Member Info for Penguins

R,

I apologise if my post inferred you deliberately left out the 2 planning applications, it wasn't my intention, going to look at the planning permissions reminded me of this application.

But I'm fully aware of the planning permission regarding tanker movements for the full development (which continue to drop after the 2 periods you mention, the next period to 8 tanker's a day - half the initial volume in less than 2 1/2 years), but this application is for an interim period up to when the full development is constructed when a new 'Application for Hazardous Substances Consent' will be submitted as detailed in the application.

The planning application that has 3 tanker movements is specific to the production from HH-1 and HH-2z up to when UKOG build the full planned development site. It is linked to the amount of storage of crude oil that will be allowed during this interim period.

As UKOG had already hinted that HH-1 might have a dual completion in December, and revealed plans to do so on 28 January - and had the preliminary clean-up period data from HH-2z, plus all the data from HH-1 when this was submitted (31/1/2020) this is either a massive c*ck-up - or this is what UKOG expect to need to store and export from the site when both wells are producing, submitting for less than the volume that may be required, and having to submit another (delaying) application would be pretty stupid.

I'm not sure of the significance of the other planning application though it does seem to align the language in this hazardous substance consent application (construction of a process and storage area and tanker loading facility) rather than simply the 'commencement of the development'.

It may be to just simplify the interim site construction permission.

As for the Fjones conversation, don't believe any rumour or even interviews with SS - that can't be confirmed by RNS, official documents - eg planning, EA. OGA - or for equipment on site to verify what it is, or tankers - photos or videos.

We don't know whether SS's comment was an honest opinion at that time, I would hope it was.

What is more worrying is that the willingness of some site staff, according to FOTH, to feed information to the guys watching the site, either way - true or false - might not be strictly legal.

Camperdown,

You've finally realised that UKOG's plans are full of 'ifs and whens' that are rarely kept to - but those two quotes are from RNS and illustrate the disconnect between the theory that it's the local authorities that delay and the fact that UKOG don't get on with expediting the planning.

Roganjt posts about planning illustrates the delay between getting planning approved with conditions (September 2019) for the development and UKOG submitting the requisite documentation - and now the process is delayed.

But he has missed out mention of the most interesting application which is to do with the interim arrangements whilst HH-1 and HH-2z are producing / ewt:-

SCC Ref 2020/0018 SCC/HSC/2020/0001 Consultation
Location: Horse Hill Well Site, Horse Hill, Hookwood, Horley, RH6 0RB
Proposal : The storage of crude oil in association with planning permission for retention of the wellsite and production of hydrocarbons.'

Here's a couple of extracts:-
Page 5:-
'The proposed activities to be undertaken at the well site are the extraction, storage and export of crude oil.
The Applicant proposes the construction of a process and storage area and tanker loading facility to enable the production
of hydrocarbons from two (2) wells for a period of twenty (20) years inclusive of well maintenance workovers and sidetrack
drilling operations.
The activities will consist of the extraction of petroleum from the well formation via the wellbores (HH-1 and HH-2z) to
surface where it is processed through a three (3) phase separator.'

Page 6:-
'Transported offsite via Road Tanker (HGV) on a daily basis.
Out load – ~90 tonnes per day.
Number of vehicles – 3 per day'

Hmm.

I also note that the next (later) application is to change the wording from 'development' to the wording used in this interim application: 'construction of a process and storage area and tanker loading facility':-

'Non-material amendment to planning permission ref: RE18/02667/CON dated 27 September 2019 to allow for a Construction and Environmental Management Plan (Condition 19) to be submitted and approved by the County Planning Authority prior to the construction of the process, storage and tanker area.'

Interesting ensures the relevant document applies to the interim application.

Make of it what you will.

LSE,

You need to back that up with some dates. UKOG had PP for HH-1z and HH-2z granted with conditions in late 2017 and all pre conditions satisfied by March 2018, and were planning to start drilling in early 2019.

23/3/2018 RNS:-

'UK Oil & Gas Investments PLC (London AIM: UKOG) is pleased to announce that it has been informed by Horse Hill Developments Ltd ("HHDL"), the operator of Horse Hill licences PEDL137 and PEDL246, containing the Horse Hill-1 ("HH-1") oil discovery, that it has now received final decision notices from Surrey County Council ("SCC"), discharging all of the pre-commencement conditions.'

Most posters are aware that it takes time to get planning permission passed once submitted yet UKOG can be lackadaisical getting round to submission to start the process off. IOW planning was going to be submitted in 2018, they have only just done so.

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

Wizard,

How many months did you continue to post that HH-1z would be drilled immediately after the Portland horizontal after it was clear that UKOG weren't going to do that? Not sure what sort of company would make a plan just as a 'red herring' to deceive investors though.

It's not me that has been throwing out guesses of future flow rates recently - though I will keep pointing out that the information that the company has published recently (and for some time) based on the testing to date (plus even an incomplete tally of tankers) is insufficient to guess what flow rates are likely.

Trollhunter

You posted:-

'They haven't connected both well to the pipework to flow both together yet'

Not sure why you, or anybody else, thinks that they can't produce from both wells at the same time now.

From Final Results (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.'

Clearly it was possible at the end of March - production from HH-1 so no longer test production, and 'test production' not clean up for HH-2z.

If they are producing from both wells the volumes being exported does seem very low.

PCS
I doubt the HH-1 dual completion will be 'soon', though soon seems not to mean soon where UKOG is concerned. As regards all the other prospects, appraisals etc. at the moment they may as well be located on the moon. UKOG need to get HH producing a reasonable amount and explain what the plan is for the Kimmeridge - and why as the plan keeps changing without explanation. As for BB I would be surprised if they return to the site, definitely not if the Dunsfold Kimmeridge is not prospective, as they allowed the licence just to the south of BB to lapse. Walking away immediately after spending £9mm is hard to do but so far they haven't submitted a planning application for a further drill there.

Wizard,

SS's credibility is that the RNS have been honest. Things will change during exploration - it's just the interpretation of them that folk like you have put on them. Flow rate from a Portland horizontal was most recently predicted as 'significantly more than the vertical well', not a specific number, and of course they can describe an ewt flow as held back for long term stable flow.

Anybody else left who remembers the Hoyer tanker P&D just before Xmas 2017 when there were claims of a huge Hoyer tanker contract to ship the oil from BB - followed on the 27th December by the first of the BB isn't working RNS. Unfortunately LSE has scrapped posts from then.

I sold half my holding (should have been all for just under 4p - yes 4p) as although there were supposedly articles confirming it and posters saying they had contacted Hoyer it just didn't ring true. It has never since topped the price on that day!

It needs to be confirmed it's a tanker for crude (Hoyer mostly ship refined product) but maybe Hamble is full and the crude needs to be tankered elsewhere and BKP haven't the flexibility to allocate a tanker for a long haul at short notice?

Scallywag,

Read the Final results:-

'The FDP covers the HH-1 well and Portland reservoir unit. Further Horse Hill field development phases will be submitted to OGA via FDP addenda, initially the HH-1 Kimmeridge reservoir unit and HH-2z.'

So your statement is wrong 'the wells at horsehill are still in test mode and therefore restricted to output. HH-1 will come into production once the kim and port are duel flowing'

HH-1 already has FDP approval.

Yes it would be nice for SS to publish fantastic flow rates from HH-2z - I wonder why he hasn't ....and only those with rose tinted spectacles would think UKOG has been in the slightest bit open about flow rates previously, ducking and diving with short term rates - the operational update which quoted a low of 10 bopd illustrated what just quoting maximums can hide.

And you have sat outside the site for the last couple of weeks to know there haven't been waste tankers?

Wizard,

You write as if you have seen these new OGA instructions, perhaps you could share the relevant paragraph that says onshore operators now have reduced production limits - and presumably you know what they are for HH. The last thing the OGA issued was they would 'take a pragmatic approach to compliance', not issue more regulation.

Nomlungu

aaaaah- sarcastic - until I got to the end I just thought it was a run of the mill 'explanation' of what was going on. Be careful there's a few here who would recommend that post, and not as sarcasm.

Wizard,

As the limit is agreed between the OGA and UKOG I would hope UKOG would make sure it was enough for predicted rates, and as has been demonstrated the OGA is happy to increase it. HH-1 could be producing under the FDP rather than ewt.

Whatever number of barrels that UKOG could produce will be insignificant in terms of UK production, if 200bopd was OK then so would 1200bopd , whereas to UKOG revenue even at $30 odd is significant, or are the costs of production, rather than break even, greater than $30?

Ninetails

The Separator and heater are 2 separate units. There is no reason to suppose that just because the heater is not running that HH-2z is not being flowed through the separator - it seems it's OK to flow HH-1 without the heater running.

Zoom:- UKOG should be flowing as much oil as possible for revenue. But unless they are flowing more than the occasional 400bopd odd that seems to be leaving the site that won't be break even for the whole group - and probably not for HHDL at the current OP.

This also addresses the idea of HH-2z being 'choked back' - why this has become the go to reason used by disappointed posters for poor flow I can only imagine - but wouldn't it be easier to just reduce the pump rate for HH-1 and slow down the ESP in HH-2z. The Portland is relatively shallow and normally pressured - maybe the bubble point is not much below the 'virgin' reservoir pressure so the flow does indeed need to be 'choked back' but not to deliberately lower production levels.

Wizard,

The permission is for a maximum (maximum) of 16 tankers a day from HH for a period of 4 months, during which the number of tankers must be expected to decline as at the end of the 4 months the permission drops to 12 tankers . As this permission is for 6 days a week that's 96 tankers with 215bbls per tanker = 20,640bbls or an average of just less than 3000 bopd ( for 4 months, when that permission drops to 12 a day = less than 2250 bopd.

Yes a lot of oil for an UK onshore site (except Wyytch Farm and minuscule vs NS production levels), but that is based on 2 Portland horizontal wells with an injector, and 4 Kimmeridge horizontals, when that will happen.

If production is better than UKOG obviously expected when they applied for the planning permission they can apply for mor tanker movements, but this is the current expectation.

As for production costs that will depend on UKOG producing the volume of oil expected as this is total production cost divided by number of barrels produced - and I'm pretty sure the 'production cost' they are using won't be a total site cost and even less representative of the cost involved during testing HH-2z in tandem with producing HH-1.

and you missed the sub-heading from the Gaurdian - ie the reason those jobs were cut:-

'Oil companies cut workforce by 40% in two weeks to help stem spread of coronavirus.'

HH1AN2,

Directors will always have more knowledge of what the company is up to, but an RNS now giving details of HH-2z and HH-1 flows would probably end a closed period as both of these should be going into periods of stable flow, HH-2z for 90 days plus, according to previous company statements and other activity is being curtailed.

As the 0.4p options expired during a closed period the BOD will have the opportunity of extending the period of their validity immediately following the end of the closed period.

Whilst he could buy cheaper in the market place buying options does mean the money goes into the company rather than to a retail seller.

Wizard,

I wouldn't rely on a SS PR interview from January 2019 as an indication of how the company will now progress. A lot has happened since including a lot that hasn't happened as expected.

There isn't enough information to determine the likely flow rate from HH-2z. UKOG have quoted an evasive 'significantly more than the vertical well' in recent RNS. In the 2019 final results they claimed 1000bopd from a horizontal well - take your pick.

HH - 1 Portland flowed under test sustainably 220bopd. UKOG suggested this was a prudent rate during testing.and have quoted a calculated rate of 362 bopd was sustainable, but not how long for. So I would expect a rate hopefully between 220 and 362bopd. Anything less than 220bopd would be a disappointment and any more than 362 a surprise.

Goodnight

Wizard,

Thank you. As for the Kimmeridge and in terms of the current HH-1 well, and a sustainable flow - yes as that comment was made on 14 November when the Kimmeridge was going to be flowed, not the Portland from HH-1. We shall see.

And talking of excerpts from posts this was from your earlier post today:-

'My questions are is this all from HH1 Portland as the eyes say HH2 not being tested.

Could it be 4*220 barrels today'

So if HH-2z isn't being produced where could the 4*220 is coming from?

It's reasonable to suppose that you were implying the 4*220 was coming from HH-1 Portland.

As for the RNS that is referring to future RNS.

Don't change the subject,

If you are claiming I have posted something either find it or admit you made it up.

This was your previous quote:- 'A exert from your post. '200 bopd from the Kimmeridge (despite assertions the 'taps' would be opened up this seems to be about what the Kimmeridge is actually capable of.'

This was a very selective excerpt - and it's about the Kimmeridge, not the Portland.

Your comment was about the Portland.

So where have I posted 'the Portland will not produce more than 220BOPD if the taps were turned on'

I hope you can provide a quote from one of my posts to back up the claim you made earlier today at 10:48:-

'Could it be 4*220 barrels today & would that not just put Penguins deramping down the swany that the Portland will not produce more than 220BOPD if the taps were turned on & current level will deplete not increase.'

As I'm almost certain I have never said that opening up the taps of the Portland could not produce more than 220bopd.

If you do provide a quote make sure it isn't about the Kimmeridge and indicate when it was from.

But I am pretty certain that the vertical well (HH-1) will not be producing 880bopd sustainably from the Portland?

If I'm right and there is no RNS stating that the Portland is producing 880 bopd sustainably from HH-1 will that put your ramping down the Swanee?

Why do you think that HH-2z isn't being tested?

I hope you can provide a quote from one of my posts to back up the claim you made earlier today at 10:48:-

'Could it be 4*220 barrels today & would that not just put Penguins deramping down the swany that the Portland will not produce more than 220BOPD if the taps were turned on & current level will deplete not increase.'

As I'm almost certain I have never said that opening up the taps of the Portland could not produce more than 220bopd.

If you do provide a quote make sure it isn't about the Kimmeridge and indicate when it was from.

But I am pretty certain that the vertical well (HH-1) will not be producing 880bopd sustainably from the Portland?

If I'm right and there is no RNS stating that the Portland is producing 880 bopd sustainably will that put your ramping down the Swanee?

Wizard,

You have pointed out that UKOG have taken on a huge amount of risk and cost with large equity positions in most licences, it is normal for companies to co-venture to share the cost of exploration. But it looks more like all the co- ventures wanted to do in these licences is bail out. None of the sites outside HH have guaranteed success, and the lack of news about HH doesn't seem to have helped sentiment recently either.

It can cost a lot of money to prove something is worthless in oil and gas. £9mm so far at BB - but UKOG are still 'planning' to go back, though still no planning application for another well there.

Perhaps another way of looking at those equity positions is that nobody else was interested - there were only sellers and no other buyers so it's a bit early to pour praise on a company for increasing it's net acreage in areas of no interest to others.

Wizard,

apparently nothing requires an RNS - were you one of those that kept posting during the BB testing that only bad news requires an instant RNS which meant no RNS meant everything was fine - which was proved completely wrong

Perhaps you could rewrite without typos, or explain:- 'Actually penguins no it is where it on s at the moment.' vis-à-vis your previous post:- 'I don't know but it may be the flow test of HH2 may have been suspended as it may not be considered essential work.' - what would lead you to the conclusion that HH-2 might be suspended?

Wizard & Tony,

So having cleaned up the well the next thing they do, because there is no storage, is shut in the well - but they can continue producing HH-1 because it is 'essential' in this time of glut - and they can store that - I suppose the reason is the huge volumes that HH-2z will produce?

If something goes wrong the same applies to HH-1, so hardly a reason to shut in HH-2z as they need the money.

5. Looks like you two are worried that there aren't at least 4 tankers leaving the site every day so let's think up an excuse as to why.

We will (hopefully) find out soon enough what's going on - we don't actually know (or do you?) how many tankers are leaving the site so your excuses may not be needed.

PCS,

So they planned for the Covid-19 restrictions, how prescient of them - surprised they couldn't plan for all the other unexpected events that have tripped up progress over the past 5 years - or yet another fairytale that wasn't mentioned in the GM notice or resolutions.

Next we'll get a tale about how SS single handedly brought the oil 'war' to a conclusion by threatening to 'open up the taps' at HH.

I doubt that Covid-19 had anything to do with the GM resolution - more likely they needed the permission to issue extra shares to Tellurian and YA before the AGM in the knowledge the water issue wasn't going to be solved for a while- nor was it nailed on it would be solved - and the SP dropping was a risk that the number of shares needed would exceed their authority' Alba and/or Doriemus equity purchase wasn't mentioned either.

Events have probably reigned in the plans and maybe they have found it impossible to satisfy their desire for a placing or other financing.

Still no operational RNS, and reports of 2 to 4 tankers a day every day seem premature.

Rather than making stuff up I prefer to refer to documentation

In what appears to be an interim planning application for oil storage during production from HH-1 and HH-2z HHDL is only expecting 3 tankers a day to export oil.

In this application, SCC Ref 2020/0018,The storage of crude oil in association with planning permission for retention of the wellsite and production of hydrocarbons.

This Document: Application Document including Application form_redacted

On page 5 the activity it applies to is:-' The activities will consist of the extraction of petroleum from the well formation via the wellbores (HH-1 and HH-2z) to surface where it is processed through a three (3) phase separator.'

On page 6 are details of proposed export of crude oil:- Transported offsite via Road Tanker (HGV) on a daily basis.
Out load – ~90 tonnes per day.
Number of vehicles – 3 per day

The volume of oil storage they are seeking permission for is 285 tonnes.

This surely must be a mistake, though another application will be made when they get round to constructing the full development site.