Member Info for Penguins

HH1AN2

non-oil expert berates other non-oil experts for saying something they haven't, and then proceeds to make an 'expert' opinion based presumably on extensive knowledge of both the Weald and the Zagros "fold-belt" petroleum systems.

Every well is a gamble - yet Turkey will be different.

No the problem isn't that UKOG plan to drill unsuccessful wells it's just they fail to mention (apart from in the small print that certain posters claim was only there because it had to be) how risky the appraisal projects are even with good initial flow rates (sorry Ocelot it needs to be said).

I cannot remember any poster claiming UKOG has deliberately failed (as if this was an oil version of The Producers), but UKOG does seem to be prepared to flog dead horses and go for risky appraisals - whilst behaving as if nothing could go wrong, and when it does...............

Ocelot,

perhaps consider that AME were so keen to drill this well that will pay for itself so quickly and fund another that they have passed all the risk of this appraisal on to UKOG, and getting them to share the cost of any further exploration.

I'm aware that AME have mentioned the application - the point was that UKOG haven't and nor has AME mentioned what the exploration potential of the blocks is so Troll is just making stuff up.

Continually posting initial test rates is an example of the problem with UKOG - endless mention of initial short term flow rates - but no mention of what is likely long term - for example by giving production, not test, information from the nearby analogue field - E Sadak. Although when they did for HH-1 (estimated 362bopd) they got it wrong anyway with an average of 208bopd on producing days over 6 months, and for HH-2z 720 to 1080bopd.....................

So a six hour test at 2000bopd is predicted to become a long term rate of...............? and that's the problem with initial rates from carbonates. Initial rates at HH of 901 bopd from the KL3 over a few hours have become 5 years later...........?

This from Neil Ritson in 2018 before the ewt about HH Kimmeridge:-

'Now these are fractured reservoirs and they will have been offloading the oil from the fractures. What we are going back in this year to establish is if you leave them open for a period of time what is the sustainable rate, which you would expect to be down in he 100 to 200 barrels per day range if it's going to be commercial.'

All I've done is used AME production figures that undeniably demonstrate that the E Sadak production is not currently 500bopd per well, or anything close to it. The prediction for Resan-Y the possible follow-up well to Basur-3, on the larger structure within the Resan licence, is according to the work programme in the presentation 200bopd - but even that figure hasn't been mentioned by UKOG.

Ocelot

In Turkey they are at the periphery of the play and the fields are relatively small, with what look like reasonable initial production rates, but not 'gushers', and then fast decline, so to keep field production up new wells keep on needing to be drilled. The AME production figures, with annual production dropping from about 500,000bbls in 2018 to about 325,000bbls in 2019 and to an estimate of about 275,000bbls in 2020 looks like a stark illustration of this.

E Sadak is the analogue field for Basur / Resan - AME are predicting for E Sadak 13 a rate of 500bopd. But the total production for AME in Turkey in 2020 averaged about 750 bopd across 6 fields. Like UKOG AME is coy about individual field production rates but even if half comes from E Sadak that means about 70bopd average from each of the what appear to be 6 production wells - though 12 or more have been drilled.

So is the 500bopd just an initial rate, and then what? I suspect that UKOG are hoping that E Sadak 13 testing is good and available to RNS when Basur-3 needs cash. But it is interesting that the prediction for Resan-Y is 200bopd (UKOG 50% 100bopd).

Troll is just making stuff up - UKOG haven't even mentioned these new licence applications and AME certainly hasn't suggested well rates of 500bopd or that they will drill 15 wells. The licence area of each of the three applications is about 150 sq km each so not particularly 'bog'.

HH1AN2,

not sure they'll learn too much more from a long term pbu that they don't know already from the ewt and production for 6 months. During the ewt there were 2 periods when HH-1 Portland was shut-in for months. During the first Kimmeridge ewt, then when HH-1 production was switched to Kimmeridge for the drilling of HH-2z, the Portland was switched back on in early 2020.

As for a CPR - I can't see that happening. The difference between what UKOG have previously claimed and what's likely to be in a CPR would surely be an embarrassment. UKOG can get Xodus to produce the same information for their own use, or produce it internally - it just won't cost as much, and they don't have to release it to the market.

What makes you think that's why the well is shut in? I think UKOG would say it was for a CPR if that was why the well was shut in as it would at least sound good.

Last time a CPR was mentioned was in March, although not directly, mentioning booking reserves which requires a CPR. Previously the actual mention of a CPR was 11 September 2019:- 'It is planned to commission a new Competent Persons Report to establish the Company's net Reserves following completion of HH-2z production testing in the Autumn.'

They will be monitoring the reservoir pressure - maybe they're hoping that the reservoir pressure recovers to above the bubble point at the well (presuming that it had dropped below) and this also reduces water production.

Turkey,

still haven't listened but noticed I misread the slide showing the new licences applied for - they are near Oymantepe not Arpatepe, and Oymantepe is another name for E Sadak. We await UKOG deigning to tell the market in the UK they have applied for additional acreage in Turkey with. no doubt, fees to pay and work programme obligations.

Anyway just reading the slides the application for the 3 new licences is subject to a 90 day period when other companies can overfile - then a decision on who gets the licence/s is made within 60 days. Not sure how the decision is made or how much competition for acreage there is.

Mirasol,

UKOG aren't a partner in E Sadak. And I would bet those figures are initial rates.

Not all positive. I've not been able to listened but just looking quickly at the slides

The whole operation in Turkey in 2020 netted an estimated 275,000 bbls to AME. That's about 750bopd (or one HH horizontal low case!) across 6 fields including E Sadak (the Basur / Resan analogue).

Also whilst not onerous there's a royalty of 12.5% to pay on 'profit' that hasn't been mentioned (plus taxes).

2 years ago AME production in Turkey was about 500,000bbls suggesting higher rates across the fields - but also suggesting rapid decline (2019 about 325,000bbls).

The new leases are near Arpatepe which had production of about 1,700bopd from 6 wells (possibly in 2016 the AME site isn't very up to date) - AME are 20%, their net 335bopd.

If that and other fields account for half the AME Turkish total then E Sadak's 5 or 6 producers (maybe the commentary says how many producers) are running at an average of about 70 to 80 bopd each, though almost certainly more initially.

If only UKOG would be more open it wouldn't be necessary to dissect other data to try and arrive at information about what UKOG are spending shareholders cash on.

Tony,

There's a planning permission for more wells at Horse Hill, in Surrey unused - a site able to exploit the apparently nationally significant (2015 - 2017) Kimmeridge, and the Portland. Yet UKOG have zero Kimmeridge production wells despite long term testing. Despite being in production since March this year UKOG have been coy about the Portland daily production from the one producing well, with the other last mentioned as being shut in (in June).

Is all this guff about wind and solar because of Loxley, but there is no certainty that gas will be found there, nor if it will be commercial. GB-1, the discovery being appraised (again) undeveloped with 2 failed appraisal wells.

Most UK counties don't have oil or gas resources, some solar, some wind though that's mostly offshore (like most oil and gas production), and there's also hydro again a bit tricky even for mountainous Surrey.

We're a trading nation so we can buy oil, gas, leccy and sell each other coffee, but self sufficiency will only come with renewables / a high OP so we'll stop using it

Wizard

Where exactly is UKOG though?

About to embark on a new gambling adventure paid for initially by issuing shares (and perhaps for longer), with under 100,000bbls reserves in non operated fields in the UK.

No daily production figures published for it's one operated field and the only credible information not tankers seen (4 seen in one day = 880bopd forever) but 3 month old production data from OGA - and an RNS on 5 November, probably issued through gritted teeth (told to by the Nomad), mentioning water, gas and decline happens to fields in production (no sh*t Sherlock - but hopefully not 3 months after starting with zero water and over 300 bopd), a number for total production over 6 months that was not comforting (208 bopd average in 135 days production) - and investors apparently expected to join up the dots themselves that there were issues.

If only you took the same approach to UKOG that you do to other companies. We would be spared your posting here about how great UKOG is (or would be, except.......) ignoring the pain of constantly averaging down only to be outwitted by UKOGs seemingly infinite ability to be unlucky or like Oliver keep asking for more and lower the SP.

Maybe Turkey is the white Knight - unfortunately, like a gambler hiding their losses, UKOG has so far failed to produce any useful information (most investors are wise to the old OIP and recoverable resources that don't materialise trick) to back up whether it's roulette and going on red or black, or they already have an ace and hoping for a picture card in blackjack - just a ticket to Las Vegas with tables waiting and a pocket waiting to be filled with shareholders cash.

Faites vos jeux.

Troll,

Zoom wrote that before it was realised that the 68,750,000 warrants supposedly exercised at over the ask on Friday were forward sold on the Thursday before the Loxley planning meeting for 0.22p by WH Ireland, UKOG's broker. As Gkb47 pointed out these warrents were almost certainly given to WHI as payment for the £2mm discount placing warrants apparently without it being mentioned in the accompanying RNS.

Looks like they made a nice £41,000 profit selling on the day you were encouraging buying at 8:23 you posted:- 'Should see a strong build up in the price towards 0.5p continuing today though in anticipation of planning success. More tankers following last nights stealth run will boost it too.'

Seems WHI weren't convinced, selling at 9:29 that morning, surely UKOG wouldn't have sent out tankers the night before to help out?

As for turning up the taps, seems more like turning on the tap. When was the last oil tanker actually spotted. There was a flurry around the time of the planning meeting as you pointed out, was that because UKOG hoped the twitter reports would help the SP, was a placing about to happen but got pulled on the rejection?

Ocelot,

The problem with Turkey is, like so many UKOG projects, we're flying blind relying on UKOG's judicious choice of yet another 'appraisal' well that depends this time on a good short term flow from a fractured carbonate that hasn't been returned to in decades since discovery.

What are the production flow rates for E Sadak the analogue field, decline? Water cut? Ten wells apparently drilled on that field since 2014 (according to ex-poster Sinbad). Seems a lot for a fairly small field.

A placing is positive when enough is known about what it is being spent on. Not being in the Weald seems to be the USP of the Turkey adventure.

Good spot,

Exactly 5% of the £2.2million. Good of them to dump them before the Loxley decision - nothing like your broker showing a bit of faith in the company. I'm sure all those encouraged to buy at a bargain price above that will be happy.

Meanwhile that morning at 8:23 Trollhunter2:- 'Should see a strong build up in the price towards 0.5p continuing today though in anticipation of planning success. More tankers following last nights stealth run will boost it too.'

Seems WHI weren't convinced, surely UKOG wouldn't have sent out tankers the night before to help out?

But it goes further - they must have come to a view that the rise into the planning meeting was as good as it was going to get for a while.

Nkh,

Thanks for the link - though you meant this afternoon.

AD*FN doesn't put the actual time of a delayed trade - the spread at 9:29 was 0.22 - 0.23p so easily a sell.

Surprised no one pulled him up on that - I suppose it didn't suit the P&D.

Don't be silly - no one is putting ou £110,000 without guaranteeing a profit.

Classified as a buy at 0.22p (spread was 0.19p to 0.205p) - but presumably the forward sell of these shares.
Thursday, 26/11/20 15:20:38 68,750,000

Nice profit of £41.500

But Wizard,

You are thinking up excuses for why UKOG haven't done things, and still are.

The only excuse for lack of progress I've seen is the pandemic. The non-paying was covered in the December raise of £2mm 'Consequently, and in addition to the above, the net Proceeds will be used to fund any potential shortfall from the HHDL partners'.

You asked a question about the SP in 12 months time which will be subject to what happens at HH and Turkey. If the workover has significantly improved HH-1 that will certainly help the SP, if Turkey is successful the same.

The lack of news on HH-1, based on previous radio silences, probably means the improvement is not significant - but we don't know nearly 2 months after the intervention.

The information about Turkey is pretty vague apart from OIP calculated on an unknown map and parameters, and approximate recoverable resource, plus a load of irrelevant BS.

As I replied 'Anybody holding shares should review their position as events unfold, not decide to hold for the long term regardless.' I should have added:- and not rely on a SP forecast depending on everything succeeding - nor on everything failing.

As for the 2018 CPR the downside case had an average over the first year of production of 250bopd. HH-1 managed an average over the first 6 months of 208bopd on producing days (155bopd average over 180 days). So not getting near the worst prediction of the CPR.

I'm sure there's plenty in RNS that no longer applies, perhaps you would like to point out all this important information I've missed though.

Wizard,

I'm glad you put that it was your opinion, but you forgot to mention your role as UKOG's number one apologist making up excuses for the company, as they don't seem to bother to explain why planned activities just stop being mentioned..

ridiculous to claim that the ongoing vexatious JR case is stopping any progress by UKOG. They've recently spent a significant amount of cash working on HH-1 - we're still waiting for the results of this optimising which took place nearly 2 months ago.

and any decisions about not drilling HH-1z Kimmeridge horizontal (June 2019), not deepening through the Kimmeridge whilst drilling HH-2 pilot (October 2019) were taken before this case was brought - and dual completing HH-1 could have been an incremental cost to the recent workover. When and why were the decisions taken to not do these things?

UKOG could produce figures regardless of the JR - if they don't have the figures what have they been doing for the last 2 years or so. They currently have the planning permission and FDP approval from the OGA required to produce a CPR for HH-1 Portland. SS gave an interview at the end of 2018 throwing figures out all over the place (though not in an RNS) about the Portland and Kimmeridge, at about the same time as the Corporate Presentation showing the unachieved unrevised HH and other projects gantt chart.

The only reason the jury is out on HH is because UKOG are not being open about what has, and what is happening with both Portland and Kimmeridge - would the 5 November update have been issued mentioning in passing that water and decline happens to fields if not for the OGA release of production data revealing low production and water cut.

The only new activity over the next year will probably be drilling in Turkey where UKOG won't be subject to scrutiny from supporters at the gate and teamed up with a private company that has no obligation to release information - absolutely perfect for a company that prefers to keep bad news to itself.

Some posters seem to think that Turkish success will lead to cashflow to enable more expenditure in the UK, yet if successful any 'profits' will likely be spent drilling more wells and even UKOG say:-

'Whilst the Company believes that at current oil prices a successful initial programme can likely self-fund further production drilling, it may be necessary at some stage for the Company to raise future working capital to bring the project to fruition.'

Whilst UKOG have this to say about AME:- 'Possess key strategic knowledge as operator of first producing Mardin field, E. Sadak.' Despite surely knowing key information, such as flow rates in production from the only field exploiting the Mardin, it hasn't occurred to UKOG to pass this sort of information to UKOG shareholders. The Mardin will be the primary target of the first well Basur-3

Cynderlad,

According to HMRC if you're paying below the official rate of interest it's classed as a beneficial loan, and:-

'You must report the loan on a personal Self Assessment tax return. You may have to pay tax on the loan at the official rate of interest.'

So as long as he's declaring it in his tax return it isn't necessarily illegal (and I don't believe anyone has access to those except the tax man) - he will also have to pay any NI due.

This information is easily found on the HMRC site.

btw Do you not think that the accounts were probably prepared by an accountant who surely wouldn't put something that was blatently illegal.

Wizard,

I don't do SP.

But that's a stupid question anyway as the answer is yes and no depending on many things we don't have the information to properly assess.

Anybody holding shares should review their position as events unfold, not decide to hold for the long term regardless.

You'll have to wait until later if you respond as I am off out.

Wizard,

Why do you think government policy determines exploration success. Either HH, Loxley or IOW are or will be economic to develop or they are not. In the case of HH the question is whether any further development will happen as I suspect the results at HH are not what UKOG expected, though without a formal CPR since just after the start of the ewt we don't know what they really learnt from the ewts.

I suggest you stop worrying about whether I have shares or not (although I do) and ponder as to what a better understanding and analysis of the information available than supposing UKOG knows best and only accepting the apparently positive viewpoint promoted by their RNS which is eagerly grasped by posters, might enable in terms of investing?

At least I'm not likely to be as disappointed as you surely must be with UKOG's performance so far - comparing your past posts with what has happened so far.

Tomorrow might bring a RNS that blows the doors off - but does a leopard change it's spots? Within 48 hours of commencing production from HH-2z after the intervention UKOG issued a RNS on 9 March boasting about the dry oil and rates up to 778bopd. Then silence filled with sightings of multiple tankers and posts claiming massive daily rates, only forUKOG to reveal the truth on June30, more than 3 months later.

Wizard,

Perhaps rather than remembering you should try some research.

Water cut started in May (9%) and reached 24 % in June. Therefore water started in May some time and seemingly continued before and after the new pump was fitted in June.

Wealdoilers (pboo) tweeted this in June:-

Weald Oilers @WealdOilers Jun 10 #ukog#horsehill
RNS said HH1 intervention / re perforating.
We saw the pump come off and the pump rods taken out and the Wireline unit go on.
Is this the perf gun going off.

The pump (which is the linear pump on the well at surface), was removed June 9, and johnrog reported the new linear rod pump was back on the well Jun 10. As the pump referred to just pulls the rods up and down it's hard to see why it would make any difference.

btw - it wasn't the perforating gun going off (from a BGS seismogram), that wasn't until the recent workover, so don't be too reliant on these guys reports of what's happening. To be fair their reports of what they see seem to be truthful - but they keep wanting to add oil tankers for the time they're not there - equally waste tankers could also be leaving unseen.

Mirasol,

Thanks for finding the relevant bit.

But if I were Alba I would negotiate as the non-payment bit is one part of the agreement - but this bit says the loan is 'repayable on the date falling 30 business days’ after HHDL’s financial year end following such loan being made and all repayments are to be made on a pro rata basis between shareholders'.

I suspect that they have come to an arrangement.I

As at 30 September 2019 Alba's loan to HHDL stood at £2,426,401 (HHDL Full Accounts, page 22).

Alba, like UKOG, are owed money by HHDL as paid cashcalls became loans to HHDL and historically Alba has paid cashcalls. There's a mechanism for when the loans become payable - if I remember correctly (I'm not going to waste time ploughing through the companies house and or the information in the readmission document) Alba can request payment so perhaps cashcalls to Alba are reducing what HHDL (ultimately UKOG) owe Alba rather than switching on the mechanism for more %. But we don't know if there are side agreements, or what they might contain, between the HHDL shareholders so anything could be happening.

Having said all that UKOG's record of keeping what they are meant to keep up to date on the website isn't perfect so who knows, and is it worth worrying about at this time?

Cynderlad,

The problem isn't so much can they squeeze a bit more oil and less water out of the Portland but the economics of more wells starts looking dubious with what is starting to look like a reservoir with a significant amount of fractures, some of them acting as water conduits. If water production is significant profitability depends heavily on a notoriously unstable OP. Spending on a well (even using the SS piggy bank) should be economically justified. The investment story for pis wasn't a couple of wells producing a few hundred barrels of oil a day, and as many have posted and tweeted that's why UKOG is looking to Turkey for good news.

Xodus in 2016 were very cagey about the mechanism of production, and were not much more enlightening in 2018. But the apparent rapid fall off in oil production possibly indicates there's a significant element of production from fractures in the Portland plumbing in to the 35 ft gross sweet interval.

If that is the case water injection for pressure support and disposal may not be advisable with rapid migration from injector to producer through fractures and / or the 'sweet' interval.

UKOG needs to come clean about what is happening at HH including the Kimmeridge and future plans. Silence when information is coming out that has shown them to be less than open about what's happening is not a good look. Perhaps they are waiting to be able to announce progress on the Turkish project to soften the blow.

Wizard

They were planning to install generation from Portland NG for the site - it's in the 28 Apri, RNS, and if they are producing then that's what's happening to the Portland gas. I doubt they have bought (or hired?) more capacity than needed for that.