Member Info for Penguins

Well Sinbad and Bidfoot,

'The judge, Mr Justice Holgate...........................He indicated that a decision in this case may need to wait until after the ruling by the Supreme Court on whether the government’s approval of a third runway at Heathrow Airport took account of UK climate change commitments.'

Not sure when the Heathrow ruling will be made but probably not tomorrow. The case was heard in October and I've seen January mentioned - but if Justice Holgate decides to wait and then decide, even if Heathrow's decision is tomorrow it took over a month.

I would be very careful believing what some posters say about other posters - especially determining who is lying and who isn't.

Stonefold my post was on the 'results' thread not the staines one. The Staines case has been decided.

It's the high court, not the local magistrates court.

Very unlikely that there will be a 'result' tomorrow, the judges will read the law, look for any precedents, discuss and mull over a decision.

Any decision will be poured over by the losing side so they will want to be as sure as possible they get any reasoning right.

Might be weeks., they don't usually hurry themselves.

Wizard,

You posted:-
'Maybe I'm wrong but if there is no production permits there is no reserves so no HH or development.'

You're wrong, or at least this is what UKOG think; RNS 11/09/19:-

'Critically, this consent means that the field's immediate oil production from HH-1 and HH-2/2z will no longer be limited to existing extended well test planning consents. The ability to produce over the field's economic lifespan also enables the transfer of current and future assigned recoverable resource volumes into the category of Reserves, which, by definition, conveys with more certainty that a known volume of petroleum can be produced commercially over a given time.'

Your post 16/08/19:-

'The other sticking points remain the 25 year production licence with the permission for four more wells & the transport conditions that remain to be signed off.'

So according to you only the conditions needing signing off, though as usual it is factually incorrect, a production licence is a PEDL but conversely gives no absolute permission to produce, planning permission gives permission for the surface facilities being built, tanker export etc, and a FDP gives actual permission (from OGA) to start and continue production. There are additional permits along the way EA, HSE.

UKOG has the PP, PEDL and FDP for HH-1 (which means HSE and EA sign off), I believe all PP conditions have now been met, and UKOG claimed the day after the PP award they were no longer bound by the ewt restrictions. But this hearing is to decide if the case can go forward, even if it is allowed it isn't decision time. It is very unlikely to go forward let alone succeed.

The reason there are no reserves is that UKOG have, even since obtaining planning and a FDP, not commissioned a CPR. From RNS, they first were getting one after planning was submitted, then when the planning was approved, then when the FDP was in place. I suspect the problems with the Portland have stopped them, not this vexious case.

Wizard,

You have claimed this challenge to the PP is the reason UKOG haven't embarked on the development as per the planning permission - which I presume is what you are alluding to. I suspect, like so many of your positive hopes, this isn't the reason. In case you hadn't noticed they seem to have problems with the Portland, and are unwilling to do anything with the Kimmeridge, and this was before this challenge appeared.

I would be very happy if UKOG would demonstrate that their view of HH was as positive as yours by getting a CPR done, or even publish some equivalent information, that demonstrated that HH was not as bad as it appears to be without having all the data they have.

In your scenario I'm sure UKOG will mention the plan to progress the HH development, timings and how they are planning to pay for it, in the RNS announcing their victory in the JR hearing, or maybe it will be some waffle about allowing 25 years of production.

We'll see.

BTW, being pretty certain that the JR will fail and Loxley will be passed isn't positive?

Wizard,

If there was any current information about HH, Loxley, IOW or Turkey from UKOG that enabled a solely ‘positive’ view based on fact rather than hope I’d be happy to analyse it as such.

The amount we know from UKOG about the current and expected production from HH, or anything to help an analysis beyond OIP and recoverable resources about these proposed drills, is minimal, justification limited to oil shows in Arreton-2 (IOW), gas flow from Godley Bridge-1, 7km to the west of Loxley, though 2 attempts at appraisal 4km to the west of GB-1 failed and Xodus didn’t think much of UKOG’s Loxley mapping in the 2018 CPR, yet posters seem to be already booking the reserves.

Turkey information limited to a ‘blob’ map and a plan to test Basur the smaller of the 2 closures – probably because of the initial rate in the discovery well in a six hour test was 2000bopd – but short duration initial rates in a fractured carbonate reservoir can be misleading, eg Kimmeridge at HH. Luckily UKOG know how to deal with this, or better still not mention it. The wells on the larger, Resan, closure only had oil shows.

I’m sorry I don’t indulge in the what if everything went right – I can leave that to plenty of others, maybe they don't realise that’s what they're doing, when it’s pretty obvious that isn’t always the outcome in the real world.

Of course a criticism about always being negative would have more weight if the SP had been higher today than in September 2018 when testing began, or there had been any significant rises since then that held. Whilst I’m sure I’m not always right (I predicted, based on UKOG expectations a SP of 1.5p to 3.8p following 2 successful Portland horizontals), nevertheless looking back at previous posts sadly my posts have been considerably more accurate about what's happening than yours. Most of any balancing positives I've seen in your responses to my posts have mostly (all?) failed to materialise.

My post 20 September 2019:-
SS gave figures of £15 to £18 per barrel for Portland and £15 to £20 for Kimmeridge so assuming an approximate mid price for both then say £17 per barrel gives a 100% value between £119mm (7mmbbls) and £297.5mm (17.5mmbbls) so 86% is £102 to £255mm = 1.5p to 3.8p per share (assumes 6,750,000,000 shares), but these are based on these two wells contacting all the Portland OIP.

Cynderlad,

I'm glad you spot the humour in my posts, though some things are not laughing matters. So we're having a debate.

But I see ocelot is still avoiding mentioning the actual content of those assets, eg £17 million goodwill, nearly half, and probably most of the £34million is unsellable hardware in the ground well/s fail especially if the . Only £1.427mm (less than 0.02p per share) of those assets, of a production company, are oil and gas.

Even if the planning is refused it's certain to succeed on appeal and the well isn't planned until H2 2021 and UKOG's record on plans poor anyway - but it would be a good excuse. As for the JR no one really thinks it will succeed and if UKOG thought it would why would they have bought the production kit from PW, or spent money on the recent workover.

How many realised this JR was underway suppressing the SP until UKOG's RNS?

But I'd dispute that positive outcome of the JR = 25 years of production at HH. The 2018 CPR, though having no reserves, makes various assumptions that even the low case doesn't seem to have been achieved currently, and predicts only in the maximum case production continuing for 20 years. Results so far seem to indicate that it will be difficult to position more wells successfully. There has (maybe in UKOG's case 'should') to be a robust economic case (ie profit exceeds the well cost plus a decent return), for another well decision - not just money in the pot.

I'm interested that Loxley would be paid for by Turkey when the cash flow there (if successful) would be used for subsequent wells - and we have no idea what production flow rates (and thus revenue / cashflow) might be possible, rather than short term initial rates. UKOG are remarkably restrained in not revealing production rates in E Sadak, the analogue field?

Though I was alluding to 'real world' vs this board (and twitter) where a P (only to be followed by a D) seems to be underway, which I'm all in favour of as ocelot knows, but just make sure you sell rather than buy on the spike.

Be careful out there, when the tweeting stops........

Cynderlad,

deflecting?

Ocelot brought up the subject of 'assets'. Even if ocelot doesn't want to cdescribe what those assets are surely it's pertinent to mention that they are somewhat feeble.

Troll brought up various things that were described as assets (except they aren't allowed to be by UKOG). Explaining why is deflecting, and his last statement was pure fiction 'UKOG has a history of acquiring and growing..'

Anyway you seem to be complaining I'm not sowing doubt on the JR or planning committee meeting - but as you say they are both hopefully foregone conclusions - whether they will have any real world impact on UKOG is indeed debateable - but nothing in the near future is likely to change based on them both being in UKOG's favour. The only thing being the opportunity for a repeat P&D. The highest SP last time was 3 working days before the meeting. don't miss it.

As for Turkey there's scant information on the appraisal prospect - though they are testing the smaller of the 2 - and they'll need more cash before it starts drilling if the 'initial' meant anything in the last raise.

Ocelot,

Audited or unaudited?

And.......?

Is that a defence, or implying they would be any different - I don't t disputee it's not contrary to any accounting principles - just that accounting is as much of a 'black art as, say, the calculation of resources.

Anyway it was your posts claiming £60mm of tax losses I was referring to, UKOG don't make such a claim, you did

I think you need to review what's in those net assets Ocelot.

Strange for a production company that the sum of 2 items, neither of them actual oil and gas assets, is more than the £47 million of UKOG net assets.

£17 million of 'goodwill' made up of the difference between how much UKOG (over) paid for assets (vs what assets were identified in the deal) plus the £34million of expenditure on drilling etc at HH - seems like double dipping on your tax losses you're always going on about. Don't think transferring expenditure into an asset means it's a tax loss until that expenditure is written off - like the £9 million spent on drilling Broadford Bridge and subsequently written off.

All within the rules but it reminds me of the joke an FD I worked with liked to recount.

Managing Director to Financial Director:- 'what are our profits this year'
FD to MD:- ' what do you want them to be'

Troll,

There's a reason that the assets you list are not officially allowed to be included.

Until any of them has a well drilled on them and successfully tested nobody, including UKOG, Xodus and you, knows even if they might be a candidate for development. Even an apparently successful test doesn't guarantee moving on to development.

Every planned appraisal well or well on a prospect has an expected range of GIIP or OIP, prospective or recoverable resources - usually with a risk mentioned Whilst Loxley and Arreton have previous 'discovery' wells with oil or gas shows (both in the 1980's), Basur had a 6 hour flow test in 1964, but none were developed following further drilling.

In fact there are no definable assets for Loxley, IOW and Turkey, nor has UKOG suggested there are 100's of millions of value anywhere in their portfolio (though SS did 2 years ago for HH, still waiting for that CPR). All of these assets could easily end up with zero reserves - five years after discovery HH has zero reserves and thus zero oil and gas property assets.

They certainly don't own everything they need. More likely they have no cash to test Loxley or IOW, and not enough to test Basur - just to find out if the recoverable resources even exist, though only Basur is likely to be drilled in the near future.

As for a history of acquiring and growing, more like spending to acquire equity in licences with prospects and appraisl opportunities - offshore IOW Prospect M, Holmwood, Baxters Copse, Markwells Wood, plus the licence area just south of BB (PEDL 233) - and then relinquishing them.

As for the JR - that hasn't stopped them doing anything - issues with the Kimmeridge and Portland might have though.

Also you might be disappointed that it will be decided on the day.

I love the definition of 'assets'

£34mm was 'As a result of the increased expenditure on exploration and evaluation assets, associated with drilling on our Horse Hill oil field, these assets increased to £34.03 million'

So expenditure = assets even if they appear not to perform. Although I can see that a well is worth what it would cost to drill, but if it fails to produce oil it can't be pulled out of the ground and put somewhere else - so it has no value, and if it does perform it's value can only be realised if the field is sold.

and even better they acquired about £11mm in goodwill from Magellan(?).

The Company's goodwill increased from £6.29 million to £17.43 million as result of the acquisition the entire share capital of Magellan Petroleum (UK) Investment Holdings Limited for a total consideration of £12 million.

and that 11mm is based on how much it cost (£12mm) less 'net identifiable assets' (£0.847mm).

So of nearly £48mm of assets includes £34mm of assets which seems to be based on what they've spent drilling - and £17mm in goodwill. The only actual oil and gas properties assets are worth £1.427mm.

But that's accounting for you........

Troll,

I like the idea that SCC planning will ‘approve the gas discovery’ rather than give permission to drill a well to find out if the gas is there, planned by UKOG for H2 2021.

It’s almost (but not quite) charming that anyone still believes that anything in an RNS from UKOG (and probably many mini-oilers) referring to ‘recoverable resources’ will actually translate into reserves. It certainly hasn’t happened to UKOG so far despite having 100 millionbillions of barrels OIP to squeeze a few million barrels of reserves out of.

The quoted recoverable resources are from a Xodus ‘study’, presumably using maps similar to those that previously Xodus had refused to even calculate GIIP in the 2018 CPR (hence only a ‘study’).

Or as UKOG put it:-
PEDL 234 ‘is interpreted’ ‘If proven’ ‘further underline the Company's view’ ‘which in a success case’ ‘could have the capacity to power around 200,000 homes per year’.

Of course 'Loxley is planned ‘to appraise the significant Portland gas accumulation originally discovered and flow tested 8 km to the west by Conoco's 1982 Godley Bridge-1 well.’

What isn’t mentioned is the attempts to appraise the discovery by GB-2 & 2z about 4km west of the discovery well that failed (said to be with depth conversion problems), and the Alford well to the south east of the Loxley location that was also unsuccessful, yet penetrated the Portland reservoir shallower than GB-1: from the 2018 CPR:- ’The Alfold-1 well reportedly penetrates the reservoir at a shallower depth than the discovery well but is calculated to have no gas pay only some likely residual oil shows’

I find it odd that certain posters are trying to suggest that the reason why development of HH has not happened is because of this hearing regarding an application for a Judicial Review of the 2019 planning permission by an individual.

This against a backdrop where before any challenge was brought HH-2z had flowed water and production from the Kimmeridge was stopped.

After this challenge was brought UKOG have bought production equipment from PW for £1.65mm, which appears to be the likely extent of the development for the foreseeable future.

There are far more likely reasons for not executing the development, technical and financial

Significant and early water ingress, now apparently in both Portland wells and following a long period of dry oil testing. This after only producing tens of thousands of barrels of oil.
Extremely extended testing (usually up to 90 days per reservoir) suggesting difficulties in modelling the reservoirs.
Not drilling HH-1z (a Kimmeridge horizontal) after scheduling it for immediately after HH-2z.
Not dual completing HH-1 (adding Kimmeridge production) despite saying as recently as April it was being planned.
Lack of cash to proceed with the development and a succession of announcements about commissioning a CPR some hinting this would enable RBL rather than dilutive cash raising.
Lack of predicted cashflow from HH-1 and HH-2z, and further undrilled wells (expecting 2000bopd by end 2019)

But of course certain posters want to 'big up' this Judicial Review', which UKOG clearly believe to have no merits, so that it appears to be the reason for lack of progress and come 19th November presumably bulldozers will arrive on site, except of course this is in the High Court. The decision will be delayed I'm sure, and even if it went against UKOG it's only allowing the case to proceed to Judicial Review.

I'm sure oil companies regularly suffer these annoying legal challenges, but nevertheless continue with their work unabated - why should UKOG be any different.

On the same basis if UKOG thought this was likely to stop oil developments why proceed with obtaining planning permission for Loxley which has continued?

Ocelot,

2 things

Cummings isn't a politician - though he is said to be confrontational.

and assuming buys and sells are more or less equal then only 2.6% 'changed hands'. Trades, buys plus sells totaled 5.2%.

What a delusional afternoon.

0.2p by close (mid of 0.1625) & ''Look how fast it moves on just an informational RNS - yes, both ways......let's just hope the next one also doesn't have any production information in it either - after all UKOG is meant to be a production company but the operational RNS seem to be the troublesome ones.

Pbu continued to avoid sending a convoy of tankers out (how many years has that been 'expected') prior to the court case - so as not to annoy the swampies? - what difference will it make, they'll suddenly find better grounds!

SS playing his cards close to his chest..........maybe he has been delaying production figures for the right time, i.e. Loxley go ahead etc. Maybe, probably not, we're expecting results - not a surprise that's the difference to buying kit, extra HH equity and Turkey.

'A lot of big spenders buying now' - and there has to be a lot of big sellers. Question is who's got it right?

Also the P&D seems to have begun on twitter - can the buying beat the selling?

Cynderlad,

Absolutely right,' there is zero chance of Ms Sarah Finch winning her legal challenge next week', just an opportunity for the posters to fill the board with nonsense rather than discuss the lack of information about HH, and anything detailed about Loxley and Basur.

But it does show the benefit of not revealing operational information, just RNS some BS ('informational RNS') about a legal case that even non-legally qualified posters can see has no merit - but don't expect a judgement immediately after the hearing.

Anyway, Trump, Cummings - could SS make 3?

Troll,

I guess it depends on UKOG managing to keep quiet about HH until then, and not running out of cash.

Still at least it not targeting the same reservoirs as HH - apologies just checked - that should be it is targeting the same reservoirs as HH, appraising an already unsuccessfully appraised discovery.

Luckily they don't need any cash because of the production at HH and no drills coming up. Sorry again, I'm getting forgetful - HH is not producing at the moment and they are committed to drill a well in Turkey and pay 100% of the cost .

Wizard,

as HH1AN2 points out the current SP is about a 14th of the SP at the start of testing Sept / Oct 2018.

But Ripley surely it can't be remotely possible that UKOG has deliberately withheld information about the Kimmeridge since than, when they had about 70% of HHDL already, just to swindle Tellurian and minority shareholders in HHDL, completely crashing the SP?

They've had about 86% of HH since Summer 2019 - if this was a ploy why continue with it since then to save paying the right amount for 14% whilst destroying your own SP.

So perhaps the answer to your question is not difficult to ascertain, nor the ongoing strategy:-

'Is SS a reckless gambler, drunk on his own hubristic dreams and locked in his own Weald basin echo chamber – too far gone to row back, and too proud or too pompous to admit he was wrong, and risk his reputation and record?'

As for Alba why not wait - they probably don't want UKOG shares (and maybe UKOG don't want their equity anyway), and they probably can't find a buyer other than UKOG. Supposedly the Portland is (was at $70 oil) robustly commercial (?) at 140bopd - so there may be a dribble of cash coming to them as long as HH limps on and HHDL stops spending money on further work unless it's proven commercially worthwhile and HHDL do owe them cash - though conversely Alba hasn't paid recent cashcalls.

Wizard,

Whilst UKOG haven't said as much it is almost certain HH-1 is producing water. I don't suppose the $13 per barrel includes the disposal of produced water which appeared to be approximately one barrel for every three of oil in July.

You're right though, it is about time SS delivered a RNS that told investors what is happening now and the near future as well,as a lot more detail about Loxley and Turkey to support the proposed investments.

Please don't suggest I contact UKOG - they don't respond and it's not me obsessed with this $13 OPEX partly achieved by the PW purchase funded with £1.1mm, probably in shares, half before mid January, and the other half before mid July.

Markdods,

whilst interesting an analogy would be wanting details of a championship (or maybe first division) football team and looking at the Premiership League Table, it's still football but has little to do with what you want to know.

This bit is a repeat of the issue that the nearby fields (except E Sadak) are not analogous to Basur / Resan:-

Multiple producing oil fields containing proven recoverable reserves lie to the immediate west and southeast of the license.

I suspect a regional description of Southern England with references to Wytch Farm would have as much relevance to Horse Hill, though even SS likes to mention it.

Wizard

The AME report was June (presumably 2020). Yes they've claimed to be looking internationally when they raise (eg March 2019 £3.5mm) and then spend the money buying more Weald, in that case gave it to Tellurian. But they hadn't saved any cash for this Turkey venture.

After all the BS about the Kimmeridge and money spent drilling, testing and licence buying andclaiming expertise with the learnings from BB apparently Turkey is the answer to the question where shall we drill next.