Member Info for Penguins

Pboo,

UKOG are being highly selective using figures at 'asset level' (only HH-1 production is from an asset - ie covered by an FDP) and field level where they seem to have chosen to include certain costs ('inclusive of tanker export, sales and marketing'). Neither of these will have more than a small amount of company (UKOG) overheads - and these would be chargeable costs to HHDL that would be subject to audit.

So no SS's salary is not in this OPEX as it is only costs, and even then not all costs, specific to the asset and field.

.....you should be worrying about, the placing is the least of the problems, a temporary blip.

Much more worrying is the daily production from the site. I suspect there will be those posting that this is just HH-1 or HH-2z but read carefully, even though UKOG have tried to muddy the waters by not specifying which well is flowing what in this RNS.
31 March 2020
Production has now commenced from the Portland oil pool via Horse Hill-1 (HH-1) along with continued test production from HH-2z.
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

Today:-
Consequently, with daily flow rates from production start at Horse Hill averaging over 300 barrels of dry oil per day.
Horse Hill (UKOG 85.635% controlling interest), which has now produced over 100,000 barrels ("bbl") of dry oil,
So since the start of the month they have produced about 4000bbls or about 19 tanker loads which is about what has been verified by photos etc. perhaps now they can stand down, until the dual completion is in place as UKOG have given an average rate.
If only UKOG would come out with details, an average from the site since production start (not the average of production) tells little, is the rate getting better or worse, does it vary up and down which well is producing what volume. We know that occasionally HH-1's pump is not working however is HH-2z on a stable rate ewt - what is that rate? A sentence in the RNS was all that was needed.

No mention that production is being held back, the only intervention mentioned to increase flow is the dual flow from HH-1 which will increase production - to what. If this rate was just from one well an intervention to produce from both would surely have been mentioned.

If anything the placing is good news, if the RNS had only mentioned the flow rate how much better would the SP have held up?

Yesterday I posted that a reasonable rate might be met with disappointment because of the 1000bopd merchants - but even I hoped for more than this.

The question is why are 2 wells are producing less than the calculated predicted 362 bopd from HH-1?

Pboo,

Everything is time stamped.

Tweeted picture of tanker 9:27 my post 9:24 - and I had to compose my post.......

and I didn't say it couldn't be free flowing though it's unlikely if they are conducting the long term steady rate ewt.

Apologies but this tweeter seems to think he can insult me and demand I answer his conspiracy theory tweeting.

Eyeson thepriz12:-
When you stop referring to me as ruthie or other childish taunts I might answer more of your ridiculous tweeting - until then just because I see fault in what UKOG are doing doesn't mean I don't hold quite a lot of shares in UKOG. My hope (gamble) is that the Portland flow rates and maybe a CPR will help the SP. The halving of the SP recently may mean the gamble won't pay off.

It's a big if as the huge amount of cheap shares sold to pis plus any YA and Tellurian means it will probably easier to buy rather than sell if there is a spike on the flow rate/s from the Portland wells. My one concern is that all the talk of 1000bopd may mean reasonable rates are met with disappointment.

Perhaps it hasn't occurred to you why I'm so interested in getting to the truth about tankers and which wells are flowing by challenging statements especially as currently the production is coming only from the Portland unless the company has lied about delaying the dual completion and continued production from HHZ-1 Portland.

It's obvious despite your ranting it isn't what is posted or tweeted that currently affects the SP in the long term it's what the company says, the loan notes and outside events. Blaming it on a conspiracy theory won't help you understand the actual forces in play.

There's a post by Wealdoilers 'hoping' there would be 2 or 3 tankers at Horse Hill:-

'Could be a big day if these 2 and the 3 tankers being used for the past few weeks all are on the way today to #horsehill'

There's obviously someone at the site taking pictures so if there were tankers there should be pictures of them,

But after a weekend if they are producing loads of oil there need to be tankers as there have been no confirmed sightings of any tankers since Thursday - even though there was someone at the site Friday:-

Friday:- 'No tankers as of 10ish. Eyes light on the ground. No 4 is still at the dentist.'

And later there might have been a tanker but in the distance so not confirmed.

Over the weekend the driver of one of the BKP tankers was being evasive and wouldn't say who is operating the Sayers tankers - BKP do have some Sayers branded tankers as Sayers make and rent their tankers.

and more fantasy from Weald Oilers this morning:-

Weald Oilers
@WealdOilers #ukog #horsehill
In my opinion
Flare flaring + No pump = HH2Z free flowing.

May be your opinion but there's a down hole pump in HH-2z so pboo you couldn't possibly know - might be HH-1 free flowing and HH-2z being pumped - if only UKOG would release an operational RNS - been a long time apart from a few snippets in the final results.

PCS,

You seem to think that if you make stuff up whether it is about the company or other posters it is true.

Just because I don't have the same happy clappy belief in UKOG that you have does not mean that you are justified in making the comments you have.

What you and many others fail to realise is that this is a discussion board about UKOG, not about other posters perceived motives, or anything else about the poster except their views. My views have strangely been in accord with what has happened to the SP. If you have any complaint it shouldn't be with posters pointing out the shortcomings with what is going on - those that resort to childish insults because they bizarrely believe not being positive about the company somehow affectts the results of drilling or testing have lost the argument.

But like posters before you (Steptoes, Rodders, FOTH ) when they finally realise that what they have been spouting for months will come back to haunt them they embark on a series of sweary posts attacking those they feel 'wronged' by and can move to twitter claiming they have been banned for having positive opinions, forgetting their sweary exit.

If you do get banned enjoy twitter, it will be much more to your taste as unacceptable lies (including nasty tweets about SS) are tolerated there and BS about UKOG not subject to the same scrutiny as on this board.

Interesting Tollesbury,

Discussion.

I went back 100 of your posts to October 2019 and the absence of discussion was astonishing, the occasional post about how great UKOG was without any substance, but mostly they were criticising other posters who in your view were trolls or derampers, often with some sort of slur on their character, I didn't read through them all so not sure if you are still calling into question their mental health?

You seem to have a complacent view that everything is OK with UKOG and your ability to deduce this from RNS underpins this - though you are coy about passing on the basis for your understanding.

Even before the global stock markets twigged that the pandemic was serious investors seem to have come to a different view about UKOG. Perhaps they understand that CLNs can damage a company's SP and in O&G E&P things won't always turn out as the company hopes. There can be subtle signals in the RNS when things have changed, ignore these at your peril.

My 'thing's is reading and taking a scalpel to RNS to pick up on these changes, though I'm often accused of twisting the facts - it's quoting them and understanding them.

Posters claiming that the SP will rise (or OP, flow rates etc)soon may be right eventually, but their ability to predict anything should be called into question when they have said the same thing for month after month and been wrong.

The irony is you are contributing to fulfilling your prophecy though.

R,,

we don't know what the current numbers are from HH-2z or what they might represent (or are you being fed inside information from the site?) - and I could have doubled my contribution to SS's bonus for every time that a poster or tweeter had said that perhaps unexpectedly low flow rates were due to prudence, ewt, chokes..

But have a look through my posts -every now and than I mention - to those exuberant posts about flow rates during testing -that when they disappoint there will be posts saying the rate is being held back.

eg in my post of 21 March:- 'it's amazing how often posters claimed production would be high and then claimed it was being choked back when production wasn't as they expected.'

As for the 3 tankers a day this is what I posted (not the whole post) on 11 March:-

'It's obvious that this doesn't gel with predictions of 1000bopd 7 days a week - but maybe this represents a prudent, ewt level of production?'

So thanks for pointing that out.

Tymers,

If I had been given a pound for every time a poster or tweeter had used the phrase 'turn the taps on' or similar (eg 'taps on full') I would probably be able to help fund SS's bonus.

Every now and then UKOG have turned the taps on (or increased the pump rate) for an hour or so, especially after a shut in then they put out a RNS giving details of the flow rates.

You also quote SP rather than mcap - and that 11p SP was a combination of factors (SS making ultimately unfulfilled claims about how good the Kimmeridge would be at BB and activities by 'the French' who exited quite quickly). The mcap was momentarily about £385mm - probably based on a few buys.

With at least 8 billion shares (if there are no more share based fund raises) on the horizon that gives a SP of about 5p - and at the time of the spike to 11p it seemed the regional Kimmeridge play was about to be proved. That hill still has to be climbed.

Portland success though would help and it's Interesting there seem to be 3 tankers a day - will it continue? It's what they asked for in a recent planning application for this interim period before the full development, it really needs a RNS and some fleshing out of realistic future plans in the light of the current situation and some show of tightening their belts by the board.

Is it just HH-2z, HH-1, both? I'm starting to be hopeful - last time that happened was during BB.

Northfork,

I've long thought that UKOG would end up with 100% of HH (and possibly the Weald) because no one else wants to invest in the appraisal of either the Portland or Kimmeridge. Even the other shareholders and equity holders in HH have bailed out, or are not paying their way, despite being party to the technical information that SS is obviously is so enamoured with, or is it a case of carry on regardless.

Whether it's SS playing a blinder or gambling with other people's cash we still wait to find out. Let's hope having had the costs to get to this point paid for by pi buying cheap shares from YA etc. HH is declares commercial going forward n a CPR rather than just by UKOG.

The question, as always, is how commercial - ie what reserves, future production profiles. These figures crucial to understanding the value of HH and RBL are still unknown 4 years after the initial testing and 20 months after the ewts began.

Troll,

You posted:-

'we don't know what they are flowing until the company tells us.'

well they have 3 weeks ago in the 31/03/2020 Full Year Final Results RNS:- CEO statement, first paragraph:-

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

So unless they have gone to the trouble of disconnecting one of the wells what you posted isn't 'probably' at all:-

'and probably not completed double well pipework.'

So 'probably' isn't really the right word for your next bit either. possibly, perhaps, could be but not probably.

'So flow is probably just from one well and one layer if it's HH-1.'

To quote PCS:- 'You haven't got a clue whether they are producing from HH1 or HH2z or both!'

Though could it be (to quote PCS again) an 'odd but of erroneous information from RNS'. But what else is there to go by if you throw doubt on what is in RNS - the exception is if UKOG have updated it.

Sting,

I'll remind you:- UKOG are not flowing the Kimmeridge at the moment. They were over Xmas, then shut it in and anow are flowing the Portland from HH-1. There is a plan to dual flow HH-1 in the future, not necessarily 'soon' - though like significantly soon a word that covers a vast range of opinion.

and has UKOG cracked the Kimmeridge codec or have they just been lucky at HH (and we're not even sure how 'cracked' at HH) and hit a sweet spot with lots of fracturing?

PCS

You know I can't resist your lists, here goes 'jogging on'!

PCS:- You haven't got a clue whether they are producing from HH1 or HH2z or both!

P:- nor do you, but I didn't claimed to - but I have previously pointed out that in the final results (31/03/2020) stated they were producing from both.

PCS:- You haven't got a clue about whether the next CPR will outdo the previous one!

P:- It had better be, there were zero reserves for HH in the last one in 2018 - I may have no clue, but I'm guessing it will be.

PCS:- You haven't got a clue as to whether HH-2z connected oil is large or small!

P:- nor do you, and I am just pointing out that things have changed since the RNS when we were told it was 11-14mmbbls, the fact that UKOG have said that the sweet spot has contributed the lion's share of production suggests most of the Portland doesn't - what the connected oil will be we shall see, and what the recovery from that will be as well, with and without pressure support - as if HH-1 and HH-2z are separated then a single injector can surely only support one of them.

PCS:- You haven't got a clue as to whether they can only produce from one compartment!

P:- But compartmentalisation causes a complication with producing from the whole reservoir, and with pressure support (see last response).

Everything in my post is reasonable comment based on what UKOG have put in RNS with no reason to suppose it's erroneous (though I'll save that argument for later) and could be cause for concern - yes HH needs a CPR which was originally promised for 'after the development planning application is submitted' (erroneous information in a RNS - getting the hang of this new 'argument') and I'm pretty sure they didn't mean 16 months and rising after.

I'm sure my 'clap trap' doesn't fool an expert such as yourself, but different interpretations of the data at hand even from people you disagree with is the lifeblood of discussion.

Perhaps it's time to say you're putting me back on filter.

PCS,

But you don't know what they are producing from the Portland now let alone next year, or 25 year's time. The Portland has changed a lot since the 10mmbbls recoverable was stated by SS. Compartmentalised, water filled fractures and a realisation that the majority ('lion's share') of production was coming from the 35ft sweet spot which clearly from the Nutech log in the 2018 CPR had two separate layers of 10ft and 5ft with a 20ft poor layer (similar to the remainder of the Portland) in between. If they weren't able to keep HH-2z in the actual sweet layers - preferably the 10ft one - then how much of the well is in good reservoir. But the main impact is if the remainder of the Portland doesn't significantly contribute to HH-2z's connected oil, effectively only producing from the oil in a compartment of the sweet spot.

As for the Kimmeridge, the idea it could be produced across the Weald was based on the short test in 2016 (eg the EY report based on what UKOG told them would happen), and the four wells at HH were planned before the 2018 Kimmeridge test had started. The RNS stating that the scoping report, which effectively became the basis of the development planning application, had been submitted to SCC was the same RNS announcing the start of the Kimmeridge flow testing.

Trollhunter,

you really deserve a prize for some of the most inventive (and unlikely) posts - although Tymers comes pretty close.

There aren't many places in the UK that can accept road tankers with crude. Apart from Hamble another is the Welton Gathering Centre in the East Midlands - it's sent by train to Immingham apparently. Perhaps Hamble is full.

Ocelot,

the income statement doesn't have the test oil sales in it - you are right, but nor does it include the costs of getting that oil and other group activities defined as 'investing' so either keep to the income statement (operating activities) or statement of cashflows (operating and investment activities) but you can't mix and match.

If you want to believe the UKOG group only 'lost' £4,788,000 because of the accounting sleight of hand, instantly removing a substantial net loss that's your prerogative.

and 'The point about adjusting operating losses for "revenues from the sale of hydrocarbons produced as a by-product of testing and evaluation activities" is that they WILL be included in the income statement once UKOG passes, for accounting purposes, from the ewt to production.'

But so will the costs - and yes costs associated with the other licences won't be in the 'operating' costs but UKOG will still have to find the money for this 'investing'.

Ocelot,

I think you do need to look at the consolidated statement of cashflow as the income statement only tells part of the story.

The income statement doesn't include the cash flows from investing activities which include the oil sales less cost of Expenditures on Exploration and Evaluation Assets so just plucking the test oil sales from the investing activities does not reflect the real position for the group.

The net loss from investing activities (excluding the Tellurian purchase) but including test oil sales is £3,241,000.

So if you want to include oil sales you should actually add at least £3,241,000 to the loss = £8,029,000

The missing million from my calculation of loss is mostly other operating expenditures not included in the consolidated income statement but included in the consolidated statement of cashflow.

Ocelot,

Look at the consolidated cashflow account - it's easier to follow the money.

The consolidated cashflow account adjusted for the Tellurian purchase and the2 fund raisings indicates a group loss of nearly £9,000,000.

Offsetting funds raised to reduce losses is not reflecting the true position.

Looking at the consolidated cash flow and comparing the half year to final results it’s obvious that the income from test oil sales has been included (offsets) the ‘Expenditures on Exploration and Evaluation Assets’ in the full year accounts.

In the full year account this expenditure is less (£3,125,000) than the amount in the half year account (£3,975,000) which is impossible unless there is some income offsetting the expenditure. In the half year account oil sales are separately listed ‘Receipts from sales of test volumes’ (+£1,773,000). This suggests that in the full year cash flow the Expenditures on Exploration and Evaluation Assets could be restated as follows:-
Expenditures on Exploration and Evaluation Assets (£5,239,000)
Receipts from sales of test volumes +£2,144,000.

The cash flow account also has net proceeds from issue of shares of £8,498,000 (the £9mm less costs) with a payment (to Tellurian) of £5,060,000.

Therefore removing the Tellurian ‘deal’ means UKOG raised a net £3,438,000 from issue of shares.

Leaving the rest of the cashflow account ‘as is’ if UKOG hadn’t raised this £3,438,000 the loss would have been the minus £5,535,000 net change in cash and cash equivalents reported plus this amount.

The 2018/19 net change in cash and cash equivalents without these fund raisings less the payment to Tellurian would have been a loss of £8,973,000

HH1AN2,

HH-2 pilot was drilled through the Portland but stopped above the Kimmeridge targets so not through several zones if that’s what you mean.

The section of hole below the kick-off point which was above the Portland will have been abandoned (sealed off) so can't be realistically re-entered, certainly not while UKOG want to produce from HH-2z.

Simple answer - you can stop wondering.

Tymers,

It all depends on which version of what UKOG planned to do I suppose.

As I've pointed out (not an opinion) they have serially failed to submit planning applications to their own schedule, they also failed to drill one of the two wells drilled in 5 years (since the Angus team drilled HH-1) on it's original schedule, and were going to commission a CPR following the submission of planning for the HH development.

Using Brexit as an excuse for the 20 months of decline whilst the ewt proceeded to it's conclusion at a snail's pace, without a CPR to justify the time soent is a bit lame. Where was the Brexit bounce because Kimmeridge production was going to save the UK, maybe announcing on the 28 Jan that the Kimmeridge would remain shut in after the interference test rather put a dampener on it?

Next excuse please, because they are excuses for poor performance, insufficient planning and managing expectations for unexpected events (and I'm not referring to the pandemic or the oil war), failure at BB which was precedeed by over optimistic statements by SS and releasing a mixed bag of incomparable, usually short term, flow rates from one RNS to the next but suspiciously low volumes of oil produced relative to the flow rates released.

I usually don't comment on the SP in the future as there is too much uncertainty but you raise an interesting point about investors getting in now getting a bargain. I think I've heard that one since the start of testing. UKOG has gained a large number of new (probably unwilling) long term shareholders over the past 18 months since the SP dropped below 2p who thought they were buying a bargain (as promised by posters and tweeters), only to find they either would have to sell at a loss or hang on in for the promised redemption of their golden tickets. There were short term trading opportunities but those shares would still be in another (spiked?) holders hands. The volume of shares sold by YA and Tellurian and others in that time (over 2 billion) is probably testament to the overhang of shares just to get to 2p held by investors who will be happy, maybe delirious, to exit with a 10% profit.

That coupled with any remaining overhang from YA and Tellurian, plus any further non RBL fund raising and other disenchanted shareholders with low avarages suggests that it will need to be a pretty astounding RNS to shift the SP even to pre pandemic prices.

But keep on selling the dream.

Pboo,

1) but that was the context in my post which you were 'discussing' - 'As for pump capacity I'm pretty sure that the Portland oil production from HH-1 is not being held back by the rod pump.'

He works for ESPSpecialists but he's not an expert on Electrical Submersible Pumps- is that really your opinion?

Flow rates you quote are from October 2018 RNS (563 and 771 barrels of oil per day) Compare that to 23 December 2019:-

'Immediately following the current HH-2z shut-in, flow lines were reconnected to HH-1 and dry Kimmeridge oil flow was resumed on 18 December at an initial half-hourly rate of 354 barrels of oil per day ("bopd") with an average daily rate of 301 bopd.'

Obviously flow rates continued so well that they then announce that the Kimmeridge will be shut in and the Portland flowed instead.

….and your 14,000bbls since 31 March (110,000bbls minus 96,000bbls mentioned in the year end results) approximates to an average of over 4 tankers a day in April (Monday to Saturday).

Not sure that is correct.

Though to be fair UKOG didn't cover themselves with glory quoting it was nearly 500 tankers (490 x 215 = 105,000+ here's the quotes:- 'around 96,000 barrels (bbl) of Brent-quality crude oil have been produced to date' & 'The produced crude has been exported and sold to UK oil refineries via nearly 500 road tankers.'

I make @ 215bbls per tanker that's only about 450 tankers.

.....….and I'm not inferring it's your fault UKOG got that wrong.

Pboo,

Doesn't matter what the linear pump capacity is on HH-1, it won't be restricting the Portland flows, but could you give details of free flowing way over 450bopd from the Portland?

When initially tested in 2016 (ie initial rates) the Kimmeridge did have high free flow rates for short periods
Since then with every test the maximum short term rates have dropped, and UKOG have been very coy about actual daily rates over a longer period. Don't think the Kimmeridge will be producing at sustainable rates that would challenge the linear rod pump either.

As for the pump this is what your 'expert' said:-
'wasn’t involved with the ESP sizing, but based on setting depth and expected production assume it will have been a 4 or 500 series 1000bpd/pump'

Bladehater,

Obviously you prefer the posts that state the well 'will' produce x bopd or something 'will' happen by a certain date, or the SP 'will' be, or the OP 'will' be, than anyone who realises that certainty is not possible - even though those posters that are so certain of the future keep on having to revise their numbers and are often wrong.

Most of my post (and most of my posts) comment on either other posters views or UKOG statements usually give quotes. But because I'm not going to read through the whole planning documentation, and Pboo made a claim about something in that documentation I couldn't remember seeing I have given him the opportunity to back up his statement with a quote from the planning documents.

Yes I do qualify my views - opinions should be qualified.

But this is a discussion board - Pboo decided to 'discuss' my post, am I not allowed to respond.

I see he is back, I'll not judge his motives butò I do like lists, let's review:-
'He (SS) has produced over 110,000 barrels of oil' - over about 20 months, and have they produced another 14,000bbls since 31 March? But rates have dropped despite the relatively small amount produced from the millions (Portland) and billions (Kimmeridge) bbls of recoverable oil estimated by the experts on this board.
'A production well HH1 that can flow from both the Portland and Kimmeridge and soon can flow both at the same time' - soon in terms of UKOG, and despite testing for 20 months we are none the wiser at what rates
'Has drilled HH2z and got it to flow' - at what rates - and if you can't get a well to flow that was adjacent to an already flowing well.....
'Has gained permission from SCC to drill 4 further wells' - and there has been no indication when they might be drilled, most in the Kimmeridge - they also need to drill an injector for the Portland
'Generated over £4 million pounds worth of cash flow from oil sales' - and UKOG has spent huge amounts, including £9mm on BB.
'Plans are in for a well on the IOW' - more than a year later than UKOG stated.
'Plans are in for Dunsfold' - also meant to be in during early 2019 (The Company intends to submit a planning application to Surrey County Council by spring 20

Pboo,

There are no averages for tankers in the planning application that I can remember (quote an extract if you have one), the quote of an average of 3 tankers a day was over the whole period of 20 years of production and based on the expected number of tankers, and not in the planning permission but in an RNS on 5/10/2018:- 'Average HGV movements during the plan's 20-year field production life are estimated to total three per day.'

The planning permission had maximum numbers of tankers per day. That's maximums which a lot of posters confuse for expected number per day.

But this is separate application that covers the interim period before the full well site development when HH-1 and HH-2z are flowing as per the quote in my earlier post and specifically for hazardous substances consent - if you don't believe me even FOTH has tweeted a screen grab of the relevant bit of the application. I'm only reporting what is stated.

As for pump capacity I'm pretty sure that the Portland oil production from HH-1 is not being held back by the rod pump.

A reminder, during 2018 testing the RNS (03/08/2018) stated that the short term rates (6 and 2 hours) were being held back by the pump so they were going to get a bigger pump (cue ramping here and on twitter). No higher rates, even short term, were published for the Portland in the next operational RNS announcing the end of that period of Portland testing.

I suspect that installing 2 esp in HH-1, one for each layer, is an easier completion for production from both layers.

As for information from site personnel why is Roganjt on twitter saying he was told it was Hoyer by someone from the site.

BTW, where did you 'gather' that the esp that UKOG are using for HH-2z has a capacity of 1200 bopd?

..........and pictures you saw of fjones 'encounter' (details slowly coming out now).....didn't see you posting on here or tweeting saying that it wasn't SS at the time?

Hmmm.