Member Info for Penguins

Latpulldown,

This is AIM, not BP or Shell, nor is it likely that anything of a competitive advantage would be revealed that isn't already known.

It's already been subject to a CPR review by Xodus in 2018 which was equivocal and they put numbers to it in the November 2018 Corporate Presentation which were possibly misleading as the current GIIP figures for PEDL234 net are less than those in that presentation.

The planning decision, when the well is 'planned' for second half 2021 (which probably means Q4) is irrelevant as even with refusal (and at the previous meeting planners and legal advice was to approve) as an appeal is bound to be successful.

.....and if it's so great why not publish the report rather than just the bare figures that tell nothing about how reliable they are - ie what is the likelihood of the volumes being realised.

UKOG mention the Godley Bridge testing but not that the well was abandoned following failed appraisal wells.

These figures are very similar to the volumes reported in the 2018 Corporate Presentation, with a P50 GIIP of 56BCF vs ‘mid’ of 59BCF, though we now know that figure was the whole structure not just that in PEDL234.

In the 2018 CPR this is what Xodus stated – having declined to calculate the Godley Bridge volumes:-

'The dataset available, therefore, gives significant uncertainty in the assessment of in place volumes, the main issues are:

> 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
> As mapped Alfold-1 is on structure and above the contact
> The precise location of Alfold-1 and its penetration of the Portland is unknown
> The structure does not close at the depth of the contact to the north east

To account for these uncertainties Xodus considered a number of possible scenarios. In all scenarios there was gas bearing reservoir on PEDL234 however, more data is required to properly estimate the in place volumes. Recoverable volumes were not estimated at this time due to the inherent uncertainties.

Xodus believes that a further modern appraisal well and extended test is required to narrow the current uncertainties and enable a better estimation of potential recoverable resources to be undertaken.'

I wonder what has persuaded Xodus to do this work now as UKOG haven’t drilled the appraisal well.

Argus you missed the bit that it was during the period up to 31st March as it was a statement in the Interim Results.

'The Horse Hill-1 well (HH-1) continued producing at high rates of over 300 bopd almost continuously during the period'

We know that the average production during April and May, and almost certainly June, was a lot less than 300bopd, from OGA figures and UKOG's RNS.

oh and about 15 bopd from high OPEX Horndean.

Sting,

Simple maths.

300+ bopd is how much oil UKOG claimed was being produced by HH-1 last time it was mentioned in the Interim Results.

......and the new pump was meant to have added to that:-

'The Horse Hill-1 well (HH-1) continued producing at high rates of over 300 bopd almost continuously during the period. Post period a higher capacity and energy efficient linear rod pump was installed on HH-1, leading to increased production from the Portland interval.'

300 x 7 = 2,100 and each tanker holds about 215bbls.

So assuming even 310 bopd that's 10 tankers a week, over the 6 days tankers are allowed there needs to be 4 days with 2 tankers.

Managing to produce at a level UKOG has claimed HH-1 Portland is capable of is hardly putting the cat amongst the pigeons, though UKOG just producing more or less what they have claimed may be a surprise as the OGA figures far for April and May indicated average production across those months considerably less than 300bopd.

Sting,

They've already drilled and tested extensively the Kimmeridge at HH. They have also had planning permission to drill a sidetrack intended to be into the Kimmeridge for about 18 months.

Whilst the accumulated data will either have given a clear understanding of the Kimmeridge, or more worryingly not, the lack of statements about the Kimmeridge suggests more than an announcement as to the outcome of testing.

They have also had a year since planning permission with conditions was awarded for further w3lls many of which were intended to be Kimmeridge horizontal wells.

The last mention of HH Kimmeridge in RNS was 31 March including this gem:- 'We plan to change HH-1 to a dual Portland and Kimmeridge producer in the coming months'. Well I suppose coming months could mean several years in UKOG speak. But since then the only mention is recompletion and reperforating for Portland production in HH-1.

The Kimmeridge has been mentioned for Arreton and Loxley though the stress for Loxley now is very much on the Portland gas, perhaps because it will likely be the next drill, of course they are still also peddling the Kimmeridge at Arreton probably on the technical basis of 'the grass is greener' ie it's not in the Weald.

Argus,

it might have made no difference at Hurricane, but because he hasn't bought any shares we shall never know if SS would have been more protective of the SP if he had 'skin in the game', as far as I can see he has pursued the principal of never exploring using your own money, in his case not even a few thousand of it, more like being paid well over £1mm while doing it over 5 years. Perhaps he might have abandoned testing at BB earlier, not installed a 'production completion' before properly testing there, maybe not bought the BB licence until there was a proper understanding of the Kimmeridge, not wasted time/money on Prospect M, and not bothered with Arreton and hurried up development of HH spending money where they actually had flowing oil - or are you inferring HH is now dead?

Strangely considering you point out that the prime consideration is the geology I see very few posts actually considering 'the geology' from a certain band of posters who concentrate on the SP movement, oil price or attacking other posters based on a fantasy narrative that they are 'xr' or 'swampies'.

on that point...........Tymers,

How many of your posts are almost exactly the same whining on and on about XR, deramps, trolls - with some weird cult of looking and seeing - unfortunately looking and seeing isn't enough - understanding seemingly what you're missing out on.

How's your prediction made on 29 August going:- '1.5p sep 23rd 2020' half way there.......

Argus,

I'm sure it wasn't your intention but you've pointed out the directors of Hurricane will have also suffered losses from their shareholding, something that SS certainly won't be feeling having trashed the SP after ramping it to over 10p (98% down, Hurricane over 60p to just under 3p 95% down)

and also a reminder that expert and company opinion can be wrong (as well as CPR if you bother to get one) - eg 720 to 1080bopd for a horizontal in the Portland. I wonder how the Portland 45% recovery (with injection, down to 8% without), 11-14mmbbls connected oil or 1mmbbls EUR per Kimmeridge well are going? Maybe the 362 bopd initial stable rate from the Portland in HH-1 might just be achievable.

and also a reminder that SS is overpaid unless trashing the SP was one of the KPI?

and also a reminder he's splashed the cash (or convertible shares etc) buying up the Weald for the Kimmeridge that funnily enough no one else wanted, and is now practically unmentionable.

Interesting looking at the 2019 results 'PRINCIPAL RISKS AND UNCERTAINTIES' (worth a look) the only one that was 'magnitude - high', 'Likelihood - low' was loss of key staff......I'll leave that as a thought though magnitude high is a bit presumptuous.

I wrote this reply to Shanjo earlier - but wasn't going to post it, might have helped!

Shanjo,

'Why don't they cap the horizontal part of the HH2Z well with its water issue's'

If it was that simple even UKOG might have done that by now.

The HH-2 pilot (vertical through the Portland) will have been plugged below the kick off point for the horizontal. From the 30 June RNS it's clear the logging performed during the early 2020 workover didn't identify the fractures they think are now producing water that are nearer the heel. They (obviously) couldn't identify where exactly these were previously so to review the well they will need a CT Unit or workover rig. If the fractures are very near the heel there may not be any hole left in the sweet spot after remedial works - which contributes, according to UKOG the lion's share of production from the Portland, nor can they be sure the remedial works will be successful - after the previous 'successful' operation SS was more circumspect about the chances of success of this 'routine opertion' than he was before the event:- 'However, success, particularly in horizontal wellbores and where water ingress is via open natural fractures, is by no means guaranteed.'

Bringing in a CT Unit or rig isn't cheap and may only confirm nothing can be done with HH-2z and / or remedial works may fail. Converting the well to water injection will be a risky option, with the very real possibility of opening up a pathway for water to HH-1, killing off the only (significant) source of income.

It's been 10 weeks since the last technical RNS mentioning Horse Hill, UKOG's 'flagship' where they admitted the failure of HH-2z, and that was kept from the market for a while judging by the waste tankers that were seen prior to that.

It's about time UKOG released some information about their forward plans for HH-2z and the current production from HH-1, and whether they will execute their proposed workover of HH-1 'in summer' and the anticipated improvement in production from HH-1 resulting from the reperforation and recompletion, they will (unless they are totally incompetent) have estimates for this against which the degree of success or otherwise, of further work on HH-1, can be measured rather than 'a further improvement in flow' mentioned in the 30 June RNS.

Waiting until January 2021 to find out what UKOG is currently producing daily, and then only as an average over the month, is not good enough - what a production company produces and expects to produce is the number one statistic investors need to know.

It would also save a lot of guessing games on this board and twitter.

HH-1 is to all intents vertical in the Portland. The directional bit was below the Portland.

https://ukogl.org.uk/map/php/well_deviation_survey.php?wellId=3041

Without the directional survey for HH-2z the distance from the heel to HH-1 is a matter of conjecture although the diagram in the November 2018 Corporate Presentation shows a pretty rapid deviation to the horizontal (slide 11)- there is also an illustration of the HH-1 deviation if you can't understand a deviation survey (slide 9)

Two trades within seconds of each other. Surely a transfer or rollover?

Did the price move would be more of an indication as to whether they were 'real' buys.

Spread was 0.204p to 0.212p before and after.

Troll,

Invest and wait.......for the next dilution?

UKOG have said the 2020 cash raisings were for paying off the YA CLN and some cash (plus shares) to PW for the first instalment of the equipment purchase, which has happened, and for future work of; site works at Loxley, work on Arreton planning and reperforation and recompletion of HH-1. So any drilling to prove (or disprove) Loxley, IOW or Resan will require further cash raising. It was over 3 months ago these plans were outlined so whether there's enough left even for all the proposed work described isn't known.

It would be helpful if UKOG would issue an update to either the November 2018 Corporate Presentation or the 2019-2020 Strategy and Drilling Plans, both of which make extraordinary reading in terms of failure to deliver which is why, perhaps, not everyone expects every action by UKOG to be as planned, or successful.

Shanjo,

The last time Argus told us about the OP it was aroung $44, what happened, why are you telling us it dropped?

Tymers

'turning an exploration into production company is no mean feat and the additional licence inc percentages owned set the foundations for Ukogs next stage of development'

But since the change from investment company to operating company nothing much has changed in terms of production. HH-1 was already drillled. UKOG bought 35% direct interest in HH the remainder still sits in HHDL, a subsidiary that operates.

The only 'positive' of high equities (so important until Turkey) is the expenditure (sorry 'investment') is funded mostly by UKOG, the rewards are still awaited for the £70mm in shares issued so far by UKOG to pay for additional equities, 3 wells including testing and of course running the company for 5 years, including salaries.

Mirasol,

I'm not even sure fraccing would be the answer anyway below the 'legal' depth. The whole idea is to make fractures in the matrix and then 'prop' them open. Injecting at high pressure into an already established fracture system could just sweep the oil away and then deposit loads of proppant in the natural fractures, which would then create a similar problem to one of those UKOG claimed was a possible issue with BB.

Howard joined the board in March 2017. It's hard to detect if he has brought anything to UKOGs progress with developing the Kimmeridge as he was in place throughout BB drilling and testing. As the main outcome at BB was UKOG needed to try out something different elsewhere despite testing for about 9 months and drilling a sidetrack you would have hoped that his input and knowledge during the testing and drilling would have lead to UKOG trying out these different approaches at BB and perhaps stopping SS making statements in RNS that were not born out by testing.

Perhaps this 'expertise' is why they have ended up in Turkey with a fractured carbonate play. At least they aren't operating.

More likely 'pressure build up test' sounds better than 'we've shut in HH-2z while we work out what we're going to do with it and / or saving up our pennies to pay for it.

With presumably higher pressure water ingress I wonder what value a pressure build up test would have anyway.

I wonder if those that keep boasting about the number of posters they have filtered have also found a way of filtering out the SP and any information the company puts out - it certainly explains the content of their posts.

Tony,

are you sure UKOG aren't complicit in the whole delaying process. At HH they haven't submitted all the information required for the development planning conditions, and they submitted a further document in August for Loxley which would need consideration ie delay.

Means they can 'reallocate' the money 'reserved' for preparing the site (rather then finding another excuse) until they raise for Turkey. Only an opinion but I suspect that like the Portland has supplanted the Kimmeridge (last mention?) Turkey will supplant the Weald/HH - maybe the new shiny (50%) flagship. Funny how control was a selling point until it isn't.

UKOG submitted another document in August addressing the 'concerns' from the 29 June meeting which has just appeared (2 September) in the attachments section of the planning.

Possibly that has meant the 17 September meeting is too soon.

In a previous post I looked at the RNS total production figures from HH. From 28 April to 29 June these were over 100,000bbls to 113,143bbls.

How much over 100,000bbls is unknown but assuming about 13,000bbls were produced in May and June is probably going to be near enough (though the comparable figures for April suggested around 4000bbls and OGA declared production was around 7000bbls).

If about 5,500bbls were produced in May that leaves around 7,500bbls for June or around 250bopd.

We shall see.

Mirasol, we know there are fractures in the Portland and water breakthrough can be sudden and catastrophic from a fracture system. Unfortunately water reporting to the OGA makes no distinction between native water and any other water coming out of a field. It does seem a lot of kill fluid but they seem to be working over the well fairly often so it may be more than one 'kill'. I would have hoped (note hoped not expected) that UKOG would have come clean in the 30 June RNS if there was significant water being produced from HH-1. As they seem to be performing workovers on HH-1 regularly it may be a while before for a month without them to see what true production is of both oil and water unless UKOG uncharacteristically release some actual daily figures (and not just after shut in) over a period of time.

Has anything been done to HH-2z, almost anything would require a rig or CT unit - if not would water disposal eat up any revenue - unfortunately UKOG forgot to mention what the ratio of water to oil was when the HH-2z fix failed (which probably means it was terrible).

Has the gas to wire generator been installed (or hooked up) whiich was on going to be ordered in December after the £2mm placing, if not when the flare isn't running there is no production (or testing unless it's 100% water from HH-2z). But if gas to wire had been installed would it not be likely that any gas from HH-2z would also be put through the generator (4 were needed for 3500bopd)?

If no generator why is HH-1 being shut in - if there is a generator why flare.

Based on RNS figures a maximum of just over 13,000bbls was produced over 60 days, 58 of them in May and June - thats an average of less than 225bopd or at 300bopd only producing for 75% of the time (45 days). Whilst it took a couple of days to install a new pump ('a higher capacity and energy efficient linear rod pump was installed on HH-1, leading to increased production from the Portland') they forgot to mention what the increased production was.

The suspicion (as usual) is that sparse, imprecise (or no) information = bad news.

Tymers,

I wonder how much that will be wrong by?

I don't do the 'guess the SP' game as it just seems a way for rampers to clutter up the board (although consistently the resulting SP has been at best in the lowest quartile, more likely decile) preventing proper discussion about what's actually happening.

Mr analytical rarely gets even the direction of movement right (and then only very short term - hours or a day or so) let alone the actual price. Based on previous performance where Tymers guess was about 8 times the actual price at end 2019 1.5p doesn't bode well (0.1875p is an eigth) - which will be closer?

But apparently SS has everything under control - if that was the case where's all those wells that were going to be drilled, tankers leaving the site, the CPR, the 2 to 3 times oil flow from a horizontal shareholder value.

E&P doesn't work like that, or perhaps take the latest deramper's word for it (first post today at 7:48, though not the one I'm quoting from) that 'exploration for oil is not without risk' - add in appraisal and it should be in capital letters before any of Steve's homilies at the end of RNS.

Ocelot

Alba are merely paraphrasing what was in the interim report 30/06 - 8 weeks on still no decision, or more likely UKOG are not prepared to disclose what they will do with HH-2z (presumably because it's fantastic news - see:- exploration (and appraisal) is not without risk).

It will be interesting to see the production figures for May and June and compare to what UKOG have released in RNS.

31/3 Around 96,000bbls produced from HH
28/4 Over 100,000bbls produced from HH
30/6 113,143bbls produced up to 29 June from HH

The OGA April figure for HH-1 Portland was about 243 bopd or about 7300bbls which suggests 'around' and 'over' are very loose terms. As anything near the quoted figures would suggest only 4000bbls produced.

However the precise figure for 29 June minus 100,000 gives 13,000 bbls produced which for 60 days averages 216bopd - somewhat less than the over 300bbls continuous production in the period up to 31/03 mentioned in the Interim results:- 'The Horse Hill-1 well (HH-1) continued producing at high rates of over 300 bopd almost continuously during the period. Post period a higher capacity and energy efficient linear rod pump was installed on HH-1, leading to increased production from the Portland interval. As of 29 June 2020, 113,143 bbl in total has been produced from Horse Hill'

and that production is after the high capacity pump had been fitted, and assumes the 'over 100,000' wasn't much more. Let's see what the May production figures bring, though high production in May would mean lower production in June unless UKOG got their figures seriously wrong, ho hum.

Some see, some look, some analyse.