Member Info for Penguins

Ocelot,

When you multiply a volume of gas calculated from a UKOG map by today's or even next year's gas price what you get is a fantasy number. Garbage in, garbage out.

Whilst the true downside is minus the cost of the Loxley well even the figures quoted to Jeremy Hunt were 'mid case' to 'high case'. Whilst any of the numbers are still unproven quoting a positively biased range is not an honest reflection of what might be there, nor mentioning the chance of success quoted in the planning appeal.

Wizard,

I'm sure every one would like to see UKOG self funded as they have suggested they would be by now, instead the threat of dilution to chase unicorns continues.

However in the AGM notice it's pretty clear they can't progress anything without a fund raise, even the latest shiny things:-

'it will require further funds in the near future for, amongst other things, its studies and planning application for the Portland Energy-Hub, its funding obligations under the agreed work programme for the Resan Licence, conversion of HH-2z into a water re-injector, to develop its other UK onshore assets including Loxley should planning consent be granted and for the pursuit and evaluation of further international petroleum and UK renewable opportunities.'

It's a pity that UKOG have grandiose plans but make a loss each year so have to keep passing round the hat even to pay the salaries, let alone fund the big ideas.

Ocelot,

When you multiply a volume of gas calculated from a UKOG map by today's or even next year's gas price what you get is a fantasy number. Garbage in, garbage out.

Even Mr 'optimism' Sanderson places a 30 to 40% risk the Loxley well won't be successful ie it isn't there at all.

'4.4 The probability of success quoted by the appellant is 60-70%, and 30-40% for the secondary target.' That's on page 8 of the report to the SoS / P25 of the PDF - link on UKOG home page.

Placing these figures in the public domain without passing them through a rigorous external scrutiny suggests that UKOG are aware that doing so may result in a critique of their mapped extent of closure (as in the 2018 CPR) and there are also issues with depth conversion and statics in the area not even looked into in 2018. In reality the value starts at minus the drill cost, and as we've seen at HH 'commercial' can mean generating a small profit only because the OP is currently high.

Of course putting those figures (which were previously RNS'd in 2020) out again gives the opportunity for posters to make the same sort of claims that have been made for Basur/Resan, and were made for Horse Hill and Broadford Bridge as regards a 'value' based on UKOG claims of recovery of OIP.

Wizard,

I'm not the one that's been surprised by the failures - I have repeatedly pointed out the risks and often been mocked for suggesting that UKOG's expectations are 'somewhat' optimistic.

However there are plenty of posters who believe too much, and question too little (or pretend to) and calculate a future 'value' that never materialises based on UKOG's figures - sound familiar.

Wizard,

I never doubted they would get permission to drill, eventually, but they still have to drill the well and find gas ......despite UKOG claiming there's a gas field called Loxley.

If you want further proof that there's no Loxley gas field until they drill and find if it's there (or not) look at the complete judgement of the SoS (link on UKOG home page) - UKOG stated there was 30 to 40% risk of the gas field not being there (ie 60 to 70% of it being there) which when you consider how optimistic previous 'expectations' have been isn't that great.

'4.4 The probability of success quoted by the appellant is 60-70%, and 30-40% for the secondary target.' That's on page 8 of the report to the SoS / P25 of the PDF.

Notice he didn't mention that in his letter to Jeremy.

As for the 'values' this was in the recent annual report:- 'The Directors have carried out an impairment review as at 30 September 2021. The Directors determined that the net present value of the HH-1 well was £3.63 million. The OP was just under $80 at the end of September 2021.

a NPV valuation doesn't just use the current OP but a forward price 'guess' - but even doubling the NPV is less than £8mm.

Legalease,

Your post got me interested as to where UK consumed gas comes from.

It appears the UK is being held to ransom by Norwegian and Southern North Sea producers and LNG imports with very little gas from elsewhere, the UK also exported gas in 2021, about 20% of domestic production.

The volume of gas imported in 2021 (mostly Norwegian) was aboout 65.5 billion Cubic metres or 2.313TCF - an average of over 6BCF per day (6337mmcf/d) - UKOG estimate production (not sure how many wells though) at Loxley of around 10mmcf/d = 0.16% of that figure. To produce 6337mmcf/d at 5mmcf/d per well (an 'average' shale gas well) would take over 1200 wells - and decline means that many more wells would be required to maintain production, and the wells will require refracking every now and then.

Of course we don't know if fracking the northern shales will work at all, let alone produce 5mmcf/d.

Wizard,

what's a forward looking CPR? Reserves guessed on the basis of UKOG RNS?

Ocelot,

Maybe if UKOG discovers gas at Loxley, proves what volume can be produced long term and is building the facilities needed that's the time to start thinking about what the revenue might be. Say 2024 earliest.

Until then constant repitition of the gas price today or any day in the future is futile and is basically spamming the board with the price of gas that is causing untold harm domestically, and unless you're advocating UKOG selling it cheap (which wouldn't be passed on to consumers) will have no impact on domestic gas prices.

Ocelot,

I'd compare 'the weight of negative opinions on this board is totally out of proportion by comparison to the opinions of shareholders' with the volume of trades on P&D days, often a far higher percent than those that voted. Those holding selling often to those hoping to also make a quick buck - including danpoe who's been saying it for years, should it ever 'boom'.

danpoe353
Posted in: UKOGPosts: 1,749
Price: 1.425 Strong Buy
RE: british bulls 14 Jun 2018 13:55
CCCCHHHHOOOOOOO..`ALL ABOARD THE UKOG TRAIN..."BBBBBBOOOOOOOOMMM"...ROCKET, HEADING FOR 2P+,....WWWWWOOOOOOOOSSSSHHHHHH.

Not sure that 94% of a billion shares cast is anything to be satisfied with.

A small percent of the shares in issue in early June. Despite that UKOG was holding a gun to the head of shareholders regarding the authority to issue shares still only a few could be bothered to vote for something that would dilute and drop the share price - 'Please note that if the Resolutions fail, the Company’s ability to raise further working capital may be impacted'

The day after the placing that followed in early July (at 0.18p) the SP was just above 0.18p and has been lower ap[art from brief spikes since. The trading day before the placing it closed at 0.24p a level never reached since.

Ocelot,

'When Vetta requested some of the regular contributors to the board provide a simple resume of their views of UKOG, I was the only one to respond.'

I can find neither a Vetta post requesting comments, nor a response from you (deleted?), but it does assume everyone else hasn't got a life and spends all day every day on this and other LSE boards looking for an intro to cut n paste UKOG PR.

But it's pretty clear what Vetta was hoping for in a response (see below) - and no doubt you provided it, though as you claim to have a lot of posters filtered not sure how you would know who responded.

This from Vetta on 3 June:-

'UKOG share will be hot on Monday. Planning Inspector's report will be favourable to UKOG on Tuesday. I think the share price at the end of next week will be nearer 0.2 than nearer 0.1375.'

I offer 'no opinion' because my long term opinion differs from what I might do on a daily or even hourly basis as long term it depends on my view of the 'assets' which is pretty clear, but short term wholly on the SP movement which has frequently defied the underlying fundamental value of those assets.

Legalease,

It may be a statement but it is an opinion as there is no well at Loxley so the map the statement is based on is an 'interpretation's and depth conversion. The well at Godley Bridge was indeed flow tested at a fairly miserly rate and was never developed because of the dry wells that followed and limited its size.

The only surprising thing is that UKOG have the brass neck after the various claims made about previous transformational, of national importance, projects that have failed spectacularly.

Ocelot,

Despite what UKOG put in their PR there is no Loxley Portland gas discovery.

There was a gas discovery at Godley Bridge which was never developed and the first discovery well was followed by 3 dry wells, presumably thesee are the four wells that define where Loxley isn't.

UKOG's interpretation has produced a map that theoretically has the resources quoted until there is a well at Loxley there is doubt as to their existence.

So far HH-2z proved their HH mapping was wrong and Basur-3 proved their mapping (assuming there was a subsurface map) wrong.

The area where Loxley is mapped has problems with depth conversion due to near surface static corrections issues, and Xodus recommended more date was needed in the 2018 CPR - the only CPR produced on UKOG's 'assets' with minimal reserves.

'And Competent Persons reports to back them all up'

There was no CPR for BB nor the Kimmeridge anywhere, the CPR had no reserves for HH - it was dated June 2018 before the long term ewt started - strange timing.

A few months later, RNS 18 October 2018:-

'Following submission of the planning application, Xodus' 2018 Portland Competent Persons Report will be updated to include recoverable reserves and net present values of cash flows associated with the envisaged Portland oil field development.'

Never happened - wonder why UKOG doesn't get CPR s don - each time they re-announced there will be one the excuse used is waiting for more data. However they will be well aware of what a CPR might say as they will have done the same sort of analysis either internally or using a consultancy. Difference is that a CPR has to be released.

As for - 'All I am doing is taking the figures SS provided' - when has that ever been a statement of fact rather than an over optimistic hope?

Ocelot,

I could have handed Xodus a map of a structure covering Godley Bridge - 1 and across UKOG's PEDL and asked them to calculate what volume of gas would be contained in it using parameters derived from nearby wells, and then calculate possible recoveries from the number of wells needed to drain it. Maybe even half a days work assuming the map was an output from Kingdom (which appears to be the interpretation software they use) and something UKOG could have done themselves from an internally generated GRV.

But then UKOG probably wanted to have a number 'independently' estimated.

As IGas map Godley Bridge as being entirely within their licence whilst UKOG appear to consider Loxley to be an eastwards extension of tnat discovery- which means all the statements about Loxley already being 'discovered' are in UKOG's opinion.

In the 2018 UKOG CPR Xodus were critical of UKOG's map at that time and was worried about cross fault seal, Alfold and the sparse data set. Igas also cited difficulty with static corrections in the area as a reason for the failure of GB-2 and 2z.

Perhaps ocelot could give us an idea of geologic and commercial risk and a NPV valuation rather than 'technically recoverable gas' times a gas price that applies today rather than when and if UKOG has sales gas.

Apart from being a poor analogy- technology invented (wheel) rather than being applied (industrial revolution) I suspect ocelot supports the introduction of workhouses and clearances.

I agree Loxley should be drilled (to end the hype) and despite all the whingeing about delays it has been approved. Now it's up to UKOG 'energy for Britain' to get on with it.

Troll,

Not sure everyone in the UK will agree that it's good to see oil at $120 per barrel. Even UKOG shareholders are not benefiting from the rise as UKOG will be making a loss regardless of whether HH-2z is converted or not. The economy will be trashed before oil reaches a level where HH production covers UKOG running costs and OPEX..

The only way UKOG covers it's costs and 'ambitious' projects (wells, consultants, buying equity) is by placings which dilutes shareholders for projects and activities that have so far failed to deliver at all, let alone to the level UKOG has 'expected' since the discovery at HH, which was promoted 7 years ago as 'discovery' of billions of barrel of oil.

Ocelot,

Unfortunately they're not so hasty to update with any bad news.

Took months to mention the application in Turkey had failed
Took months to mention that HH-2z was overwhelmed with water
Took months (even after OGA published figures) to mention HH-1 was producing significant water
Still have never mentioned water volumes or cut at HH
Still haven't mentioned detailed oil production figures
Were tardy mentioning that Basur-3 had stopped drilling because of poor hole condition.
Took months to mention that Basur-3 was targetted signiificantly outside closure
and don't get me started on HH testing flow rate and BB announcements.

PS: they only shot a very small part of the Basur / Resan seismic
and they are taking their time getting round to water disposal (having had a year to decide what to do) and Loxley activities might start this year.
and the Portland gas storage project looks like it's 4 years before they decide to proceed after spending millions they curently don't have.

Are you sure it was a buy last night.

If there's one today Zippy's 'I keep getting rejected to sell only 500000 but can buy the same no issue' might mean they've plenty to sell, perhaps someone is feeding the market with shares through the day.

Previously big trades at the end of the day have almost always not been particularly good news despite posters assurances they're buys.

We'll see - if there is one the end of day spread certainly won't be an indication of whether it's a buy or sell though the spread can be manipulated to make it equivacal anyway.

Non current - you mean non-existent assets previously referred to as intangible assets.

The money spent that has so far not proven any reserves but UKOG are still hoping. There was a massive writedown on HH 'intangible' assets when they conjured up their own reserves rather than getting a CPR done - I wonder why. Could it be they have to publish a CPR?

TH2 ,

All these 'assets' - could you list those proven.

My list has Horse Hill that UKOG's NPV (6.3) is less than $5mm.

They also have 10% of Horndean production ca 10bopd net to UKOG - reserves about 100,000bbls net so 'value' about 10% of HH (rounded up).

Being generous that might be £5.5mm total assets.

Everything else isn't proven. Remember all those predictions of millions of barrels of oil from the Portland at HH, transformational, nationally important, volumes from the Kimmeridge at HH and BB, transformational Turkey starting with Basur-3 (drilled,in the wrong place so how good was that map?).

Now we have 200,000 homes heated from Loxley gas, gas storage on the IOW and an American venture.

All very trendy now (except the possible US projecf) - but delivery when or actually 'if'.

The only reason I can see for these is the current projects aren't expected to deliver the transformational results promised and the results may be years away.

Anybody who followed your advice over the years would have a pretty poor retirement fund - and several years nearer needing it.