy about GBO, where he was said to comment about GBO in his own name on AD*FN, and lo and behold there are a load of entries in his history about GBO.

The other Simon (the one claiming to buy 50,000,000 UKOG shares) nothing about GBO.

The lack of any attempt to check that the account really was Simon Cawkwell ranks with ocelot's ability to not question UKOG RNS.

To me it's clear it wasn't.

XYZ,

it was and maybe is still a thing in legacy contracts:

'Is Oil-Indexation Still Relevant for Pricing Natural Gas?'

Haven't looked at the article and others - too busy.

That was to illustrate where most of UK gas comes from, but in a dim and distant past I vaguely remember gas contracts having a link to oil price?

And if the only gas bought at spot is LNG why are consumers paying so much for the gas in the UK, non Qatari LNG is not a huge percent of total gas consumed?

The cost of production and transmission hasn't quadrupled so someone somewhere is price gouging and as so many domestic suppliers went bust it doesn't seem to be them, though some of course have upstream - and maybe others had better contrectural arrangements (Octopus).

But of academic interest to UKOG, though not necessarily their SH who use gas - must admit I'm on a relatively cheap fix 'til Sept 2023 as long as Octopus don't go bust!

There appear to be 2 simon cawkwells on that rival site

Simon_cawkwell
Simon cawkwell

Hmmm

Ocelot,

Interesting.

I didn't realise the market was so charitable.

This week the only trades I could find below 0.123p were 3 trades this afternoon totalling £30 and a single trade just under 3 million shares.

Yet an order to 'buy' at 0.125 for 50,000,000 shares was filled at 0.123.

I couldn't understand why the price collapsed this afternoon until that trade appeared. So the spread came down to accomodate that trade??? How does that work?

'Simon Cawkwell (born 1946), aka Evil Knievil is a famous spreadbetter who is highly successful at betting on companies whose share prices he believes are going to fall ('shorting').'

Ozzy,

Reasonable or sensible?

Surely posting about something that is irrelevant to UKOG today and has no bearing on the gas priceeven if UKOG are successful (so quite possibly never) is a desperate ramp about a project that even UKOG say has a 30 to 40% chance of failure.

UKOG appears to be joining in by quoting gross (not net to UKOG figures) of a biased mid to high case range in their letter to Jeremy Hunt.

Pointing these things out may not be to your liking but they are certainly reality - where's the reality in multiplying any gas price, especially one only relevant for a very short period, times UKOG's figures when nobody knows when or if UKOG will ever have sales gas, and the if they are successful it will be years away.

This is the sort of dreaming that had posters claiming UKOG would be worth billions based on a single untested well in 2015 (they were even more certain after the 2016 test) - this dreaming is based on a well that hasn't even been drilled.

Ocelot claims that 'the market is in denial of the potential implications of Loxley'

I suspect the market is well aware of the risks and would like to see something more concrete than figures for GIIP based on a map produced by UKOG with no detailed explanation of how that map was produced. The recoveries appear to be rounded 70% of the GIIP - not exactly a result of vigorous modelling of the 4 wells used (3 were dry) mentioned in UKOG's letter:-

'the estimated annual Loxley gas volumes, derived from data in four prior boreholes'

At least the three dry wells limit the size of their closure.

'the price of natural gas is not a source of worry for shareholders in UKOG (imho).'

only those who have to buy it..........

Wizard,

When will UKOG have even a positive cash flow without raising cash?

Oil wells, gas wells, geothermal wells, salt cavity wells, workovers, consultants, sites to prepare, purchase an American dream, put in solar panels on the roof of the cabins at HH - so many plans so little money.

UKOG are clearly saying to 'investors' at this years AGM it will be years before a they are likely to be self funding - and that depends on luck.

The worry is that they know how risky HH and Resan/Basur hence why they are lining up these other projects and authority for considerable share issuance.

Of course I'm likely wrong so perhaps you could enlighten us with when the future revenues and profits will kick in, you can't surely be making such a statement with no idea when you think it will happen. We can then see how sensible a prediction it is as the years roll by.

Ocelot,

I suspect the market isn't blinkered to the whole story which is far more complicated than an irrelevant price multiplied by a biased unproven recovery range.