Member Info for Penguins

Nomlungu,

Timescale to sellng gas even if Loxley-1 is successful will be many years.

First drill the well - test it - need sustainable rates sufficient to support whatever is decided, cheapest quickest option with one well and low rates will be gas to wire, planning permission required for generators and grid connection - if Loxley-1 drilled 2021 maybe 2023, won't realise value of gas if gas price is high.

To support export of gas to grid or hydrogen reformation multiple successful wells required - producing from single well too risky vs cost of kit required for export / reformation.

Planning required for more wells, until more drilled and tested plant size required not known. Then planning required for compression, gas prep for grid and grid connection required for gas export - plant required for reformation - maybe 2024/5 or later.

R,

one day maybe when we're told something is happening at HH something will happen that actually improves the amount of oil produced.

You and the others have, on occasion, been just plain wrong analysing what you've seen - is that why we're now treated to the I've seen something, but I'm not saying what game, it avoids getting it wrong.

and no I'm not going down to the site - if UKOG are preparing for the HH-2z conversion maybe they've been given the nod permission is on it's way- but looking at posts and tweets it isn't unexpected.

or it could be to do with this (from Interim Results RNS June 2021):-

'We are carrying out modifications at the site to comply with The Control of Major Accident Hazards regulations (lower tier), as well as other regulations. Liaison continues with the Health and Safety Executive and the Environment Agency ("EA") to ensure the Horse Hill site satisfies these regulations.'

Nothing else is planned this year according to UKOG's Jan 2021 forward plan.

Ibug,

Thanks. Very interesting

E Sadak 13 was a failure and had to be sidetracked. E Sadak 12 was a failure (which we knew) but is going to be sidetracked. So despite the seismic shot in 2019 there are still issues with finding succesful targets. (E Sadak is the producing and geological lookalike to Basur / Resan). Previously ES-11 was also sidetracked - scout reports suggest ES-11S initial rate of less than 200bopd, dropping rapidly.

ES-13ST sidetracked well had an initial rate of 400bopd but no mention of current rate, previous wells on E Sadak have experienced rapid decline from that sort of level, halving in a few months.

The ES-8 well, post acidising was put on production at 45bopd.

Current E Sadak field production 768bopd, net 630bopd (these are from the report and don't match as 88% of 768 is 675bopd). Total production Jan 2014 to December 2020 was 1,293,112bbls - an overall average of just over 500bopd..

Basur-3 hadn't even reached the first target and will be sidetracked once the new seismic is shot and interpreted, expected to be completed in 2021 - we await UKOG announcing it has started.

Seems sidetracking to find a valid target is a theme in these lookalike fields, even after new seismic and multiple wells.

In the report they have an example seismic line from the licence, although no indication where it is from - explains a lot.

Surprised UKOG didn't give an update as to the results of E Sadak 13 as they were happy to quote an unidentified E Sadak well flowing initially (on test, not production?) at 1300bopd.

Perhaps an initial rate of 400bopd is too similar to Horse Hill, but then UKOG would only get half and it takes 2 attempts (and several weeks extra drilling) to get it.

Still no mention by UKOG that they and AME weren't awarded the acreage to the South of Resan / Basur.

TWB,

Excluding the well / project results is strange when asking about downside as it’s ignoring the most likely downside – even if the results are going to be a long way off - but I suppose it acknowledges most AIM wells are risky.

But the anticipation of the wells and other activities may be opportunities to make some money short term on permissions rather than results - this seems to be the basis for the current optimism.

Loxley, Arreton and Basur are appraisals of undeveloped discoveries so oil or gas shows are anticipated even if they have also been previously unsuccessfully appraised, although this suggests an increased risk of failure. The recent suspension of drilling of Basur-3 to await new seismic, presumably because the prognosis wasn’t right, illustrates that these ‘appraisals’ cannot be assumed to be low risk.

As for the HH-2z water injection there’s anticipation when approved that this will increase oil production from HH-1 (some predicting a significant increase) despite UKOG only suggesting a saving on water disposal costs, a boost of production needing more wells (if successful). The effectiveness of the injection / water disposal will only be known once they have run whatever injectivity tests are planned

There’s also the BoD share purchase previously expected first Friday in July and August. Maybe they will this Friday (RNS’d Monday?), but the scheme was seemingly conjured up to help head off a SH revolt over constant dilution and anyway the sums involved are insignificant although they’ve already saved themselves 2 months ‘investing’ – though it may well be the foundation of a P&D.

Re, Basur / Resan new seismic acquisition – this was planned but obviously wasn't expected to be needed before drilling Basur-3 (obviously). The sparse historic data had been reprocessed but whether Basur-3 was located on one of the lines over Basur isn’t known – but you’d think it ought to have been if the data was any good - as UKOG have bever shown a prognosis or subsurface map there's a suspicion that they were drilling 'blind'.

'of 58,260,945 shares each, at 0.1499 (08:41:05) and 0.15 (08:41:06).'

Looks a lot like a rollover doesn't it, I'm sure most knowledgeable investors will realise this, of course rampers will claim it's a massive vote of confidence rather than someone that doesn't want to have to cough up the difference between what they paid in a T20? and crystallize their loss.

Though it does give the MMs an opportunity to deceive with the SP the rollover goes through at.

ocelot,

UKOG still owe their owners an RNS admitting AME failed to get the SE Turkey licences applied for - and on Wednesday OGA figures for oil, gas and water production in May should be released - but UKOG have never RNS'd how much water is being produced from HH-1 despite clearly needing to convert HH-2z to a water disposal well, nor up to date oil production - continuing their MO of not RNSing bad news until they have to, and often belatedly.

Permission to do something is just a step on the way, and unfortunately what these steps lead to are far from guaranteed successes - nor historically once granted a guarantee that they will happen - but plenty of opportunity for traders to make a bit of cash encouraging others to buy - but they could produce some good fortune - could, though could be the good fortune will be for those trading the inevitable P&D rather than waiting for the results.

But no news yet about permission for HH-2z conversion, Loxley decision still a while off, and even longer for the actual well to be paid for and drilled, IOW still waiting for a committee date (next meeting 21/9, last document submitted by UKOG 21/7) - and probably 2023 for the well - and the Basur seismic was scheduled to start in August - still a chance for that to be announced tomorrow - perhaps UKOG will give an idea how much is being acquired and how long it will take - I see from the Oceanmec facebook page that the rig that was drilling Basur-3 is now elsewhere.

R,

'So you agree, HH3 will be on its way, at some point.'

......well UKOG have said they plan to drill it - but this is UKOG so plans and executing them.....

'at some point' - any idea, 2023?

II,

just because the UK needs oil and gas somehow doesn't affect the well results as UKOG has proved over the years.

UKOG had planned many wells by now but has actually managed to drill 2 wells (HH-1 was drilled by Angus/HHDL) both failures, one was an appraisal (now injector) well adjacent to HH-1 - how likely is it that further wells on HH will encounter the same water problem.

Is it a coincidence that the posters boasting about filtering are the ones most likely to post that they don't understand why the SP has fallen and come up ith the most ridiculous predictions of SP?

R,

£1.5mm a year - so a few years to fund another HH well - and all the other risky wells SS has ambitions to drill

What improvement the water disposal will allow depends on several factors, the main one being will it work in this complex reservoir that after months of ewt even in January this year they were still trying to understand it:-

'Technical work is ongoing to further characterise the Portland reservoir's delivery mechanisms and, in particular, the prevalence and role of the natural fracturing within the Portland section.'

......and SS only mentioned a saving in costs:-

'We look forward to the conversion of HH-2z into a water injector in the Spring and to the resultant increase in net revenue from the reduction in water handling costs'

Production 'boosting' would be following further wells:-

'Once the injector is in place, to boost production and net revenues, we plan two more production infill wells, one in each of the Portland and Kimmeridge oil pools'

.. and we know how successful the last production well drilled at HH was - it's the one being converted to the injector.

Wicked,

wasn't going to respond, but couldn't resist.

Funny to see you're supported by your new bestie, or as you described wizard on twitter:

'Only one PR bull*****er who could come up with that complete load of old b****cks and that's ***** *********. #ukog PR man and also Wizard on LSE.
Pump up that placing boys!
FOTH.'

Not sure what that (and numerous other posts) says about you two agreeing with each other (you'll have to see twitter to read what the asterisks are replacing). This is one of wizard's takes on you (16/4/21) in a reply to pboo: 'I think it is all the different characters & personalities arguing with themselves & no one knows what or if anything is true or not'

But this is priceless:-
'Penguins has never said a positive word about UKOG in 5 or 6 years'
and what has happened in the past 5 or 6 years to the projects UKOG has promoted and published resources etc. for (HH 3,500bopd, about 100bopd / BB failed, wrote off £9mm / Markwells Wood, relinquished / Holmwood, relinquished / Baxters Copse, relinquished / Turkey inaccurate mapping, drilling suspended) - though if you actually read what I've posted over the years you might find that even my supposed negative posting has often been too positive - just not as positive as posters, well, like Wizard or your earlier incarnation.

I've explained what might go wrong and why - you just made up a number that needs HH-1 to produce more oil than it did at the start of production when it produced no water, with imo as justification.

Think on this - the fractures near HH-1 are injecting water into the Portland.

Wizard,

if you read the CPR you would find that the water wasn't expected from fractures:-
'water break through – will it be edge or bottom water'
It was neither, it was from fractures and the map they used to calculate OIP has completely changed, HH-2z was planned to be updip from HH-1 - it ended up down dip. The CPR for HH is no longer valid, based on a series of false premises including that the whole Portland, not just the 'sweet spot', contributed to production.

Even the EA Geological Reservoir Parameters report dated 28/1/2021 does not mention the HH-1 water ingress, this is the only mention about water and HH-1:-

'During the HH-1 well tests in 2016 and 2018-19 no water has been produced from the Portland'

Yet the HH-2z well is identified as being used for injection - the EA report looks like a cobbled together mess of old reports without any acknowledgement of the post 2019 results, even HH-2z is just mentioned as 'the injector'

The 2018 presentation showing a 750m horizontal is still out of date - just like the last time (13 August) you tried to suggest that the horizontal was longer than planned.
22/10/2019:- ‘HH-2z aims to deliver a circa 3,200 ft horizontal section wholly within the Portland reservoir's most oil productive zone or sweet spot’.
3,200ft is 975metres.

Wicked

you posted:-

'400 barells of oil a day should be achievable once the water injection well is up and running I would have thought.'

Why - the well only managed 'over 300bopd at the start of production in March 2020 from the Portland with no water coming out. This dropped rapidly in April followed by May when, with the start of water production, this was down to an average of less than 200bopd. Unless there's full voidage replacement (and it works) decline will still be a feature of future production.

Interesting spelling of barells - where have I seen that before, but nevertheless even 400bopd is way below the volume of oil posters were expecting by 2021.

Ocelot,

'the economics of Loxley must be looking pretty exciting'

I suppose the economics of HH-2z looked pretty exciting before the well was drilled because UKOG, even with a nearby well, got the expectation of success and flow rates completely wrong - as far as they told the market anyway.

But you suppose that they have an accurate assessment of the results of what is, given the uncertainties of the mapping, a fifth exploration well to have reliable economics.

Continually posting as if Loxley is a guaranteed successful appraisal well doesn't change the risk that loxley won't be a commercial success.

The economics of anything look pretty good if you assume you're going to get the result you want rather than what is likely.

It's also strange that a poster who regularly posts about 50/100/200 dma - which is entirely looking back at the SP, is so dismissive of UKOG's past actions - which actually decide these statistics.

"The past is of interest to corporate archivists but of very little interest to investors"

TH2,

Most of the P&D, going by your posting at the time of the rise to 0.5p, was based on UKOG running 4 tankers out of Horse Hill (2 of which were waste anyway, but why let facts spoil a good story) the Loxley planning meeting hardly mentioned. When there were no more days of 4 tankers things calmed down and by the day of the meeting the SP had dropped well below 0.5p.

There was an expectation that news about HH-2z was about to be released in the interims due the day after the SCC meeting)- there was, but not as many expected.

As for 2nd largest onshore gas field - firstly it needs Loxley to be a discovery well that proves UKOGs depth map is right in this area where depth conversion is problematic (only Godley Bridge-1 finding gas, 3 other attempts failing) and second largest onshore is somewhat underwhelming as offshore it would probably be one of the smallest gas fields if not the smallest.

But when will it be drilled, late 2022? 2023? That's a long wait for all those speculative 'investors' piling in (and out).

Wizard,

you put:-

'Although I am not a geologist or have technical oil industry knowledge'

I suppose the opinion of someone who knows nothing about the subject they are commenting on is a sign of our times.

Just put IMO after an opinion and that makes it more plausible, rather than explaining why.

R.

Gingerclem's examples were from other reservoirs in very different situations, just because it works somewhere else does not mean it will work - his claimed increase was based on that well known proof 'IMO'.

SS / UKOG only claim a saving on water disposal costs, nothing about an increase in production (but I would be surprised if they weren't hoping it will be possible). Currently (Wizard) the 'replenishment is happening during the shut-in period, but UKOG give no details of the production / shut in split, about 50/50would be my guess. Upping the production time could easily mean a dramatic drop in reservoir pressure and consequent dramatic increase in water production whilst daily production drop (though being continuous may give an overall increase) is something UKOG will have tried - the injection into HH-2z may or may not help.

Put simply, whilst UKOG have published very little about the reservoir (perhaps because they even in January this year didn't have a final reservoir model) what we have been told suggests that injecting into the reservoir may not be as beneficial as some believe - fractured which may provide an exit or even path to HH-1, and injecting into the restricted sweet spot (higher poro-perm) layer also providing a route to HH-1 - which may or may not be separated by a (re-oriented from the previous interpretation) fault.

SRBS,

Actually look at the current trades, and do dummy buys / sells to determine what the real spread is - as you are well aware.

Not allowed to put current prices but I did just do a dummy buy and that spread really doesn't reflect the actual spread.

MM games?

Oops,

Arreton - probably 2023 - not 2022

Mirasol,

more importantly they're also on the hook for 50% of anything over $5mm - and the $5mm didn't include both seismic and drilling contingencies; coring; post well analyses; seismic processing and no doubt a recharge from AME of time written costs of interpretation.

With extra mob/demob and a redrill of the 12 1/4" hole (which presumably took a month of rig hire) how much more will be needed.

Capdevila,

'I have an opinion of possibly a significant re-rate'

Excellent - when, why? UKOG has a record of rises that fade away rather than rerates that hold. What's going to change that? anything likely to be announced in the near / medium term will only be about something that will happen later and may fail, or be insignificant - the DDSPP, or worse negative - not getting the applied for licences

eg
HH-2z - conversion probably later this year
Basur - probably next year
Loxley - next year maybe
Arreton - probably 2022

That's a much more honest thread title.

Danpoe

you seem to have missed the RNS where drilling is stopped until they figure out where to target the well. So Basur update 'soon' might be about the start of the seismic - which might show that the structure isn't anything like as expected and they need a new site / well.

Exploration,

I think you give too much credibility to the Xodus 'report' (UKOG's description 14/10/20:- 'Xodus Group Ltd's ("Xodus") June 2020 report'), it was probably a last throw of the dice farm out brochure - so perhaps a bit biased on the upside?

Ocelot,

Of course the principal investor / shareholder would be keen for success, but they were probably keener that AME didn't pay for Basur-3. If UKOG hadn't come along with sweaty palm desperation would the well have been drilled at all?

Scott,

What does this make you then:-

'Scottyk
Posted in: UKOG
Posts: 91
Price: 0.17
Strong Buy
Fully loaded 28 Jul 2021 09:59
Fully loaded myself .. can only see up from here now .. gla'

Presume 0.17p was a previous 'bottom' you could clearly see.

But it's unfair to single that post out of the thousands by other posters claiming more or less the same thing over the past nearly four years as the SP has drifted lower vs claims that either the last or the next RNS is/would be transformational.

Understanding the difference between UKOG news and good news has been a subtlety many have failed to grasp.

InvesterInvester,

Hoping for facts is not the same as having them.

Last fact was they abandoned drilling after stuck bit and not wanting to restart.

So what good news from UKOG next about Turkey?

That they didn't get the applied for blocks (which was known weeks ago but UKOG still haven't RNS'd it), or that they are starting to acquire the seismic they should have got before starting drilling Basur-3 to the wrong place?

Perhaps AME will offer UKOG another farm-in to drill another of their duff wells 100% as compensation for not getting the acreage for UKOG's transformational SE Turkey project.

As for Loxley UKOG say Autumn for decision which everyone expects to go UKOG's way, 'news' will be if it doesn't.

Here's a message from SS / UKOG

'UKOG is a Conventional Oil and Gas Company
What sets UKOG apart from a number of other companies exploring and operating in UK onshore oil and gas is our mandate to only recover oil and gas by conventional recovery methods and not by the employment of invasive hydraulic methods.'

https://ukogplc.com/page.php?pID=4

Although I don't think this is for altruistic reasons - it's because fracking naturally fractured reservoirs can have unintended consequences.

ZYX,

They target depleted fields rather than fields with high viscosity oil that becomes more mobile with heat - so more water present, not sure if the temperatures they quote are higher than 'normal' fireflood.

They also do say 'We use downhole specialty membranes that only allow hydrogen molecules to come through to the surface. These membranes are made of a palladium alloy and the only thing that can dissolve into the palladium is hydrogen.' so does 'dissolve' mean 'allow through' the membrane.

Although the talk is big (10% of world's energy (!) by 2040) is it still at the trial stage rather than a commercial operation?

...originally I was just pointing out it wasn't just a membrane producing H2 from natural gas as Tony implied:-

'Using a membrane down the gas well produces clean hydrogen leaving the carbon down the well creating clean green hydrogen from natural gas.'