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PSC,

In the return to Kimmeridge testing it was described as 'the deeper Kimmeridge oil pool' not an individual layer. So a continuation of the commingled test. If you meant Portland + Kimmeridge it's very unlikely as it would be producing from an overlapping connected oil and interfere with the HH-2z Portland ewt.

As for HH-2z ewt there really isn't enough information available to even make an educated guess. But it's noticeable that all these predictions don't include what rate, are they initial rates, half hour maximums, prudent rates, sustainable rates (but never for how long), average rates over a day, a week? These are all rates UKOG has used.

Whilst writing my last post I see 2 trades of 6mm shares went through - same number same price - as a trade last night.

Keeps happening.

Anybody else think YA are boosting the daily trade volume by shuffling shares back and forth?

700 bopd from the Portland + 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) should generate some free cash flow but outgoings with equipment to test 2 wells will be high.

But the loan is only repayable in cash as a company choice as long as the 5 day VWAP remains below the fixed price conversion price (about 1.35p) so if the SP rises above this then YA can continue to convert at the fixed price.

Looks like a catch 22 as there won't be any extra cash until the Portland flows and the expectation is that will trigger a rise in the SP, so the cash option would only be available in the case of a poor test - which wouldn't be generating the cash needed.

those look like made up joints and the stuff on them is probably 'dope'. It's used to lubricate and seal the joints and applied liberally - hence it's mostly around the joints.

Significant oil in the well wouldn't be good - that would mean the mud weight was too low.

apologies,

just realised the current company line (today's RNS) is the even more vague "significantly greater flow rates than those seen in the HH-1 vertical well".

and no indication which of the many actual flow rates they might be referring to - but presumably not 362bopd which was a calculated rate.

Scallywag,

the maximum YA have to pay for converted shares is about 1.35p for the £5.5mm loan. There isn't a specific figure quoted but the method of calculation is mentioned in the 7 August RNS.

Initial flow rates will be interesting but many will wait for the CPR as it will be difficult to gauge whether the whole Portland will significantly contribute to the flow or whether connected oil, and thus the percentage of it that will be recoverable, will be limited to the 35 foot layer, and even that doesn't appear to be all the relatively high poroperm Portland (Nutech HH-1 CPI in Xodus 2018 CPR).

They may temporarily test at high rates - the current company line is significantly more than 362bopd, but the recent EA documentation appears to be requesting a flare rate of about half the gas rate anticipated for 3500bopd so testing at rates above 2000bopd for any length of time may not be possible even if the reservoir could sustain it. Not sure what the limit is until the recent request is approved.

The uncertainty may, or may not be, an opportunity for brave pi - posters can guess any rate they like but UKOGs current guidance is perhaps deliberately vague and seems to be less optimistic than the previously targeted 720 to 1080bopd, and as usual no indication as to whether it's an initial or sustainable rate they are targeting.

Interesting times for UKOG.

Wizard,

Maybe you missed reading the last sentence of my post:-

'So why has the plan changed are they less confident of the projected production, though it would seem sensible to test the wells before building the processing facility.'

But the plan has changed significantly since August 7 when the YA loan was going to pay for the construction of the production facilities to bring the field into long term production, which was going to be immediately following the testing of HH-2z as was also shown on the gantt chart in the November 2018 presentation.

So we agree that the sensible thing would be to have all the information before building the infrastructure, but that isn't what was planned, has the cotinued Kimmeridge testing (and even Portland drilling) seen something in the interveneing weeks that meant that by 24 October the confidence in the original plan had gone?

Other posters have said that this plan means back to back drilling. The 540 day period means the wells are planned to be tested consecutively so, unless each well takes 90 days to drill (HH-2z maybe 60 days), the rig will be leaving the site after each well is drilled - again a sensible option allowing time to plan for the next location.

Perhaps SS has learn the value of testing first after the fiasco of installing, then uninstalling, a 'production' completion at BB.

PS not up all night - just holidaying in a different time zone and looking in, be back soon........

Did you read the link PCS?

Extract from the letter:-

'I now understand that, in addition to the proposed project covered by the air quality assessment, Horse Hill Developments Limited (HHDL) want to undertake an extended well test programme on each of its 6 wells (HH-1 to HH-6) prior to construction
of the processing facility. HHDL propose to undertake testing for 90 days on each well in a linear programme which has a total duration of 540 days. Within this programme it will be required to dispose of up to 10 tonnes per day (0.5 MMscfd) of produced natural gas.'

So the maximum they expect to produce per day is 0.5 MMscfd over one and a half years. But the associated gas for the initial 3,500bopd was about 1 MMscfd. Does this mean that prior to constructing the processing plant (1.5 years) the maximum daily production will be less than 2000bopd?

So why has the plan changed are they less confident of the projected production, though it would seem sensible to test the wells before building the processing facility.

Interesting,

Crazy travel & CT40,

Have you actually looked at the CPI, and read the RNS. What the RNS said was 'an overall 35 ft thick section containing the highest permeability reservoir zones.' not that there was an overall package of 35 foot within the 90 foot of Portland..

This is not news as it's quite clear on the CPI that there is a zone of 35 foot containing two separate higher permeability zones.

The Portland does seem layered with poor permeability zones so vertical connectivity may be a problem and we don't know if faulting will compartmentalise or act as conduits either may be problematic or positve.

It may be the possible deeper oil down to (premis for core 4) may be due to multiple seals within the Portland.

I see eyes on the prize on twitter is criticising my post of a couple of weeks ago, based on the CPI in the 2018 CPR, saying that the sweet spot was 12 foot thick based primarily on a raised gas reading that coincided with a relatively high permeability and porosity zone. UKOG state there is an overall 35 foot interval that contains the highest permeability reservoir zones.

My interpretation was driven by the gas reading which showed a 12 foot interval with raised gas and the full suite of Nutech 'flags'.

But the 12 foot interval lies within an overall 35 foot zone containing another zone without a raised gas reading that's 16 foot thick that has a sweet spot of about 6 foot.

So there is a 35 foot interval at HH containing about 18 foot of permeability above 3mD and porosity above 15%. So maybe of the 35 foot 18 foot is reservoir quality based on these calculated porosities and permeabilitiesi - it will be interesting to see what's in the CPR.

As for less pressure depletion than expected.....that would only mean anything if they had previously mentioned a) pressure depletion was expected and b) how much was expected and c) how much it actually is?

The drilling may have finished, but there is also the possibility that they are just tripping - ie changing out a worn bit.

fjones

Just a reminder of what I posted in August:-

RE: UKOG price prediction 30/10/19:- 20 Aug 2019 10:20

'Don't know if this has been pointed out before, too many posts to plough through, but the actual price on the date chosen in every previous guess the price has been at best in the bottom quartile if not below the lowest guessed price. Whilst I doubt seadocs will be reached these 'competitions' seem to jinx the SP.

My guess which isn't an entry because it isn't a defined price is less than 80% of the guesses.'

But do carry on.

Pboo,

Just looking at what was on the lorry yesterday - might be the geosteering bottom hole assembly (and a spare - like the whipstock). Drilling the first section would be OK to do with 'normal' logging while drilling

I'm sorry Pboo, I left that out because it isn't what has been stated in 4 recent RNS.

........the wording since 30 September is 'significantly more than 362bopd'.

If it was still 2 to 3 times etc - why change the wording? I have no idea what the rate will be but noting changes in wording sometimes identifies changes in direction, timing etc that UKOG has only hinted.

and prudent flowing - good idea, but the 362bopd was supposedly a sustainable rate - what would be imprudent about flowing at a rate that is supposedly sustainable - what will be the sustainable rate of the horizontal - what will be the prudent rate? I noticed in the November 2018 presentation 720 to 1000bopd was stated to be an initial rate - but that was a long time ago...….

So

Pboo,

What (except to show that maybe the HH-1 vertical is possibly connected to all the oil in the sweet spot in the HH fault block) has that to do with what I quoted from the 17 May 2019 RNS.

Here's the paragraph in full:-

'For prudent Portland reservoir management purposes and to ensure there is no detriment to the expected high performance of the HH-2 Portland horizontal well, the average pumped rate from HH-1 continues to be maintained below the previously reported 362 bopd calculated sustainable rate.'

So UKOG said detriment - I said compromised - but I previously quoted verbatim.

I thought your little group claimed to be well researched.

Pboo,

If that's the case why were they concerned that the horizontal's performance would be compromised by production from HH-1

.....and the other Portland well is planned for the Collendean Farm fault block, which if the separating fault is as mapped should offset the sweet spot layer and thus not be in communication with the HH-1 or HH-2z well.

Pboo,

It's unlikely they will flow the Portland in the vertical when they are flowing the horizontal given that they will both be producing from overlapping connected oil in the same sweet spot interval. They were previously keeping the flow rate down partly to:- 'ensure there is no detriment to the expected high performance of the HH-2 Portland horizontal well' so it was recognised then that it would be drawing oil from the same 'pool'......and that was long before HH-2Z was going to be drilled.

If it is the esp then maybe is it just an early delivery for 2Z or maybe they are installing it in the Kimmeridge in HH-1?

Redhead,

I don't have to imagine UKOG keep telling us.

The information we have had over time is that the horizontal could produce (sometimes relative to 362bopd, sometimes relative to an unspecified flow rate of the vertical well) 2 to 3 times, 2 to 3 times or more, 2 times and now the wording since 30 September is 'significantly more than 362bopd'.

and we don't even know if they are target initial test rates or projected initial or sustainable production rates.

So does 'significantly more' indicate more than 1 times but less than 2 times 362 bopd. If it means 2 to 3 times, or even more than 3 times why have they changed the wording? Seems it's similar to 2 to 3 times 220 bopd. Maybe they just don't dare say significantly more than 362bopd to maybe 5 times.

As you say we don't have the data to determine be what the flow of the horizontal might but presumably UKOG have tried and this new wording post dates the change in length of the horizontal.

Applegarth,

why hasn't the market appreciated how good this RNS is? Perhaps this bit of the RNS gives a clue:-

'indicate that the "sweet spot" has likely contributed the lion's share of the 29,568 barrels of Brent quality oil produced to date from Portland extended well testing'

The Nutech CPI of the Portland in the 2018 Xodus CPR has he Nutech generated logs that are effectively 'sweet spot' identifiers on the left and right of the CPI. This zone is also where the water saturation decreases as does clay content, and is the only zone where the gas reading has a strong peak, very low (background) above and dropping rapidly then tailing off below.

If this zone is the sweet spot it's about 12 feet thick so it could be that a lot of the Portland has contributed very little to the ewt in HH-1 suggesting it isn't actually reservoir quality.

Perhaps the variable quality of the Portland has produced a series of intra formational seals which has resulted in the possible deeper OWC - but whether the additional OIP, or a significant amount of the OIP not in the 'sweet spot' layer will actually contribute to the volumes connected to the horizontal and thus available for recovery is an uncertainty.

Uncertainty is not what any major investor wants - but it may be an opportunity for private investors with an appetite for risk.

It's interesting that calculating a volume of oil in the HH block in the 'sweet' layer alone using P10 figures gives a figure within the range of connected Portland oil quoted by UKOG (11 to 14mmbbls) - food for thought.

Troll hunter,

I don't really need to comment about your prediction of 19p in six months given your predicton ability over a much shorter time period of 12.9p by end October.

But a valuation of over a billion in 6 months. Based on what? At best UKOG might have 2 Portland horizontals producing at an as yet unknown rate plus the Kimmeridge vertical well producing at another unknown rate.

Even if they double the OIP for the Portland and then prove they can get 50% of it out, and become 100% owners of HH that may (at $70 oil) have an NPV of about half a billion, and those circumstances are very unlikely in the next six months.

Greed fear,

Bramhill saying a horizontal well might flow 1000 to 1500bopd when the vertical well flows 350 bopd is hardly fact - it's speculation. He doesn't have any details of the specific geology. Nor do we. I would stick to a sensible uplift of the 'prudent' 220 bopd UKOG were prepared to flow the vertical well sustainably at. They want this well to work for up to 20 years so apart from initial rates where the cork might be loosed from the bottle I would expect caution flowing the horizontal.

Judging by previous data releases it will be impossible to translate released flow rates to a value for the Portland (mostly half hour max rates or 'prudent' sustainable rates). That will require the release of a CPR, at least that might appear within six months.

Argus,

Schlumberger may well be the world's largest oilfield services company etc, but it was Nutech that produced the report with 124billion barrels of oil across the Weald, though not all of it was in the Kimmeridge (Nutech Oil in Place Executive Summary 15/10/2015). Schlumberger were meant to be producing a Weald wide report - but never did (see last paragraph of their report 4 June 2015),

JCW - The site visit by FOTH and pals was years ago.