Member Info for Penguins

Redhead,

always accept a challenge.

I'll assume your 1200bopd is correct though it seems to be based on either the Kimmeridge flow improving or the Portland flowing at the high end of UKOG predictions which were until recently 720 to 1080bopd (now expectation is significantly more than 362bopd), it's also repeatedly stated here that during testing production is choked back - and it stops for pbu, workovers etc.

But achieving full production for the whole month of November is very unlikely. As usual posters seem to know better than the company RNS with drilling HH-2 and 2z stated to take 60 days - from September 29th - which I make about 27th November. Then there will be further works to enabled testing to begin. 'Drilling operations are expected to be completed in approximately 60 days'.

and in 8 October RNS the drilling was stated as on schedule so why expect the Portland to be flowing in November?

Otherwise outgoings rather than production lifting costs are more relevant as I would expect testing to be more expensive than costs based on higher production levels from the development. During the HH-1 testing the test income was considerably less than outgoings.

So all I'd say is that based on your figures, but UKOG RNS for the drilling, you are somewhat optimistic to expect £2.6mm positive cashflow from testing Portland and Kimmeridge. Even £1.3mm may be pushing it.

As detailed breakdowns of costs aren't published (though income from test oil is) I suppose we'll never know.

Pboo,

I make production restarting on 28 September to presumably at least last night to be at least 10 days - and note this in the RNS - 'Continuous Kimmeridge oil production from Horse Hill-1 ("HH-1") has been maintained since the start of the Horse Hill-2/2z horizontal drilling campaign on 29 September 2019.'

and whilst the drilling commenced on 29 September HH-1 started : 'test production from the HH-1 Kimmeridge oil pool was restarted on Saturday at initial half hourly rates of between 302-473 bopd.'

So not only has the production been continuous since (and including at least part of 28th September) but it started at say an average of (say) 390 bopd - or maybe Argus thinks even more.

But average production over the period was about 260bopd. Now it doesn't take a genius to work out that if it started at about 390 if the production declined across the whole 10 days it would have ended up at about 130 bopd.

But assuming the higher rates only lasted for a day then the average over the remaining period would be (2595-390)/9 or about 245bopd.

Whatever way you look at it production is averaging at best about 1.2 tankers a day or between 8 and 9 tankers a week.

So trollhunter:- 'We've been at two tankers daily for some time now. I'm expecting 3 or 4 per day as they open up the Kimmeridge'

Really, even the numbers released by UKOG don't add up to 2 tankers a day and the opened up Kimmeridge rate was 473 to 302bopd which looks like it didn't last long - or if it did the current rate is even worse, then it seems to have tailed off while we have been graced with videos showing the pump going at much the same rate.

Wizard,

SS might have said that but if UKOG were fully funded for 2019 with funds from 2018 why did they say in the RNS of 7/8/2019 about the convertible loan:

'The portion of the Loan not utilised in the acquisition will be utilised for the construction of production facilities.'

As they raised £3.5mm in March 2019 that was said to be for a purchase and the latest raise was £5.5mm for £5mm to give to Tellurian obviously they weren't fully funded for 2019 as I make that an extra £4mm raised in 2019, part of which is needed to fund the construction which was timetabled for late 2019 so should already, according to your post, have been fully funded. The additional equity in the licence would not explain the shortfall.

So be careful what you believe as far as future funding is concerned because as far as borrowing is concerned what UKOG put in the RNS was:- 'It is envisaged that Reserves-based debt funding, along with healthy cash-flows will lessen the requirement for further equity raises via share issues to fund our future drilling programme.'

So lessen not stop, and depends on reserves (CPR - maybe early 2020) and 'healthy' cash flows, possible, even probable but not guaranteed.

Trollhunter,

Calling me out - you mean making an unfounded and wrong accusation about another poster - maybe you should consider this is a discussion board, not a room full of echoes. So re your not risking HH-1 as a producer - that was the plan until recently when enthusiasm for the Kimmerdige seemed to wane, and huge profit making before Xmas - well that is debateable as outgoings during testing are also pretty large.

But the number of likes on this board does not make you PC plod for the day and your claims are based on a ridiculous, fabricated, narrative. But perhaps the giveaway is your prediction of 12.9p for end October beginning November - I suppose anything that would suggest that's unlikely is negative in your view -

Oakleak,

they haven't mentioned reperforating HH-1, nor that the current perforations are in any way inadequate . As the conversation is about HH-1 not the currently non-existent Kimmeridge horizontal you mention maybe the 200 to 266bopd is in line with Portland flows. But if you don't think 302 to 473bopd isn't erratic - I do.

& Argus

at least when UKOG give a range I also quote that range (see above) - UKOG RNS:- 'test production from the HH-1 Kimmeridge oil pool was restarted on Saturday at initial half hourly rates of between 302-473 bopd…...'

and you seem to have forgotten to mention it's an initial half hourly rate...…...

Wizard,

CPR first then lending - and I think I have previously mentioned it - my comment from July was probably (I'm not checking but looking at that excerpt - probably) in reply about the situation then regarding available cash to drill more than HH-2 / 2z - I also say if that changes - so what's your point?

and to your second point yes - can you explain why it will change - looking at the limited reveals about flow rates following shut ins (ie initial flow rates) they are so erratic (302 to 473) over a very short period that they surely represent overpumping - the variation is due to how fast the reservoir can deliver into the wellbore not pump rate or chokes. So the 'steadier' states reported (200 to 266bopd) over longer periods probably represent maximums without damaging the reservoir. If only UKOG would give out more data then we could better understand what's going on but I would say that it isn't good news - but then you'd expect that anyway - on the other hand (like at BB) I suspect other posters will say he's playing a blinder hiding fantastic results.

Trollhunter,

I applaud your green credentials - but you are wrong about me. Anyway exactly what was negative that may not be as true as PCS's 1200bopd in several weeks - what is several?

PCS,

I also thought drilling the 2 Portland wells first so have to agree, from July 13:-…..I'm quoting is that HH-1z will be delayed, possibly until after HH-3 has been drilled. One aspect is funding so if that changes then maybe the plan will revert but maybe it is also a need for a lot more Kimmeridge production data.

...and the horizontal at Dunsfold / Loxley is planned to be in the Portland (page 15 of 47 of the Planning Statement).

and if you think the rig isn't leaving after HH-2z then you really haven't understood the RNS.

Maybe you should read back through my posts so you don't have too many surprises.

Wizard,

What will be significantly different to the current completion in the Kimmeridge during 'production' - if all they are doing is carrying on without pause and calling it 'production' then there will be no change.

Wizard ,

Pleased to see you finally realise that the Kimmeridge horizontal won't be for some time, But I don't think the reason is because the flow rate from HH-1z is so fantastic they don't need to drill the horizontal. More likely is that as the HH-1 well costs are sunk the economics of continued production even at a fairly low level from the Kimmeridge are better than risking spending money even on a horizontal sidetrack. Not drilling the horizontal certainly doesn't fit with your assertions about production uplift over a vertical well

I am fascinated by the change in language regarding the Portland horizontal production. Is significantly more then 362 bopd actually more then 2 to 3 times 362bopd, and on occasions when the 2 to 3 times doesn't mention the 362 did they mean 2 to 3 times 220 bopd the vertical wells sustained rate?

PCS,

It depends how accurate the mapping is and then how critical the well placement is as there are better and worse zones in HH-1, and there may be variation away from the well anyway. Core from HH-2 will tie down where they want to be to start with but whilst steering the bit to stay within a specific zone can be done the difference between the zones within a sandstone won't be very obvious from cuttings.
They really should heve acquired a 3D seismic survey (it is in the obligation work programme) to tie down the structure.

Bladehater,

Could you explain how you core with a wireline, or even have wireline in the hole while coring? Maybe you mean LWC (logging while coring) but do you know they have the equipment for that - but they will still need to bring the core to surface which will mean tripping.

27 September:-
104 1.146 2662227 16:08:00 2,662,227

Today (spread was 1.00 to 1.05) same price, same number of shares, 2 consecutive trades:-

85 1.146 2662227 11:57:07 2,662,227
84 1.146 2662227 11:57:04 2,662,227

YA conversion was 27 September:-

The Company has today allotted 37,362,227 new ordinary shares to the Investors ("Investor Shares"). The Investor Shares will rank pari passu in all respects with the existing ordinary shares. It is anticipated that the Investor Shares will be admitted to trading on AIM on or around 3 October 2019 ("Admission").

There seem to be a lot of large trades that are followed the next day by 2 trades of the same size, same price.

eg 30 September:
184 1.1 4000000 1.05 1.1 15:19:04 4,000,000

1st October
38 1.1 4000000 1.05 1.1 09:17:21 4,000,000
37 1.1 4000000 1.05 1.1 09:17:18 4,000,000

Is it just a way of getting the daily trades up?

There's a special rule:-

6.2 Deadline for filing your company’s accounts if you have shortened your account period

When a company shortens its accounting period, the new filing deadline will be the longer of the following two options;

9 months for a private company (or 6 months for a public company) from the new accounting reference date
3 months from the date of receipt of the notice (change of accounting reference date – form AA01)

https://www.gov.uk/government/publications/life-of-a-company-annual-requirements/life-of-a-company-part-1-accounts

So as the notice was 27th September - deadline 27th December?

Red,

if HH-2 and HH-2z don't see oil it would be a massive surprise as HH-1 was more or less vertical down to and through the Portland so the HH-2 pilot hole will be near to HH-1 in the Portland and the Kimmeridge will be penetrated fairly close to HH-1 which is deviated through the Kimmeridge. The Portland horizontal will start close to HH-1 as well.

The placement of HH-2z depends on the accuracy of mapping which is based on fairly sparse old seismic data so there could be risks of encountering unseen faults or the mapping being wrong.

But even with these risks I'd assume the chance of technical success (ie finding oil) is in reality 100%, but then I'd be surprised if seeing oil makes the slightest difference to sentiment (nhawan).

The next thing will be the ewt. There seems to be a certainty that the horizontal will not only flow initially near the top of the range targeted by UKOG (around 1000bopd) but continue to do so for some time. But as I keep getting told ewt's are not necessarily run at maximums or even at quoted long term sustainable rates. There could be issues - finding a water conduit, the well ending up in a less productive zone, or unexpected variation in the reservoir. But unless any of these are catastrophic the well should flow, either with or without esp help, the truly million dollar question is how well.

The CPR will be interesting. The range of recoveries from the first 2018 testing was large and upper limits were dependant on injectors providing full pressure support. It may be that until an injector is drilled either there won't be a CPR or CPR recoveries will be restricted to those not needing pressure support.

There is probably little risk of HH-2 not having commercial flow - but as low flows should be commercial to achieve the sort of valuations even I've made need fairly high flows. The 3500bopd figure often quoted hasn't been split between Kimmeridge and Portland so what UKOG really expects isn't known - significantly more than 362bopd (the latest) could cover 25% more to several times, though if it was 2 to 3 times - which is what's been the previous prediction why not say so.

boo,

I doubt they will be putting 12 1/4 inch casing in a hole drilled with a 12 1/4 bit. Maybe 9 5/8.

When HH-1 was drilled there were 5 days between the RNS for starting and completing the 17 1/2inch hole from surface casing to about 1800ft. In smaller diameter hole should be at 2000ft soon.

stocktaker,

Depends on the VWAP of the next conversion. They made a killing on the first conversion selling during the planning spike. They will want their cash back to lend either to UKOG again (should they trigger another loan) or someone else.

Argus

I make it 14 posts since your first post on this thread.

3 were by robone (I assume), 2 by PCS and jaykay, and one each for Tymers, wizard, seadoc, oilybloke, bobrad, me and tollesbury.

Those trolls do swarm on the board don't they...………………...

Should be ibug (apologies) and the sales were 10th and 11th September....

So maybe an even longer delay, although YA could sell 25,000,000 on the 10th and be pretty sure they would be getting a lot more than that to sell on the 11th.

big,

When the 2017 convertible loan was being worked through the market it was characterised by a final trade that included the non round millions. This was almost always before or just after the conversion it was obviously. part of was RNS'd, despite a no short position RNS

The most recent conversion was RNS'd 27 September (37,362,227) and on that day there was a trade of 2,662,227. Whilst it could be coincidence the previous conversion looks like it was cleared days before it was announced to the market (from 'oilmaster' on twitter):-

https://twitter.com/OilMasterUKOG/status/1177274602055176192/photo/2

this shows 2 trades totalling the 60,926,076 RNS'd on the 16th September being sold on the 11th and 12th September 25,000,000 and 35,926076. How this is possible when the conversion price is meant to be the previous 5 days VWAP to the conversion day (ie if the conversion was actually effected on 16th September they wouldn't know how many would be issued) unless UKOG delayed the announcement 3 working days meaning the conversion was effected on the 11th (there was a weekend in between). This suggests UKOG 'help' YA by delaying the announcement and there is some sort of deal to get round the no short position as UKOG must be well aware these shares are being traded before the 20th September - the date they were meant to be on the market.

If YA are still selling another conversion is in the pipeline.

Ibug,

Assuming the pilot is vertical and the depth of 3000ft is MD/TVDRKB.

The Top KL3 is about 2980ft below ground level (Nutech Portland STOIIP report in 2015 has Top KL3 at 2758ft TVDSS and the ground level 219ft above MSL) - I suspect they will stop when they have drilled (cored?) the KL3.

The Portland is at 1814ft TVDSS so at a depth below surface of 2033ft - so coring below 2000ft will be in the Portland. I hope they are coring the Kimmeridge as well.

Peter, Craig, Scot,

so you see the things I pointed out as negatives?

I see you're hedging your bets on flow rates from the Kimmeridge, blah, blah, blah, chokes, free flow.

Let's hope the 3 times the calculated 362bopd lives up to long term expectations, and not just for the first few days.

Bazy,

rattled, unlike the twitterati who are still suggesting HH-1z will be drilled immediately after HH-2 - it's starting to turn out as I predicted ages ago.

HH-1z Kimmeridge not drilled immediately after HH-2 for technical reasons (and predicting in early July they didn't have the cash anyway to drill HH-1z or any other well and pay for the site upgrade).

Continually releasing deceptive short term usually post shut in rates.

Probably drilling the second Portland well next some time in 2020 - possibly using HH-1 as the donor well.

Tony,

No mention of HH-1z. They plan to put HH-1 on long term production according to the RNS.
What is disgraceful is the inference the 362bopd is anything other than a calculated rate.

'capable of delivering flow rates significantly higher than the previously reported 362 barrels of oil per day ("bopd") from the HH-1 vertical Portland discovery well'.

the only reported 362bopd was described as thus:-
' the calculated* sustainable vertical well rate of 362 bopd derived from the EWT programme.'

and even that has the caveat:-'There can be no absolute guarantee that forecast, targeted or calculated rates of production will be achieved.'

Throw in the initial short term flow rates after a shut in and what have you got...……….a UKOG RNS.

Keep up Wizard.

you really need to understand the different permissions.

Planning permission:-
Amendment of condition no. 1 of planning permission WSCC/032/17/WC to enable the retention of security fencing, gates and cabins for a further 18 months at Woodbarn Farm, Adversane Lane, Broadford Bridge, Billingshurst, West Sussex, RH14 9ED

The fencing, gates and structures hereby approved shall be removed from the site, and the site restored in accordance with the restoration scheme approved under planning permission WSCC/032/18/WC either;
a) on or before the period ending 31 March 2020; or
b) within 3 months of the cessation of the operations and need of the site whichever occurs soonest.

The licence may be in the third term. Makes no difference to the planning permission for the site.

So to answer my question which you didn't answer, planning permission to retain the site ends 31 March 2020.

If you actually read my posts I think you'll find you've fallen into the trap of thinking that posts like this:

'every good RNS he will pick fault and if there is no fault will make one up or try and bend the truth, everyone hates him, I think he must have been bullied at school'

have any basis in fact.

There's a disparity between what happens almost every time a 'good' RNS is published and what happens in the market.

This results in the wringing of hands and gnashing of teeth on here and twitter that the 'good' RNS hasn't rerated the SP and in fact it's gone down - perhaps it's not me that is 'twisting' the facts.

No problem with SS or UKOG - at least I give reasons for my opinions which are often 'challenged' by posts like leewaynes. I hope the SP will rise - but not to the unjustified schedules often quoted on here and twitter.

Passiton you said:- 'according to stuff I was just reading about planned not just UKOG oil developments IOW on/offshore mostly referred to as Portland plays.

Quoting an article about the geology of the IOW is not a company planning Portland development.

enough time spent here today.

Passiton,

As I thought - just made it up and get aggressive when you're caught out.

There are no other licences extant currently on the IOW or offshore except the one operated by UKOG so no other company can have any plans. This might help, licensed areas in yellow:-

https://dataogauthority.blob.core.windows.net/external/quadmaps/Q_98.pdf