Member Info for Penguins

What is the point of counting tankers when UKOG have said that HH-1 is producing a stble 'more than 300bopd' - probably no more than 310bopd as if it was lots more I suspect we would have been told. The count is also inflated by all those waste tankers we were told by certain posters were full of oil, that we now find out, as suspected, to be carrying waste.

Even when they reperforate and reconfigure the completion chances are that this will only 'further improve the oil production rate' - 'if successful' doesn't sound like a slam dunk gusher.

whilst the Loxley planning was a good excuse for a P&D I suspect a lot of holders would prefer that it remained rejected so UKOG were made to concentrate on a known producing field rather that a large step out to an undeveloped gas discovery, even if successful monetising gas will not be cheap and the new 'green claim' of natural gas to hydrogen will surely require significant plant on site?

There were two different mentions of future funding in the RNS - one sounded much more likely than the other - you choose:-

'The OGA consent also enables us, at the right time, to allocate net recoverable reserves to the Company, a pre-requisite for future potential debt-based funding when oil prices return to better levels.'

'However, it is our view that, particularly in these financially uncertain times, raising funds from equity remains the most prudent and only feasible way to fund projects that can add substantive growth in the asset value of the company.'

As for this bit of tosh:-

'Had oil prices remained at their healthy pre-Covid levels, this would have been a different story, as with our current low $13/bbl operating costs, the Company would have been able to consolidate a heathy cash position, plus debt funding would be a reality.'

So why wasn't a CPR commissioned ages ago if debt funding would be possible with just HH-1 producing in anticipation of the FDP approval - ie pre covid and low OP?

There was a pump that can be used for water injection in FOTH's video of 11 June - from 44 seconds in.

https://twitter.com/Adrianwfire/status/1271124049029201922

Seems they've been doing more than thinking about it - though who knows with UKOG, maybe they hired it for fun. Not sure there's much else you would do with that beast on a well site. Here's a link to a schlumberger about that type of pump:-

https://www.slb.com/completions/artificial-lift/horizontal-surface-pumps

They list the uses which includes water injection.

Troll,

It's a debt, as in this thread - it is going to have to be paid. Just because it will be for something the cash and shares will need to be found / created. At 362 bopd the saving of $4 a barrel will take nearly 4 years to recover the outlay, and servicing/ breakdowns will be a cost. Wouldn't it be better to use the money, however it is come by, to put towards drilling a well at HH rather than buy some kit just so UKOG can boast about it's low asset level OPEX (whatever that ring fences). Presumably half of it is just sitting around doing nothing while HH-2z is shut in.

I do wish posters would stop claiming UKOG was debt free- they are not debt free as they have agreed to buy the second hand production kit off PW for £1.65mm in shares and / or cash, none of this has been paid yet.

UKOG will almost certainly have to borrow more to progress any drilling even with further improved flow rates when UKOG get round to reperforating HH. Whatever happened to UKOGs favourite - 'significantly more' as in the 'horizontal will flow significantly more than the vertical?

Even now UKOG avoided stating precisely what the current production is from HH--1 so what improvement there was from replacing the pump is an unknown, which from UKOGs past performance suggests not much. There was a prediction that the initial stable flow rate from HH-1 would be 362bopd, that may be a target for the post perforation flow rate.

Sting

I know you are convinced that UKOG are executing a cunning plan regarding the Kimmeridge but it was commingling the KL3 and KL4 not commingling the Portland and Kimmeridge that has previously been mentioned . To flow both Portland and Kimmeridge requires a separately controllable pump at each level - 'dual completion'. UKOG didn't mention the Kimmeridge at all with regard to HH in the last 2 RNS with operational content.

That accolade has moved on to IOW and Loxley,

Troll,

OK, once Loxley planning is sorted then................

.......there's the small matter of finding the cash, then drilling the well, and finding gas.

Just because Godley Bridge 1 (1982) was a discovery (which was never developed) the 2 subsequent wells in 1986 - one an appraisal GB-2/2z (yes they had two unsuccessful goes at finding the prospect from a site ), the other (unsuccessful) the well at Alford (to the south east of Loxley) - doesn't mean success is guaranteed, in the 2018 CPR Xodus wouldn't use UKOG's mapping to calculate contingent resources because of 'issues' with it.

So by no means a slam dunk

As for HH-3 - where's the cash coming from for any drilling this year, and it sounds like any further drilling will be more risky than is should be for a 'field'. As I've posted previously the fact they have purchased the surface equipment suggests the current production set-up is going to be in place for a while.

You also seem to think that there will be an approx 60% production increase based on......'further improve flow into the wellbore'. As the calculated initial stable rate likely from HH-1 was 362bopd that might be nearer the target production figure.

You also posted 'So from this since the down hole pump is below the Portland we must assume that is for the Kimmeridge!.... commingling still in plan.

No it isn't - commingled was how they planned to produce the Kimmeridge (28/04 RNS:-'include interventions to add commingled Kimmeridge oil flow')- they can't produce the Portland and Kimmeridge using a single pump.

It's unfortunate a CPR has been kicked (yet again) into long grass so no information about current flow rates or estimates of future rates - is current 'more than 300bopd going to last 3 months, 6 months, a year etc.

btw:- not sure whether UKOG just mean HH-1 Portland which was only moved to Portland testing and then production on about 13 March 'which has been in stable production of over 300 barrels of oil per day (bopd) for most of the reporting period', as from end September 2019 (68,773) to March 2020 (96,000bbls) production was about 27,300bbls or an average about 150bopd.

Nomlungu,

'Have UKOG stated to the council that Horse Hill is sub-commercial?'

I've always assumed specific to the Kimmeridge - yes - and for Broadford Bridge as well (Page 22 of 47 of the planning application:- 'Flow tests and pressure data from the Broadford Bridge and Horse Hill Wells Sites have been sub-commercial which is why the ‘potential means of recovery’ needs to be tested at Loxley'

Dean - hopeful,

CPR required and a bank probably won't lend against a single well's production/reserves when there is risk that the well may be screwed up during workovers, or may just decline rapidly regardless of what's in a CPR.

and you're not at all suspicious that they haven't actually stated what the 'increased production' is from HH-1 following the new pump - they should have a figure by now - my guess is not a lot more than 300bopd?

UKOG tend to be vague when they want to hide stuff.

UKOG BOD didn't give themselves the luxury of authority to issue 3 billion shares (when they knew what was going on although we weren't told) just to go and get a bank loan.

They also have to issue PW with £275,000 worth of shares yet + £275,000, and any chance of the remaining £1.1mm being paid in cash has just disappeared.

Funnily enough on 8 June I posted:- 'the reason for renting is the ability to shed equipment when it's no longer needed. Is this admitting that this is 'the development'

seems that's the case for the time being.

at (say) 400bopd it's going to take a long time (3 years) for the OPEX saving to be realised - but as the pi paid for it who cares.

I would like to apologise for not being more robust in responding to various posters who have continually claimed that my point of view was deramping rather than, as I have repeatedly stated, reality.

Those posters who have claimed the silence was because SS had a plan and the next operational RNS would see a fantastic rise in SP
Those posters who insisted the waste tankers were always full of oil (until it was proved otherwise recently)
Those posters who insisted flow rates were 4 or 5 tankers a day because the 'eyes' weren't always there
Those posters who use figures that come from RNS and statements prior to the HH-2/2z wells
Those posters that keep suggesting that HH-1 was recently producing from the Kimmeridge or even dual completion when this would be a major workover of the well.
Those posters who don't understand the differences between contacted oil, OIP, resources, reserves and recoverable oil when quoting their 'valuations'.
Those posters who forget cash is king with a company whose source of cashflow is primarily not from production but CLN and placings

Enough *****ing, where's the mention of dual completion or any Kimmeridge plans at HH? The only mention of Kimmeridge is testing it on IOW - a test of an already tested prospect that had oil shows but no flow from the Portland so has guaranteed oil shows to excite the punters.

As to the future UKOG already has the water injection pump on site but injecting into a fractured reservoir can have unintended consequences eg finding a pathway to HH-1, as for more wells - impossible to know where water filled fractures might be so no simple way of raising production that way without risk.

As for Loxley, the planners did UKOG a favour (if not the p&d), this is a well where SS stated about the prospect:-
..........whose extent is determined by 3 legacy wells..........

Those 3 wells consist of the discovery well (Godley Bridge-1), a failed step out appraisal well and sidetrack that failed and the Alford well which also failed. So their mapping is driven by where the prospect isn't. Xodus wouldn't even calculate contingent resources from UKOGs mapping.

Rudey,

the planning inspectorate is the only method for appealing a planning decision, and therefore the route Egdon took in appealing Wressle.

'Egdon Resources plc (AIM:EDR) is pleased to advise that on 1 February 2019 it submitted to the Planning Inspectorate an appeal against the refusal of planning consent for the development of the Wressle oil field by North Lincolnshire Council's (the "Council") Planning Committee on 28 November 2018.'

Fascinating,

They knew the 3ngine was going to fail so they decided to stop drilling the pilot hole and started drilling the horizontal waiting for it to fail. If they were aware of an engine problem the time to do repairs would have been between the pilot and horizontal drilling.

I think they were running out of money and needed to get HH-2z on test as soon as possible at lowest cost possible to generate some cash. Having completed the well ready for testing late November they did a placing 2 December, then silence until 23 December when they announce the water ingress issue.

Was there an indication when the well was completed for testing that there was a problem with the well which is why they did a placing?

No,

If it goes in full it means the load has been rejected for some reason at the terminal and needs to be passed through the separator again, the tanker can then leave full.

The driver of one of the tankers tweeted to take note of the wheels today which was a big hint.

I see there are attempts to helpfully 'explain' why a simple explanation is wrong as it doesn't suit their agenda. The second tanker was definitely a tanker that can carry waste. I think we can all understand why an HGV would have all,wheels down though.

Ibug,

PW is still to come. They don't issue warrants that have to be paid for when paying off a debt.

2019 the £3.5mm placing had in the Placing Agreement section an additional sentence:- 'WH Ireland is granted standard placing commissions and broker warrant over ordinary shares.' and the only warrants issued in 2018/2019 were exactly 5% (16,666,666) of the number of shares issued in that placing. Those warrants were the only outstanding warrants at end September 2019 (so not historic) - can't find any trace of them being exercised since. I wonder if the 16,666,666 were issued with an exercise price at the same price as the placing (1.05p) - oops maybe WHI were a bit greedy and never got round to selling

The 129,375,000 shares is a little under 5% of the total shares of both recent placings - and the 0.2p exercise price is a bit of a coincidence considering the PW price was going to be decided by VWAP.

Bamps,

I think you'll find it'virgin' means the reservoir in HH-2z was nearly the same pressure as HH-1 was when it was originally drilled - virgin meaning untouched, unchanged.

The pressure in the Portland is at about hydrostatic pressure so neither over or under pressured.

BTW - 'Federal Oil Conservation Board: Public Hearing, May 27, 1926'

I think things might have moved on since 1926 - but interesting nevertheless - but I've not read it in detail.

The comparison was an experimental comparison between oil at the surface (with no dissolved gas) which had higher viscosity (ie poorer flow) than oil in the reservoir with dissolved gas at 'virgin' pressure. Again 'virgin' is reference to the 'untouched' unproduced reservoir.

ooops,

actually 140 cu ft not cu metres - too many Ammericanisms in the oil business - they never got into metric measurements.

'The missing volume is the compressed dissolved gas which at surface becomes about 140 cu ft for every barrel of oil produced (in the Portland). They currently burn this off.'

Bamps,

'This term is generally used for gas saturation of oil. It makes the oil far more fluid and studies have shown upto 96% of the oil pool can be retrieved-Wow!

really?

Near virgin pressure just means that production from the Portland in HH-1 has only reduced the pressure a little. Absolutely nothing to do with the gas saturation of oil - nor will it mean 96% of the oil will be produced.

And:- 'The pressures at 2,000' depth 1 cu ft of oil would be the equivalent of 27 cu ft at normal atmospheric pressures.'

Oil like water is, to all intents and purposes, incompressible at 2000ft (though temperature is another factor), but the Portland oil at HH has some gas dissolved in it - this means that at the surface the volume of oil is about 93% of the volume of oil in the reservoir (Formation Volume Factor of 1.07) so 100bbls in the reservoir is about 93bbls at the surface (not 2,700). The missing volume is the compressed dissolved gas which at surface becomes about 140 cu metres for every barrel of oil produced (in the Portland). They currently burn this off.

The figures I've used are from the September 2019 'HORSE HILL OIL FIELD GEOLOGICAL DESCRIPTION' which is a report submitted to the EA.

Ethio,

I think maybe the reverse.

They could save shelling out £258,750 until the SP was 1p, why exercise warrants before they want to sell them, what would be the point with a share that doesn't pay dividends. Exercising them now means they've forward sold them now - maybe the 103,000,000 share trade was theirs?

Next up PW Well Testing's £275,000 worth of shares?

Anything but an operational RNS - you would think with things going so fabulously well at HH they could find something to tell the market?

Don't get too excited aren't the 'conditions' you quote just plans included in planning application?

The plannin application is very likely to be passed with conditions. Below are the conditions recommended by the planners required to be discharged prior to the commencement of the work as in the planning pack.

IMPORTANT - CONDITION NOs 9, 13, 14, 22, 25, 27, 30 and 31 MUST BE DISCHARGED PRIOR TO THE COMMENCEMENT OF THE DEVELOPMENT

9. Prior to the commencement of the development hereby permitted, a Transport Management Plan, in accordance with the submitted Framework Construction Transport Management Plan (dated September 2019), shall be submitted to and approved in writing by the County Planning Authority

13. Prior to the commencement of the development hereby permitted, a scheme of noise mitigation shall be submitted to and approved in writing

14. Prior to the commencement of the development hereby permitted, a noise monitoring plan (NMP) shall be submitted to and approved in writing

22. Prior to the commencement of the development hereby permitted, details of the design of a surface water drainage scheme shall be submitted to and approved

25. Prior to the commencement of the development hereby permitted, a Construction Environment Management Plan (CEMP) shall be submitted t

27. Prior to the commencement of the development hereby permitted, a Pre-development
Baseline Geochemical Testing Report shall be submitted

30. Prior to the commencement of the development hereby permitted, an initial
Landscape, Environment and Biodiversity Restoration and Enhancement Plan

31. Prior to the commencement of the development hereby permitted, a programme of archaeological work in accordance with a Written Scheme of Investigation shall be submitted to and approved

Egg on face?

Perhaps you can't read:-

'So maybe (at least) one tanker was water........it could have come from somewhere else in the Weald but it has got a 1267 plate.'

I think that's 'not testifying to the origin'

As for not posting, with hundreds of posts what's the point. I happened to see N66's post and thought it was worth a comment. It's certainly got a more interesting response than 'the price is'.

Pboo,

I'm well aware of the different types of tankers and my post was specific to the tweet which was yesterday. The problem is that not everybody is even aware that some of the tankers coming out og HH are waste tankers and 'could' be carrying either waste contaminated with oil or just oil. If the waste tanker goes to hamble it isn't waste, but as you point out today it wasn't a waste tanker.

Your argument has always been if they had 1267 plates they must be full of oil... the picture tweeted by N66 seems to say that's not true.

Matt,

Of course it's at a different site, UKOG can't dispose of water at Horse Hill. That's why the accompanying tweet says - back in then [sic] yard ready for disposal'.

But I accept (and said) I don't know where it came from, although johnrogan tweeted about N66 being 'at lunch', it doesn't detract from the fact it has 1267 plates

only waste tankers with oil in have 1267 hazard plates?

https://mobile.twitter.com/N66BKP/status/1275452937364332544

Yesterday, when there were 4 tankers: and johnrogan9 mentioned N66 was around this is what N66 tweeted - 'One load of production water back in then yard ready for disposal.'

So maybe (at least) one tanker was water........it could have come from somewhere else in the Weald but it has got a 1267 plate.

Beware just the mention of a 'tanker', and it seems a 1267 plate on it means nothing.

UKOG have yet to RNS what's happening at HH at the moment so as yet nothing to indicate there is any foundation to this rise.

But well done to those making money, especially those that sold first thing, to those still waiting to break even work out what you'd be happy with vs 0.2p. Don't be left thinking I wish I had sold at........?......like those that held through the spikes in 2017 believing the posts, and tweets, saying it would go higher and/or the classic 'just added some myself' (meaning I'm about to add to the sells so please keep buying so the price doesn't go down) and then disappearing off to the next fantastic opportunity to repeat the same posts with a different ticker