Member Info for Penguins

Mirasol,

The rig will leave the site.

Dunsfold planning may have been passed by the time drilling is complete but site prep will take weeks with membranes, bunds, drill pad and EA inspections, the access road may be upgraded but the rest needs planning permission. Arreton planning hasn't even been submitted, nor BB -1Y. HH-1z is the only game in town (as the cellars aren't constructed for HH-3 to 7) and unless there is another u-turn that's been kicked into the long grass.

As UKOG hasn't specifically mentioned the plan has changed I would assume it's not a good reason such as the vertical well could flow 1000bopd from the Kimmeridge sustainably (or even initially). A while ago I suggested it could be to build up cash as the testing and other operations were clearly draining cash at an alarming rate despite the oil sales, that could be part of the reason as long as the ewt actually generates more income than expenditure.

Wizard,

I would reread the 7 August 2019 RNS though rather than something from 2018 to get a feel for the funding position.

This states money for HH-2 / 2Z had been ring fenced. Some (a lot?) of the £5.5mm convertible loan was needed to pay Tellurian's £5mm (despite having raised £5.5mm for new ventures etc. previously and only spent a bit of it on equity purchases) and the remainder needed for all the work to bring the field into long term production which in the short term seems to be HH-2Z and HH-1 (RNS 15 October 2019):- 'both HH-2z Portland and the HH-1 Kimmeridge well are expected to be put into long term production by the end of 2019.').

All the wells drilled by Q1 2020?

and you still persist in stating that there will be no decline once production has dropped to about 400bopd in year 11. As that is obviously commercial why are they planning to stop after 20 years - could it be that in fact production is predicted to have dropped to a sub-commercial level by then?

Wizard one day maybe you will understand the difference between connected oil, OIP and recoverable oil (which is a percentage between 10 and 45% of connected oil - SS used 30%) so between 3.3 and 4.2 mmbls per well (2 wells 6.6 to 8.4mmbbls).

As for the Kimmeridge I'll leave you to ponder why UKOG put this in the Dunsfold aplication:- 'Flow tests and pressure data from the Broadford Bridge and Horse Hill Wells Sites have been sub-commercial'.

Until UKOG unequivocally declare the Kimmeridge commercial I'll leave it as not proven.

Wizard,

one day you might realise this isn't about winning or losing anything on this board - just understanding what's going on and what might happen.

As far as the Portland is concerned when have I said that it isn't commercial, so no change there?

So far things are turning out much as expected so calm down and I'd think before posting something like this:- ' the 140 million year old ammonites found in the Portland coreing leads to the conclusion be that if the Portland oil is old & mature enough to flow the Kimmeridge should be even more so'

that just doesn't make sense - the Portland oil is sourced from the Kimmeridge (just underneath it) and the age of the Portland is a known fact, and the Portland and Kimmeridge reservoirs are completely different.

as for your earlier post 'After 1 maybe 2 Portland wells are sidetracked by for the Portland CPR.'

maybe read the 11 September RNS:- 'It is planned to commission a new Competent Persons Report to establish the Company's net Reserves following completion of HH-2z production testing in the Autumn.'

But as I'm sure you're well aware what UKOG say, and what UKOG do are often completely different things.

Order got messed up:-

Oil in core - check.

Sweet spot confirmed - check - Looking at the NuTech CPI in the Xodus CPR for HH Portland I would be surprised if it wasn't the interval with high gas readings and high calculated permeability between about 1860 and 1874ftTVDSS.

Possibly a deeper OWC - somewhere in the 4th core (2260 to 2320ft MD - about 2016 to 2076ft TVDSS) - check.

So all good for the Portland.

Oil in core - check.
Sweet spot confirmed - check
Possibly a deeper OWC - somewhere in the 4th core (2260 to 2320ft MD - about 2016 to 2076ft TVDSS) - check.

Looking at the NuTech CPI in the Xodus CPR for HH Portland I would be surprised if it wasn't the interval with high gas readings and high calculated permeability between about 1860 and 1874ftTVDSS.

So all good for the Portland.

But the valuations being bandied about depend on the Kimmeridge producing from multiple horizontals proving at least it is a success at HH, more OIP the Portland from a deeper OWC may not translate to greater reserves to replace what might be missing from the Kimmeridge at HH (or expectation across the rest of the Weald).

In June the intention to drill through the Kimmeridge for data was RNS'd - was this just a way of softening the blow of admitting that the HH-1 Kimmeridge sidetrack would not be drilled immediately after HH-2 and possibly after HH-3.

28 June 2019:- 'In order to confirm the best HH-1z horizontal well orientation able to intersect the maximum number of open oil-filled Kimmeridge natural fractures, the HH-2 vertical pilot hole will be deepened into the Kimmeridge to obtain key fracture imaging and rock data.'

Then never mentioned again.

So what is the forward plan for the Kimmeridge beyond continuing to produce from HH-1? It's obvious the significantly higher short term initial flows after any shut-in can't be maintained, dropping off dramatically, and the lack of clearly communicated changes in the forward plan don't provide any comfort that the Kimmeridge remains a target for multiple horizontal wells.

Been out today but had a look in......

Does nobody read the RNS.

The well was cased down to 2019ft. Then they were going to drill a short section to 2049 ft and then drill 3 (now 4) 60ft cores. So actually that would make if all 4 x 60ft was obtained 2289ft. It was just over 2300ft anyway. As I've already pointed out the previous 3 x 60ft cores wouldn't actually have obtained core down to the maximum OWC envisaged in the 2018 CPR. If this wasn't a mistake then putting the 8 1/2" bit back in the hole to drill 20ft more for the logging tool to get data over the whole cored section wouldn't be unusual (what else would they do?). FOTH (who mistakenly thinks I make a mistake when I point out something positive) says it should cut the time before starting the ewt of HH-2z, but sacrificing the data over the Kimmeridge seems a poor trade off given the supposed importance of the Kimmeridge.

If only UKOG would be clearer in their communications (or we could be sure they checked them properly) then we could be certain either way. Of course the 8/10 RNS didn't mention the Kimmeridge section being drilled either:- 'Following the coring programme, designed primarily to acquire key technical data that will ensure the 1000m HH-2z horizontal section is correctly positioned within the Portland's most oil-productive zone, the well will drill ahead to total depth, be electric logged and then plugged back to the "kick-off" point, delineating the start of HH-2z's planned 1000m horizontal trajectory. HH-2z will follow directly afterwards.'

As for the Fawley - Heathrow pipeline renewal - it seems to be raised every time certain posters (and tweeters) get nervous. The nearest this gets to HH is over 20km as the crow flies and it's unlikely they would be keen to try and add an extra pipe to the planning permission (for crude oil) already granted - given the rate of progress at HH the pipeline will probably be finished before UKOG even get to a fraction of the production needed to support the cost of (or volume needed for) a pipeline.

Bladehater,

Please point out where I've said that the Portland wasn't commercial - so what do you base this statement on:- 'Assuming the share is as bad as Penguins keeps pointing out, then we are never going to be commercial.'

Sadly falling into the trap of putting words into my posts. So your next sentence is somewhat ridiculous.

You should read back through UKOG RNS (and maybe even back through this thread) - they've said the Portland was commercial based on the vertical well's performance during the testing - sadly no similar RNS for the Kimmeridge during testing - but when SS was waxing lyrical about how confident he was with BB I'm pretty sure I said the Kimmeridge was looking good.

and to save wizard a post - I know about the statement about 'commercially viable' - not quite the same as sticking out an RNS saying the Kimmeridge is commercial (I won't bother to repost the Dunsfold application's statement about the Kimmeridge at HH and BB).

Argus - how many weeks?

Wizard,

I don't think there's any irony in my post.

I was invested for the Kimmeridge - but that seems to be fast disappearing (but not disappeared completely) so if the worst happens hopefully the Portland will rescue the SP - as for planning, that was put in last year - the first sign that HH-1z was delayed was June 2019. If there were any problems it's easier to let the planning carry on once it got to committee, and anyway maybe they'll use some of those wells for Portland - perhaps that was always a backup plan- and now the OIP might rise (though it might not).

Maybe they do only 'need' 2 Portland wells but they could sacrifice well interference to accelerate recovery.

Oakleak what about this - 27 April 14:36 (a repeat of a March post):- 'I have nearly 2 million shares in UKOG'. Every now and then I reply to the question but not every time I'm asked.

Bladehater,

Firstly note I call it a gamble.

But I'm not constantly negative - my views are reasonable opinion based on RNS and statements by SS - others seem to only take the most positive read of these which isn't a good idea - many of the things I've pointed out from RNS and then been criticised for have come true, some are still to be tested. Even on twitter I'm criticised for taking a scalpel to RNS - but that's precisely what everyone should do - without those rosy tinted glasses on - they're written to convey information - but the bad news often not so clearly. I presume you do think the Portland will support a higher SP so I'm not so mad.

Leewayne illustrates the blinkered optimism that every RNS is good and it's the market (and me) that's got it wrong. If something smells it's not me that's full of sh*t as he so delightfully puts it.

Wizard, really last reply so please don't ask for one - don't rely on a gannt chart that has the first Kimmeridge horizontal planned for Q2 2019 to 'prove' the Kimmeridge is 'happening'. Until there's something distinctly positive said about the Kimmeridge in a future RNS I'll stick with my view that it's unlikely beyond HH-1. Things do change - but they've been testing the Kimmeridge for a long time now so should have a pretty good idea of what it's capable of.

PS if they drill a horizontal at Dunsfold its planned to be in the Portland.

bladehater,

are you saying that the Portland at HH alone won't support an SP above the current level, but I am coming round to the opinion that the Kimmeridge's last rites are slowly being read RNS by RNS.

So wizard, Portland CPR Q1 2020, Kimmeridge CPR may depend on viability, possibly never.

Q&A over

Wizard,

In June this was the reason:- we have assessed that, for risk mitigation purposes, we now plan that the Kimmeridge development, commencing with HH-1z, will likely follow the start of full scale Portland production from Horse Hill.

Is that good enough for you. So it's not to generate cash - and even that's changed as now HH-1 will also be put on long term production when surely once HH-2z is flowing the cashflow will be exponential and borrowing on the fantastic CPR easy so pausing HH-1 for a side-track to produce 2 to 3 times the vertical rate would not be a financial issue.

As for higher rates from the Kimmeridge the equipment is the same as produced initial half hour rates of up to 473bopd and down to 302bopd. The recent average rate, which includes these higher rates, during continuous production was about 260 bopd. If the well in it's current configuration was capable of production at these higher rates the equipment is obviously able to cope with why would UKOG stop it?

Everything else until proven is fantasy oil company, you can put what value you like on it, but look at the SP for what the market thinks.

and no it's not schadenfreude or bitterness - I would also like the Kimmeridge to be productive everywhere and every other prospect to succeed but experience suggest otherwise.

Perhaps I should have been more specific - what hasn't been mentioned since 2016 is the fracturing in the Portland.

If you look at my first full paragraph I already establish both Portland and Kimmeridge are flowing only oil.

Interesting.

Both Portland and Kimmeridge micrites are said to have about 50% water saturation throughout.

The mechanism for the Portland's ability to flow only oil was a puzzle in the 2018 CPR. In the Kimmeridge it seems likely the water is stuck in the matrix with only oil in the fractures being produced - at some point the reservoir pressure should (might?) drop sufficiently to persuade water come out.

But in the 21 March 2016 RNS:- 'Nutech will now reinvestigate the presence of significant natural fracturing and oil in place figures for both the Portland and Kimmeridge units given that all flow periods produced 100% dry oil.'

It has never been mentioned since then.

Also despite fairly poor permeability (average 2md - Xodus 2018 CPR) and poor porosity (12% to15% P90 / P10) the Portland flowed exceptionally well:- 'The final Portland test of 323 bopd, over an 8.5-hour, period is the highest stable dry oil flow rate from any onshore UK Portland well.'

So we await the core analysis - if the Portland is also producing from fractures it makes water injection interesting.

Seadoc - the Portland and Kimmeridge should be separated by an impermeable layer - the uppermost Kimmeridge shale - so injecting water into the Portland shouldn't affect the Kimmeridge.

Dodge,

Every now and then I'll reply to the 'have you any shares' question - and today's a slow, wet, day at the pizza restaurant so your 'lucky' day - and the answer is always yes - and why would I lie, unless you believe the ridiculous narrative on twitter and copied here (by, for example, oilboil). As for insults I've put up with them since telling BDI the £1 party couldn't happen in 2017 (or ever) and why, I suspect he still thinks I'm wrong.

I've had shares since July 2015 and like many have bought and sold for profit and loss but don't go on about it keeping to technical topics not what I'd like the SP to be. Currently 2million shares in a SIPP and ISA, average about1.5p (currently about £10,000 down on a £30,000 bet - but doesn't take into account past gains/losses) so haven't always gambled with my head, and dabbled in Angus but failed to follow my head (again) so made some, lost more stuck with a few at 5p. Also bought and sold UJO (now out, might buy back in) though not bottom to top - but did OK.

Entry price depends on sentiment and fundamentals - but I wouldn't be surprised if it drops below 1p during the lull in real information before the 2z flow test though 1p does seem to be a bottom - but I don't want any more thanks, and as UKOG is mostly sentiment driven a sudden spike is always possible, so not worth selling either unless I spot something dire in an RNS - today's, if the 2300ft is correct and not a mistake, is a negative for the Kimmeridge, but at worst OK and possibly good for the Portland.

The reasons I post 1) challenging posters fantasy with at least company generated fantasy) - 2) it's something I know about so I can - 3) it's because I've probably become more interested in the outcome than making a profit on the shares I hold.

Enough Q&A

Dodge,

8/10 RNS - just noticed no mention of Kimmeridge drilling in HH-2 pilot - just drilling to TD. Otherwise the good news is no problems

9/10 RNS - Seems to be over egging putting a steel cage around the HH-1 pump. Usual opaque mention of produced Kimmeridge oil, no current bopd.
11/10 - more confusion. A possibly related company says the OWC might be significantly (they like that word) deeper - hmmm. They RNS'd the Apex connection - no mention of giving a contract to this company so maybe a different Allen Howard(?). Again where's the mention of the Kimmeridge pilot? absence of which ties with the new TD though still might be a mistake?

So drilling and coring going fine so that's good, not sure whether or not they plan to further investigate the Kimmeridge (if not why not say outright?) and the Kimmeridge is still flowing - but at what rate? Might be a deeper OWC so that would be good if proven but need the core to check and would change OIP but perhaps not contacted oil per well as all testing has been with whatever the OWC actually is - not what UKOG think it is.

The third core wouldn't have cored down to the max depth of 2000ft of closure (in Xodus CPR 2018, 2000ft TVDSS = ca 2244ftMD) anyway as that would be at 2229ftMD

Lots of ifs and mays - more and more a CPR is needed.

Dodge - may be deeper, not fact.

PCS - yes they will kick off above the top of the Portland, how far is dependant on a lot of factors including where in the Portland they want to land the horizontal. As for increase in OIP (not reserves) it depends on the mechanism of closure but because of shape factor the increase could be double or more - but it doesn't say the OWC is 60ft deeper, just the core will be - and they might as well do a complete core once it's drilling ahead.

Whilst it may well be a mistake the lack of the previous statement about the drilling below the Portland about logging the Kimmeridge suggests it might not be.

Ibug - HH-1 MDs are probably not right for HH-2 in the Kimmeridge as HH-1 is significantly deviated below the Portland. The target TD of 3000ft (if the 2300ft was a mistake) ties better with the TVDRT of the Kimm micrite 2 (KL3) in HH-1 which is 2985ft.

Oily bloke,

If there isn't a correction I would think that this RNS is a classic case of an obtuse announcement of bad news - drilling only a rathhole below the Portland to enable the logging tools to log the entire cored section and by implication not drilling the Kimmeridge for more information - being buried in goodish news (though the if and may makes it uncertain - need that extra core). Though of course UKOG wouldn't do that would they?

So wake up and smell the coffee. It's been pretty obvious for a long time the Kimmeridge (despite ever more desperate pumping of high initial rates after shut ins) is becoming less and less of a primary (of national importance - when was that phrase last used anyway) target and now we have a primary target that's more of local importance.

But let's see if this is a mistake, even if it is the Kimmeridge has over time looked more and more sidelined which means that reserves for UKOG may never reach the astronomical heights predicted here and on twitter.

And Wizard how many months have I been posting that HH-1Z wasn't happening immediately (maybe never now) after HH-2/2Z.

So either they've made a mistake or they aren't drilling the Kimmeridge as 2300ft is basically the base of the coring, not the 3000 ft they were previously drilling to.

Probably a mistake, but while they are promoting a possible increase in the depth of the Portland OWC, which has interesting implications regarding the trapping mechanism, the Kimeridge seems to be ignored. It wouldn't have been much effort to mention the current production from it?

…..and the trade today 1,946,992 and the trade on Tuesday 1 ,946,992.

Seems YA is up to some games

Does no one see the coincidence:-

The Company has today allotted 16,346,992 shares...….