Member Info for Penguins

Ibug,

as it's scanned try using an OCR app - it needs to be fairly good quality - if you're suspicious of downloading free software / trials there are some online ones. - then you can run it through translation.

Ozzy,

as almost all you do is criticise other posters it's hardly surprising you don't make false claims about UKOG as you don't seem to make any claims about UKOG - but with 253 posts remining in the last 30 days I haven't read them all..

But where do I criticise what Ocelot posted? Like Ocelot I'm commenting on the operating margin and payback time, I also think Ocelot is quite capable of responding to my post, though the constant repetition of the latest OP or 'forecast' (or guess as it's known) and/or a selected bit of UKOG RNS is somewhat boring (and that is a criiticism) - but you seem to latch on to certain posters who you either defend or criticise.

As for Turkey when UKOG publish some meaningful data about the project rather than the same sort of stuff they used to say about the Kimmeridge then I can use that for my 'calculations'.

until the 'the bit has turned' the amount of information from UKOG is minimal so anyone really interested has to look elsewhere - and that information doesn't seem to be as positive as you might like obviously.

It will be interesting to compare the actual oil production figures for November, calculated as an average over a 2 month period (as October actual is now known) from the UKOG data, but not itemised by UKOG for November.

This will also enable a calculation of bopd during December.

Perhaps more important will be what the water production was as UKOG didn't supply that information for October as they were producing fluids used during the workover as well.

Will it be similar to the water cut prior to the intervention (about 25%) or did the intervention plus intermittent production reduce it?

Of course UKOG could release this information on a more timely basis - and probably would if it was better news than it appears to be - a recurring theme with UKOG.

Ocelot,

E Sadak - 1, the first well on the nearby analogue field (operated by AME) to Basur / Resan, which was discovered and put into production so rapidly in 2014 was producing around 30bopd in 2015 according to AME reports on field production to the scout group

It's also pretty clear that at E Sadak the wells decline fairly rapidly and don't produce highish volumes for long so many may be producing low volumes of oil, no longer producing, or have never been put on production, like E Sadak-12.

If UKOG would publish more information about this analogue field then the risks could be better understood as well as the rewards - there's been plenty of opportunity with several RNS and presentations since July about Turkey - they prefer to mention fields in different reservoirs or fields in the centre of the play fairway not even in Turkey.

But a poster here found some scout reports which give more detailed information about E Sadak production than an 'up to' initial oil flow rate (and we know how deceptive they can be) and 2P reserves mentioned by UKOG, which if all AME production in 2020 was from E Sadak (it wasn't) would take about 90 years to produce.

If a well is p&a'd the payback time is never - or more importantly there won't be cash generated to pay for the next well. Perhaps more pressing is if successful, how successful, and how much oil will be needed to be produced to pay for the planned seismic and second well this Summer.

Let the partnership find oil and produce it for longer than 6 hours at Basur before worrying about operating margins and payback time.

The figure in the application and letter doesn't match that given previously, though the difference is unimportant - in the well results the figure was 1587 bopd plus 6.6% water which is actually 1699bbls per day - 2 October 2018 RNS 'the well flowing naturally at 1,587 bopd equivalent, not including 6.6% water.'

They also mention the possibility (likelihood?) in the application of isolating the water which was thought to be from a high pressure fractured water zone (in the 2 October 2018 RNS).

It will be interesting to see another test of the Kimmeridge, let's hope Angus is less evasive about the results than UKOG.

As for Turkey a few predictions have been given for the drilling (late 2020, early 2021) the last one was H1 2021:- 'the Company will now focus its efforts in the first half of 2021 towards the design and delivery of the Basur-3 appraisal well.', which is strange as surely it had a design when it was planned for late 2020.

The well must be commenced before 27 June 2021:- 'The first commitment well, currently planned to appraise and flow test the Basur oil discovery, must commence drilling before 27 June 2021.'

Stockraiser,

At the time OPEX was estimated as more, but the current OP isn't $70 - and a 'proper' NPV would be based on a conservative OP forecast - so not on $70 flat, or even $60 - and is OPEX $13 a barrel with low monthly production and water disposal. Presuming HH-2z is converted to an injector water disposal will be cheaper - but in the real world the cost of the well and conversion would be factored in - lucky they dilute instead so whilst the OPEX is low (hooray) so is the SP (boo) - same goes for the PW purchase that got the estimated OPEX at over 300bopd to $13 a barrel.

Skwizz,

'assets' including a lot of amounts that could end up joining the losses. Will they write down some of those 'assets' - is goodwill too high, and does some of the expenditure on exploration and evaluation need to be written off?

Is this the real reason for no CPR - not having to write down the intangible assets.

Painter,

I suspect the price will go up at some point in anticipation of the Turkey drill - the question is what price it will go up from, the longer the wait the more cash UKOG will be spending and more chance of a fundraising dilution first.

After that it all depends on results, oil shows? - it would be a bad outcome if no oil shows as Basur-1 flowed oil. Good initial rate from test? - good(ish) news - but Basur-1 flowed well for 6 hours but wasn't developed. Poor rate from test? - oops. Estimates of long term production rates - we'll see, UKOG aren't so good at giving out those.

nkh,

perhaps the reason SS doesn't list 'assets' is because they don't exist?

Anyone can look at the 2018 CPR and deduce that even the low case Contingent Resource figure of 0.592mmbbls for HH, which was based on a production profile HH-1 has failed to achieve, is possibly too high. Here's the low case daily average production forecast:-
Year 1 250 bopd
Year 2 175 bopd
Year 3 122 bopd

Average for year 1 of production from HH-1 is almost certainly less than 250bopd, even on days it has been in production.

Everything else is still waiting that first appraisal well by UKOG.

SS said that NPV at $70 OP one barrel was worth between £15 to £20. I make 0.6 mmbbls (which may be an exaggeration) less than £10mm (86% ownership) or 0.08pp so the remaining potential assets are valued at a risked value of £8mm at the current SP.

Of course in a sale UKOG wouldn't get the full NPV price.

They need some solid figures, not just finger in the air OIP / recoverable resources, for anything but rises based on hope which can (and has) evaporate.

The OPEX mentioned by UKOG was from the E Sadak field.

But no mention by UKOG of individual well flow rates from E Sadak, what the field produces, decline rates in wells and how many of E Sadak 1 to 12 appraisal / development wells are currently producing so pi can understand risk of failure, what rate is required for that OPEX and thus 'operating margin' - and thus estimate profit rather than 'margin.

Unfortunately UKOG kept to it's MO and just mentioned E Sadak wells have flowed at a rate of up to 1300bopd initially.

On the information available from elsewhere since starting development of E Sadak it's possible that most of the 'operating margin' has been spent on drilling the follow up wells to maintain production levels as each well declines.

I suppose it's best to keep to mentioning OP on this board, something that UKOG doesn't have the slightest influence on, even with its licence holding across the once upon a time nationally significant Kimmeridge play (current production zero bopd)

In contrast to the presentations and RNS and interviews about Turkey and how great it is UKOG prefers not to mention what its only operated field is currently (intermittently?) producing or revising the OPEX quoted last year now there is water production and apparently production decline as UKOG seem incapable of actually specifying a bopd from HH-1.

Always better to mention the 'might' rather than the actual.

At least 3 takeaways from that chart which plotted on a log scale (?) reduces the sheer scale of drop from the 2017 high.

1) The previous rises have all been driven by misinterpreted information or overblown expectation, BB, start of ewt etc.

2) The first prediction is a drop in price?

3) Unlike almost every rise in the past each future 'peak' isn't followed by a drop to below the pre peak SP because of point 1 - ie expectation not fulfilled. The drop in some cases is long and drawn out as it takes the market time to realise the initial expectations are not being met - mainly due to UKOG lack of communications.

The 4 mini peaks imply that there will be 4 positive events at fairly shortl intervals up to about September that sequentially help the SP, with no significant negative events. Without an explanation of how the prediction was modelled it's GIGO. I suspect it was near term dilution followed by 4 positive Turkish RNS. This is O&G exploration / appraisal, rarely does it mean continuous good news - the first RNS following Basur-3 will be interesting and we'll see whether UKOG will present a balanced assessment of any test.

But charts over the last couple of years seem to always predict a significant maintained rise in the near future, seemingly based on an analysis that the low has been reached, apart from short term spikes even I can predict these assessments haven't come true.

Maybe this time rodders.........

Ozzy

If you read my post that's exactly my point - UKOG have given a figure without any information as to what it's based on. In fact the whole Turkish adventure has little in the way of hard facts about the play they are chasing when there is a field about 20kms away along strike of the anticlinal feature.

If production is 50bopd is OPEX at Basur going to be the same as E Sadak - $15 a barrel, 100bopd, 500bopd? Profit per barrel is fixed to a production level.

At least in the UK they have specified the flow rate it applied to (HH Portland over 300bopd = $13 a barrel) though that was without water production.

What are the rates seen in E Sadak wells in production, is there a reason Basur will be better, worse? What happened to those wells not in production, why was Basur not developed with such a fantastic initial flow rate. This is meant to be the new dawn but UKOG are picking and choosing what to release about Basur / Resan and the analogue field the play is predicated on, it is their prerogative but why?

At least the last time they made that sort of statement (in September 2018) they had drilled the well and started testing:-

'The Company's economic modelling indicates that HH-1 Portland is robustly commercial at even the lowest observed sustainable daily rate of 140 bopd and at oil prices below $60 per barrel'

Interesting the average on production days in October, November and December (ie not a sustainable rate) was less than the lowest observed sustainable rate during testing - even after 'optimisation'.

'Any' future oil production? What production at E Sadak (but then UKOG have never mentioned what E Sadak production is and thenumber of producing wells) gives OPEX of $15 a barrel (at HH the OPEX was based on 300bopd) and what would be the threshold for going into production.

Whilst UKOG raises cash for drilling by issuing shares so well costs to date are effectively sunk AME should apply an economic analysis regarding any future wells if it has to pay 50% out of cashflow.

Mirasol,

SCDM transferred shares into their own investment arm that were given in payment to a subsidiary for the BB licence area and they added to them during the BB build up. Presumably they waited to see the initial outcome and with their knowledge of the licence and geology from ownership of Celtique bailed fast.

The billions of barrels was OIP in a source rock, the Kimmeridge, and was stated even before the well was tested. But even the Nutech report had caveats that needed to be heeded. At the time there was a BGS report with a different view because they addressed moveable oil in the shales (ie that oil you might be able to produce from the shales) not all OIP. That report published in early / mid 2014 before HH-1 was drilled also suggested the KL play (maybe Angus had read the report) - but did not address it in detail. It was mocked by DL as being wrong, SS was a bit more circumspect - having read it he probably realised it was addressing a different subject, the oil in the shales - and specifically movable oil.

Despite testing the Kimmeridge for long periods UKOG didn't drill a horizontal following HH-2z, and didn't dual complete HH-1 and apart from planning to drill a further appraisal well 'updip' for this supposedly not structurally limited regionally prospective play have said nothing about their 'findings' regarding long term flow rates or even a low bar oil recovery.

.....and ozzy in case you hadn't realised that as well as having quite a few shares I post because people like you, TH2 etc post. Keep up the good work, but you're no freasabird.

Ozzy,

" some would even say it was dishonest to post an assumption as though it was a fact " that's what penguin does all the time"

However, you complain if I put, might, could etc - which is describing an opinion.

A lot of posters seem to think that 'opinions' about the future expressed by SS and UKOG (could, might, if etc.) are facts to be quoted without acknowledging that it's only a point of view and other outcomes are possible, and in fact likely - but you don't like history lessons either.

I suggest, as I have requested before, you specify an occasion when I have expressed an opinion as a fact and then I will address the issue, it should every easy as - like a lot of your accusations - apparently -'I do it all the time'. I would point out though that quite a lot more of my opinions have turned out to be fairly acccurate despite them being in your opinion 'negative'. Those wonderful positive posts expressing a higher SP in a week, month year without any acknowledgement it is a guess that seem to consistently be wrong.

Are you aware this is a discussion board about UKOG, not other posters but your wild accusations about other posters that you can't possibly know anything about needs addressing.

But discussion about a company includes possible futures - it's the posters you act as a simpering cheerleader for that have got it wrong for years now and seem to keep getting it wrong even now.

Ocelot,

we've had o couple of conversations on this.

as you posted:-

'A 2nd morning without a 7am RNS.

It increasingly looks as if the 2nd instalment has been paid in full in cash. This would suggest:

1/ pretty tight cash management;

2/ that they are unhappy with the current level of their share price.'

I suppose you now think they don't have pretty tight cash management, and are happy with the SP?

My reply to that post was (as usual quite long winded) but included:- 'My guess, PW will get shares (or maybe PW have agreed a delay on the understanding they get all cash at the next 6 months payment as their agreement doesn't have a discount to the vwap) allowing a delay to a cash raise,'

There's also the 'bonus' that this is outside the current 3 billion share authority as it was signed off before the AGM, if they had paid cash and then had to raise it another way it would have (significantly) eaten into the remaining authority (about 1.5billion), plus the lack of discount to vwap......

as for Alba - it seems they've been told more than 'regular' investors - but maybe at last a realistic forecast of production, perhaps they've given the game away - but until they pay their share any cheering on drilling from the sidelines is meaningless - as the saying goes they need to put their money where their mouth is.

TH2,

you seem to be blaming past events for the present SP - but you seem to pass off the main reason as an unimportant 'well issues' - perhaps I can help:-

BB was a complete failure - branded as a success because they learnt soooo much that they didn't bother to drill the HH-1 sidetrack into the Kimmeridge at HH despite having PP and planning to drill it immediately after HH-2z

HH-2z the Portland horizontal steered along the 'sweet spot' which SS said would deliver 2 to 3 times the vertical HH-1 well and posters claimed would deliver even more is now going to be used, if the OGA approves it, as a water injection well because even after a 'successful' intervention to stop the water it started again from somewhere else. Despite not being able to even spot another fracture with water in the well they are so encouraged that they plan to drill some more.

HH-1 which started production in March 2020 delivering more than 300bopd had to have a major workover in October 2020 which seems to have optimised production at something under 140bopd on the odd days they actually produce it - and it's also producing water.

Blame the SP on OP crash/covid (OP practically recovered, UKOG SP SP a year ago pre covid about 0.5p ) and 'unlucky' Sanderson - who prefers to talk about the golden but unproven future rather than what's happening at Horse Hill.

I suppose he wouldn't want to say much about the return on the £70mm spent amassing all the Weald acreage and drilling 2 wells - except it's now 'projects' worth 10's of millions - which is a surprise as Loxley is so massive it's going to save the UK economy (or something like that) just like the Kimmeridge after 2 days of flow tests was going to provide 'up to' 27% of UK's oil demand.

Even BBs 10p was based on the market being fed hope rather than substance - oil bottles and production completions, a perfect sidetrack - and then silence.....interrupted by poor flow rates but of course the next test was the important one - until they ran out of zones to test.

Ocelot,

and yes I don't 'do' SP - meaning I don't indulge in predictions of future SP - as indeed you don't. When you asked again what I thought of the current SP I did reply - terrible - and you agreed.

I've posted before that the SP of UKOG is by it's very nature unpredictable and I now just trade on spikes - so at some point I hope the SP will be higher - the dream of it staying higher because of 'success' is the different thing that you are peddling, and needs different information than that currently available elsewhere to not consider risky.

As you have pointed out 'Is it possible SS has access to more information than yourself?' - so why is the information UKOG do promulgate so meagre and restricted to distant fields and initial rates - whereas there's 6+ years of data about E Sadak - any reason you can think of - better to let investors 'imagine' how good it could be rather than provide information to base it on.

Here's how deceived posters can be:-

'07 Jan 2019 12:11
Personally, don't think the market cap is correct;

Anticipate the share price to re-rate:
1/ with more information about current testing;
2/ as UKOG's plans for the future unfold in reality and they increase in credibility.'

(SP 1.375p approx 5.6billion shares, mcap about £77mm)

So was that anticipation of success that the market hadn't factored in?

...........and the day after that those that believed all the positive posts and bought in find the board empty again as UKOG don't deliver, or some other 'nailed on' outcome or expectation fails to materialise- and finally they work out that all those predicting great wealth have sold - to them - welcome a new batch of lth wannabe traders.

Sometimes it takes 6 months, others a few days- look at the share chart but 'this time' it's going to be different.

Posters here pounce on any maximum or caveated expectation quoted by UKOG and calculate next year's profits before the bit has turned - yet examining past performance or trying to better understand what UKOG is getting involved in is branded as 'twisting facts' or irrelevant.

Part of the problem is the continual exaggeration of what succes might mean with little regard for what success might really be. UKOG can limp along and be 'successful' on a few barrels a day and dilution to fund new ventures, no good for investors but fine for a BoD that has a few thousand quid of shares between them.

I think I'd better leave you to your ranting,

capitalising words, lots of .......... and " " and !!!!!

Oh dear, and I'm the unbalanced one?

BTW I said twisting what I say - opinion based on data ie facts.

Let me help you.

Apr-19 25457 = 849bopd - first data point in Scout report
May-19 24949 = 805bopd - dropped 44 bopd
Jun-19 22140 = 738bopd - dropped 67 bopd
JULY E Sadak 11s put on production - so only partial additional production from well
Aug-19 27428 = 881bopd - increase of about 150bopd from June presumably from E Sadak 11s
Sep-19 22805 = 760bopd - decrease of 120bopd
Oct-19 23712 = 764bopd - slight increase of 4 bopd
Nov-19 18789 = 626bopd - decrease of 140 bopd

Other data also shows similar rapid decline - theNovember figure is suspect but over 10% drop from August to October is rapid - the same goes for April to June.

I think you obsession with my posts and trying to twist what I say to fit your narrative is the only problem. Btw where do I accuse SS of lying?

Unfortunately I'm using factual information for my conclusions - yes it might be wrong but data is data.

Btw you can't use an average of the figures to then calculate a decline as an average will be somewhere in the middle between the maximum and minimum

Ocelot,

Thanks for pointing out AME operate E Sadak, I may have mentioned that AME operate E Sadak and are the operator of Basur / Resan before so hopefully (but assume nothing) UKOG do have plenty if not all the information about that field. It's always helpful to have a reminder though maybe I need to mention it in every post about Turkey for the forgetful?

But in the 6 months since the first announcement of entry into the licence and comparison to E Sadak UKOG have hardly added any facts to help the market understand why the Turkish venture is such an irrisistable opportunity. I don't view verbal quotes about hundreds of millions of value as facts as first you need to prove the large OIP exists, and then where a lot of wells are required to recover 10 to 20% of it doesn't necessarily translate into a huge NPV.

A 'fag packet' calculation s(much loved by posters in 2016) suggests E Sadak could have produced up to 1mmbbl since start of production 6 or so years ago. In the July 2020 presentation that's another number that was omitted - on slide 10 - remaining 2P reserves - do AME not know how much oil has been produced, did they not mention it to UKOG? At the moment they're about to drill well 13 - or possibly they have. That could mean a lot of the profit made so far might have been spent on drilling.

Without these scout reports and other non official UKOG information it might be assumed there were multiple wells producing not much less than 1300bopd each with convoys of tankers hauling it to Batman. Just stating what appears to be the highest initial well rate seen (how long? production or test) when it's apparent from these scout reports that after drilling 12 wells the total field daily production was little more than half that at the end of 2019.

Perhaps irrisistibility is in the eye of the beholder. Wells that might produce 200bopd when your flagship well at HH managed to drop to a little over 100bopd in 6 months from 'more than 300bopd', and produce water and need a workover, may appear irrisistable - and UKOG are fans of big (but in the Weald so far unproduced) OIP figures.