Member Info for Penguins

R,

Apologies for using 38+ for the tankers, I got 38 in my head from your post, and it should be 37 tankers videod and photographed.

Using my tablet rather than dual screens.

R,

Really, 38 tankers, what days?

My tally from twitter was about 19 - there's uncertainty at the start and finish as to when the oil being exported was produced and what they are storing, and imo some were waste tankers, giving a few missed.

So you think they are massively understating aggregate production. UKOG's 'over' a round number are usually a small number, but we shall see.

Btw, Lee is 'not on my side', and maybe he's not on yours either. Putting things like that in your posts diminishes you. If you want to discuss UKOG that's fine. If you want to discuss motives how come you now say there were 38+ tankers video'd when they are not in your twitter feed.

So the only 2 things they say about flow from HH are unclear, one in your opinion one in mine.

Tymers

So what risk do you put on just getting your money back (0% reward) in your example and why?

1,000,000 x 2.5p = £25,000 + 2,000,000 × 0.25p = £5,000 = £30,000

3,000,000 × 1p = £30,000

R,

Not sure about this question:- 'why do you not use the latest UKOG figures rather than making up your own reference numbers'.

The only 'UKOG' numbers I can see in my posting today was 300+bopd and 4000bbls produced between 31/3 and 28/4.

RNS 28/04:- ‘Further to the Oil and Gas Authority's March 2020 grant of long-term production consent at Horse Hill (UKOG 85.635% controlling interest), which has now produced over 100,000 barrels ("bbl") of dry oil’

and that's the latest operational RNS.

CEO’s Statement RNS 31/03:- ‘Following successful extended well testing (EWT), around 96,000 barrels (bbl) of Brent-quality crude oil have been produced to date from the Portland and Kimmeridge oil pools via HH-1 and HH-2z’

100,000 minus 96,000 is 4,000bbls

May not, like most UKOG statements, be very precise but ‘around 96.000 to over 100,000 is in terms of an imprecise 300+bbls stated by UKOG is about 4000bbls produced between those pronouncements – presumably the latest figures for some time just before these 7:00 am RNS.

Hopefully UKOG will at some point release specific information about flow rates from HH-1 and HH-2z as it seems odd that they would only give a flow that was just from HH-1 when they are also flowing HH-2z, but you're entitled to your view of the wording, as I am to mine.

R,

I'll leave you to keep repeating stuff about surface equipment - apparently asking a poster to elaborate more precisely what they mean when they say 'Production kit to be installed in HH1' isn't allowed.

Even if you had come back and said equipment for the continued production of HH-1 (which you are mnow saying which is more general that would be fair enough - after all you are saying only HH-1 is producing (or maybe not).

,HH1 is the only Production well, so the 300 bopd does not include HH2z, which is in EWT and therefore not in production.

But then (waffle apparently) UKOG use the word 'flow' not production.

'Consequently, with daily flow rates from production start at Horse Hill averaging over 300 barrels of dry oil per day'

So are you like Rodders inferring that UKOG are not including the oil from HH-2z in the flow figure from when they started production? That wouldn't be vague - but then that begs the question how much of the 4000bbls between 31/3 and 28/4 was from HH-1 and how much from HH-2z - and why not tell?

We shall see.

I'm off out for an exercise walk anyway - unfortunately breaking covid 'rules' is not my thing so I'll leave that to those living nearby.

R

Busy responding to a troll.

I see you have replied that kit lying around the site is to be installed in HH-1. You know this?

As UKOG state the well was in production at the end of March I'll go with that.

As for waffle I realise givingmreasons for opinions Is not high on a lot of posters lists but it explains why I think that, you obviously think otherwise. So we shall have to wait to see if your understanding of the 'flow' is right and UKOG lied that the test production from HH-2z was underway at the end of March. I'll go with what UKOG said.

R,

So what exactly do you mean by production kit being installed in HH-1. They were performing yet another workover this week on HH-1, what makes you think that HH-1 isn't producing. UKOG stated in the 31 March RNS:-

'Production has now commenced from the Portland oil pool via Horse Hill-1 (HH-1) along with continued test production from HH-2z.'

So what's missing that needs to be installed for 'Production' from HH-1?

Were UKOG being deliberately vague about the 300+bopd, allowing multiple interpretations rather than saying where the flow was coming from as according to the excerpt from the RNS above both wells were being flowed.

Sign off by SCC could be any time and dual completion still some time in the future but more tankers than what? Despite continually being told tankers were being missed comparing the tankers 'seen' vs the approx 4000bbls (19 oil tankers) UKOG say was produced between 31/3 and 28/4 comes to about the same number, at most one or two missed.

So increasing from 3 tankers every other day. But some posters were claiming HH-2z alone would be producing 600 to 1200 bopd during the test.

If anything daily counts vs UKOGs oil produced and the atgverage flow rate confirms that UKOG are not exporting the oil as it's produced but often storing enough for several tankers in one day. Maybe it's cheaper to hire tankers for 2 trips or the 3 different tankers come as buy 2 get one free! Or maybe the flows are so erratic or require shut ins and workovers regular export is not possible. 4000bbls produced in 28 days, but an average of 300+bopd says only half the days (13 or 14) were flowing.

They should be on the steady state ewt as that was what was planned after clean up - obviously they are not

H1AN2,

you have no idea what rate HH-1 is producing oil at. Only this week the pump on HH-1 was removed and the flare was still flaring so the average of 300+bopd quoted by the company is more likely to be from both wells.

They have a planning application for one other site in the Weald, they do not have many other sites in the weald to investigate overtime...'

As for planning UKOG have been unable to get their applications in on their own schedule - and if you and I know it's a slow process then UKOG should get the applications in ASAP.

You are making all sorts of statements that are guesses or just wrong - UKOG has never said they let the rig go elsewhere.

It would be impossible to predict exactly where there might be water filled fractures - though their existence could have been anticipated and UKOG could have been better prepared.

They ewt of HH-2z has been underway since the end of March the CEO's (that's SS) statement in the Final Results (31/3/2020:-

'Production has now commenced from the Portland oil pool via Horse Hill-1 (HH-1) along with continued test production from HH-2z.'

So UKOG may not be prepared to tell us how it's going but It doesn't seem to 'be delayed again be the covid 19 virus'

Unfortunately something that many posters seemed to not understand is that things don't work like clockwork in O&G E&P. Making any claims about future success are always more likely to be wrong than future failure.

Tymers,

SCC 2020 to 2021 budget is £902,000,000.

From a letter to the local MP at BB SS gave details of the scheme:-
'UKOG is committed to pay 6% of gross revenues to the locality (including business rates to West Sussex County Council and a direct payment to the local community). We are in discussions with the industry advisory body, UK Onshore Oil & Gas (UKOOG) and HMRC to finalise the mechanics of this scheme.'

Presumably this will be the same for Surrey.

So gross revenues - until production levels and oil price are known it could be a very variable feast though business rates are deducted and the payment is all to, or SCC share it with, the local community.

Lets go crazy and assume about 1.1mmbbls produced in year one and the OP is $70 = 6% equals approximately £3.7mm or assuming it all went to SCC about 0.4% of their annual budget - but not sure what year they might achieve 1.1mmbbls (an average of 3013bopd - reflecting the depletion illustrated by the maximum tanker export permission, using the maximums for the whole period), or what the production would be the following year etc.

So welcome I'm sure, but hardly fundamental to the SCC revenues.

But of course there's going to be 8 Kimmeridge sites across the licence area with 25 years of production - a plan based on one well that was tested for a few days in 2016, what could go wrong?

Tymers,

do you think UKOG sells it's oil in the futures market. I thought they got spot. There's no guarantee when they reach that future that will be the price - I suspect the futures price for delivery today was somewhat more than today's 'spot' price.

RNS 18/07/2018:- 'Oil produced from the EWT will be sold on the "spot" oil market...…...'

One other thing that posters forget when comparing what companies may get paid for their oil vs OPEX is hedging which but UKOG with unpredictable production cannot indulge in.

You predicted right Oktane.

the OPEX costs are hoped for, not actual very restricted (ie asset and field costs only related to production) and will always depend on volumes achieved and market prices - and purchased equipment depreciates and needs replacing.

…….and not allowing for the costs of the company you are actually invested in rather than a subsidiary is also a huge omission, more wells don't come free RBLs have to be repaid and placings and CLNs dilute. You can't calculate higher production based on the same figure if those wells costs achieving it need to be repaid.

according to UKOG they will never produce 3,500 bopd for a year, that number is related to a maximum number of tankers in a 4 month period.

The Kimmeridge which accounted for 4 of the horizontal wells contributing to that 3,500bopd and any other volumes had, at the time of the planning application scoping document which had the development plans in it, only been tested in 2016 for a very short period (albeit at high rates). So planning for 4 horizontal Kimmeridge wells based on extremely sparse data was to say the least exceptionally optimistic. Little detail of the subsequent testing of the Kimmeridge has been released but on the basis of actions speak louder than words things seem to have changed.

so producing a cash flow forecast based on flows up to an annual volume the company doesn't expect, on wells that haven't been drilled on the basis of a CPR that doesn't yet exist is somewhat pie in the sky - ie meaningless.

as for asset level and field level OPEX including payroll costs - yes maybe for site employees but don't try and infer that the UKOG BOD costs are in there or all their staff working on other projects - or costs related to other projects that all need work and wells to prove or disprove whether they are assets or not.

Sting,

As the surface pump is back in place and working they haven't recompleted the well for dual flow unfortunately as they have said that would be with down hole pumps,

Pboo I was just trying to see a reason why a waste tanker might be needed but apparently only after they finish a workover there is waste?

2 days ago UKOG said about 100,000bbls had been produced. 500 tankers is about 107,500bbls. So I think your announcement of over 500 tankers is a bit premature unless you are including waste tankers in that number.

Pboo,

Although the full view of the rear of the tanker wasn't shown it was evident that the second tanker had a rear door to the tanker which can be opened to tip the waste. Is it unreasonable to suppose they have oily waste having worked on HH-1?

Tellurian, according to PCS (and I agreed), need the cash so £1,000,000+ now from the shares they had (over 500mm) is more useful than an unknown amount, hopefully more -but not underwritten by a guarantee by Tymers, at some unknown point in the future. They got the 35% of HH through a reverse takeover of Magellan in distress just for the listing so maybe anything they get from the assets is good enough.

Wizard,

Looks like a waste tanker - if it has 1267 plates it's probably for the workover of HH-1 waste. Don't get too excited.

PCS

Keep posting the same old stuff about UKOG's 'plan' for 25 years of production. Their record of changing plans is better than their record of executing them.

HH-2z meant to be drilled early 2019:- 'HH-2, which has SCC planning and Environment Agency consents, is planned to spud in early 2019'

and then ' ...by the drilling and production testing of two horizontal wells, HH-1z and HH-2, both planned to start in spring 2019'.

HH-1z not drilled at all, HH-2z started end September 2019.

IOW planning was going to be submitted in Summer 2018, they have only recently done so.

From 29th June 2018 RNS:-'PEDL331 Arreton oil discovery, UKOG 65%: ...........and a planning application is expected to be submitted this summer.'

Duhsfold/Loxley/Godley Bridge appraisal from 11/9/2018 RNS:- 'Drilling of the BB-1y sidetrack well is planned to directly follow the drilling of the new 2019 Kimmeridge exploratory and overlying Portland gas appraisal well in the basin-centre area of PEDL234, a planning application for which is expected to be submitted this Autumn. Submitted April 2019.

The HH Portland CPR was to be commissioned following the submission of the planning application for the Horse Hill Development site - which was submitted in December 2018 - I don't think they meant 20 months later and counting.

The forward plan for HH in the November 2018 Corporate Presentation would have seen the 'development' site (as per the PP) built already and drilling of HH-3 to HH-6 well underway.

........and it's not what each well produces at the start, it's what it produces as time goes on. In year 20 (the length of the planning consent for production) how many tankers will there be a week, we'll have to wait for the CPR to find out, the 2018 CPR upside Portland case starting at 500bopd in year one had 14bopd in year 18 - fact.

Pboo

another UKOG sleight of hand. Understand the difference between flow and production, and what production start means.

'Consequently, with daily flow rates from production start at Horse Hill averaging over 300 barrels of dry oil per day ("bopd")...'

this might help:-

The daily flow (flow not production) rates from (since) production start (ie when they started production) averaging over 300bopd (when they stated during testing over 900bopd it was actually 901bopd).

Unless of course they lied in the final results RNS:-

'Production has now commenced from the Portland oil pool via Horse Hill-1 (HH-1) along with continued test production from HH-2z.'

and...

'Around 96,000 bbl of oil had been produced from the Portland and Kimmeridge oil pools in the HH-1 and HH-2z EWTs.'

You are also in another thread deliberately ignoring that Asset Level and Field Level OPEX does not include the costs of running UKOG and all it's other subsidiaries. I doubt whether even those costs include everything that HHDL has to pay for as they are specific to the Field (HH-1 & HH-2z flows) and Asset which is just HH-1 now it is in production under FDP.

Have a look at the final results - operational costs of UKOG are separately accounted for from investment costs which appear only in the group cashflow account. We're still waiting for the HHDL accounts to end September 2019 to compare what is attributable to HH.

Nickamog,

If UKOG produce more oil now the fixed operating cost reduces per barrel. If they completely stopped producing all costs that couldn't be stopped would still have to be paid.

Assuming the decline rate isn't massive and reasonable reserves attributable to these 2 wells then producing as much as possible now should improve positive cash flow at asset and field level according to the figures provided by UKOG in the recent RNS and not impact future production significantly.

Flares,

Welcome.

Someone was selling big time yesterday, on a 5 day VWAP less 10% if it was YA they would be taking a big risk if the price didn't stay down as the placing was 20% less than the closing bid price on 24 April (0.25p) rather than the actual sells which were at 0.292p so actually a 46% discount to these and a 50% discount to the mid price.

I would imagine YA are a little bit cross they didn't have a no placing below their formula clause.