Member Info for Penguins

Passiton,

I'd stick to the gardening.

that's a 'greenie' article from 2015, doesn't mention any plans or even the Portland or Oolites. Name what companies and their targets and their plans and where you read it ...…..as you said 'I was just reading about planned not just UKOG oil developments IOW on/offshore mostly referred to as Portland plays'.

Now:- 'a couple of the IOW articles also mentioned presence of Great Oolite layer' - ?

Vanghelis,

I get the gist, you think I am against O&G exploration and development - you're so wrong.

Claiming I'm Ruth is just childish. Unfortunately that sets the bias of your post.

Passiton et al,

I'm not spending all day responding but just this once.

Tony named a couple of fields that weren't Portland the reservoirs are detailed on the Southampton Uni site ( http://www.southampton.ac.uk/~imw/Petroleum-Geology-Weald-Shale.htm), if you think the Portland is a play in the southern Weald - fair enough, I don't, the Great Oolite is below the Portland so at least those fields would have had the opportunity to test the Portland.

As for the IOW Arretons they are not in the Weald Basin they are in a different Basin ie different depositonal and structural evolution.

But Arreton 2 failed to get the Portland to flow (DST 1 to 3 results on Arreton-2 Composite Log Header available at UKOGL:- https://ukogl.org.uk/map/php/images.php?subfolder=wells\compositeLogHeader&filename=1905-clh.jpg), not sure they even tried in Arreton-1 though it was drilled in 1952.

and if you are going to quote oil developments what, apart from Arreton, IOW onshore / offshore Portland developments are there?

Suggest if you're going to make statements you at least do a bit of research and quote it to back your statements up.

and Wizard,

brilliant...…. 'apart from the flow rates at BB not being commercial for the stated reasons everything else was successful'

I couldn't have condemned it any better myself.................well those stated reasons have yet to be tested as valid or even surmountable. When does current planning just to retain the site expire?

Tony,

seems you're the one flapping.

Storrington's reservoir is Great Oolite as is Stockbridge. I don't think the Portland is a play in the South part of the Weald Basin.

Apart from listing other non Portland fields (even if they were Portland why are they relevant to the Kimmeridge transformational play of national importance) what is your point?

JPT,

The strategy is not mad but it may be wrong. Grabbing acreage before a play is proved is great but only if the play works. So far the Kimmeridge has failed. to flow significant volumes away from HH despite 4 other sites (Brockham, Balcombe, Broadford Bridge and Lidsey) being identified as potential tests in the Weald.

One of the favourite reasons for some posters to claim that the Broadford Bridge test would be successful in 2016 / 2017 was that UKOG wouldn't continue to spend money on it if it wasn't going to be successful. Although apparently they learnt a lot from that test so far they haven't even applied for planning to drill another well there, preferring to drill elsewhere in the licence (Dunsfold).

Nothing is guaranteed until a site is tested, and the value put on Tellurians 35% equity suggests a very low value is attached to the acreage outside of HH.

As for the next 50 days (have they been drilling for 10 days already) being transformational - why - they have said they are logging and coring the Kimmeridge but finding oil and fractures throughout the Kimmeridge is expected, anything less though would be a disaster. I would hope they also spend some time if not flowing the Kimmeridge in HH-2 at least performing some interference tests between HH-1 and HH-2.

Otherwise the test is of the Portland, the ewt should firm up some reserves by way of a CPR hopefully early 2020 but the Portland is not the nationally significant, transformational play.

bladehater,

The first conversion was based on a price that spanned the planning permission and despite the shares theoretically not being traded until 20th September they were probably sold 10th and 11th September - there's a tweet showing the 2 trades here (thanks to 'oilmaster'):-

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

They made a pretty good profit on a sales of 25,000,000 (1.262p) and 35,926076 (1.275p).

Looks like today the last of todays conversion got sold - 2,662,227 Today's conversion 37,362,227 meant to be traded from 3 October!

Maybe they've done a deal with Tellurian to cover their non-short position?

Ocelot, I said some not all - eg anyone with an average above 1.82p.

Try the 2018 Annual Report and Accounts it has a list of options as of then, page 65.

On page 65 the expiry dat of the 35mm is stated as 28 September, one page earlier they (lumped in with 10mm consultants options also listed on page 65 - so the 45mm options granted during that financial year) are listed as expiring 26 September 2019. Either have or about to expire. Don't worry the company will look after him. I expect quite a few posters would happily swap their shares for options they don't have to pay for until the price is above 1.82p.

Wizard,

if it were that simple UKOG could fire Xodus drill a well of 2km and start flowing over 4000bopd. Petroleum engineering is not a field of my 'enthusiasm' (as I've posted before). Its a very complex subject and predicting reservoir and well performance requires ever more sophisticated modelling software. 'Thinking' it might be better I don't think is in the toolbox.

Whilst there is reluctance to produce an actual CPR (I know, blah blah blah - they're waiting for the horizontal results) they will have produced a shed load of modelling already from the results so far for both Portland and Kimmeridge. This modelling is required to understand what tests to perform from HH-1. They will also have had to determine where to place HH-2z so I would be surprised if actual initial production (not testing) performance wasn't within guidelines.

I suppose we're in for a period of RNS, followed by posts and tweets exhorting surprise and delight that the well has spudded (they bought a rig on site and they are actually going to start drilling - with barite as well I've seen the sacks, yippee), Portland has oil in it, the Kimmeridge has oil and fractures and the Portland horizontal is long (1000m wow) and full of oil, followed by an initial flow test - which will need to exceed well over 1000bopd if well performance down the line from the current tests is anything to go by).

Greedfear,

Not sure if you have included costs in your NPV or are you assuming all 2020 well costs (£15mm) are paid for by placings as loans would also appear as an expense over payback time. Your lower than stated production in 2020 (spreadsheet ave 1750 whereas side note 2000bopd H1 & 3500bopd H2 = ave 2750) might offset this.

Also lifting costs per barrel will increase as production decreases, but that will be minor.

I'd also suggest your flat production over the time periods definitely doesn't reflect a decline in production over 2 (should be 12 down to at most 9 tankers) and then 4 years (8 down to at most 5 tankers). Using maximums throughout each period does seem a little biased. As decline and drill costs are early years they will have much higher impact than the later years income omitted.

What risk to apply to UKOG achieving these predicted production figures?

My 20 September post came to an unrisked value from quoted recoveries and NPV per barrel of between 1.5p and 3.8p per share (6.75billion shares). So your 2.3p per share (6.75 billion shares after YA £5.5mm converted) is about mid that.

Greedfear,

please remember that the tanker limits are maximums, during each period they will drop - and not the day before the next period. Production decline is a continuous process. If you don't believe this you should also review the gas production decline in the Local Air Quality Horse Hill report in the application which shows the continuous nature of decline.

The decline will also continue during the final period - the field won't stop being operated suddenly at 440 bopd, probably nearer 50bopd or less so nearer 2 or less tankers a week towards the 20 year mark.

There's also this bit of information:
RNS 5 October 2018:-

'Average HGV movements during the plan's 20-year field production life are estimated to total three per day.'

So when you have built your spreadsheet with proper decline rates total tankers should be no more than 3x365x20 and total oil produced 215 (the volume usually carried by each tanker) times that. To help that's just under 22,000 tankers, and just under 5mmbbls. If the average is based on 3 tankers 6 days a week then it will be less.

If you choose to ignore this data then you are ignoring the only firm information available on the likely performance at HH - ie just making stuff up.

Many posters work on the basis that UKOG are being conservative - that would be a first for AIM. If anything experience shows they have been somewhat ambitious with time targets and happily use initial maximum flow rates rather than long term actual rates after these initial bursts in RNS, and hide erratic, or perhaps declining production in averages, or just publishing gross production figures with no information as to how many days the well was flowing.

In the application for the development in the App G Transport Horse Hill report they stress that the tanker movements in excess of the 10 previously allowed are for a very short period. Going back to ask for more having done this would not be very smart

Groover,

the MMs know is that YA have a bunch of shares they bought for 0.98p and are happy to sell through them for not much more than that.

To sell that many needs lots of (pi) buyers and not so many (pi) sellers so they keep the price at a point to achieve that.

Surprisingly I'm in agreement with Rodders that despite the price suggesting the 8,500,000 trade is a buy it's a sell, there were plenty of buys above 1.134p for the MMs to make a profit, although it would suit certain posters to call it a buy.

Tony,

124BBO total OIP in the 2015 Nutech Weald report.

Of which about 82BBO OIP is in the Kimmeridge, the remainder in Oxford and Lias Clays.

Porosity in the Kimmeridge is about 10% - but with only oil produced it looks like the only connected oil comes from oil in the fractures as the micrites have a calculated approx. 50% water saturation so it's hiding somewhere..

Fracture porosity can be very low (fractions of a percent) but say it’s 2%, so 8% matrix porosity.

In the shales no water is calculated so it’s easy, except the lowest (below KL2) and highest shales (above KL4) don’t appear to be very fractured (BRX4Z log analysis) they are also those most remote from the KL3 which appears to be the horizontal target of choice. So 43 BBO with no connected oil. The remaining shales have 19BBO so oil in the fractures at 2% is about 4BBO.

The micrites are more difficult because of the 50% water saturation so in all 3 micrites that’s a total of 19BBO (oil) and 19BBW (water). Assuming all the water is within the rock matrix and not the fractures (as virtually none has been produced) means in 8% of the porosity there’s 19BBW and 11BBO, with about 8BBO of oil in the fractures.

So possible connected oil assuming production only from KL2 to KL4 and the shales between totals 12BBO.

That is for the whole of the Weald (1260 sq miles). For the whole 55 sq miles of the HH 2 licences that gives connected oil of about 550mmbbls, with analogue normal recovery of 3% to 8% gives 16.5mmbbls to 44mmbbls recoverable from the whole licence area.

It's all about where that OIP is, not the total.

AD*FN on the 'most recent streaming' page has given times for the 13 trades.

They are now spread across the day (from 08:04:59, trade 303, to 15:27:47 trade 291) and each trade is paired with another of exactly the same size within a second of the same time.

Also despite the very different prices across the 13 trades the value is nearly identical to the single trade of 12,200,000 and the difference (about £24) may be due to some pricesbeing rounded.

go figure.

Legalease.

The BB well would have appeared to have 'proved' the Kimmeridge across the Weald if it had been successful. UKOG made a series of announcements that all was looking great, the SP rose. When the bad news started leaking out the SP retreated.

HH2 / 2z is appraising an already identified feature and SS has even suggested a basis for valuing it and possible flow rates - and the SP already has a fair bit of this value in it.

I usually just ignore your ramblings but really...… 'Here you go Pingu. More YA selling' with a screen capture showing the late big trades yesterday and today.

I presume you must be referring to this in my post yesterday at 13:06:- 'I don't see any sign YA / Riverfort are selling today, yet. I would expect to see some large sells (around 5mm shares plus).'

So firstly I make the point that before then there were no particularly large sells ' I don't see any sign...……, yet'. Then I point out that I'd expect their sells to be 5mm plus.

So your 2 tweets identifying a 6.5mm trade yesterday and a 12,200,000 trade today were unnecessary, but thanks anyway.

So did you notice the red figures at the top of your screengrab - and perhaps more interesting was that the 13 reported trades before the 12,200,000 trade also added up to 12,200,000.

Great news?

60 days until the horizontal test might begin and then Dunsfold/Loxley planning delayed until November, and no sign of HH-1z being drilled, well not into the (transformational nationally important) Kimmeridge, for some time ...…..

Kimmeridge producing up to 307bopd daily but flowed an average over 11 days of about 240bopd, so either shutting in to get the rate or unstable flow rates.

Still £2.4mm to be converted by YA / Riverfort, £3mm of shares given to Tellurian to sell and the possibility of previous placing and shares for equity still around in non-sticky hands (though reading posts you'd there were only the 60mm YA shares already converted to be sold). Then from 16 November YA/Riverfort can convert another £2.5mm, and before 31 December another £3mm in shares to Tellurian.

Of course the rig has arrived on site (unexpectedly!) months later than some predicted and finally announced to be before end September - as if that didn't enable traders to jump on / jump off the train with their golden tickets, choo choo.

Everest,

Don't believe the published buys / sells.

I don't see any sign YA / Riverfort are selling today, yet. I would expect to see some large sells (around 5mm shares plus), 1-2mm is just pi action. Given the volume so far they could dispose of over 10mm but given how opaque the buys vs sells are today it would be hard to tell if there is that much imbalance for them to fill.

The reason they sell is to get the cash back asap.

They also have a maximum conversion price - which is based on 130% of the VWAP (though over what period wasn't stated but may be the same as the conversion VWAP - 5 days) when the loan was drawndown on 16 August.

Got this from another post:-

It is a socket timeout issue - either type fast and post or type slowly and copy your post before posting. then you can post again by pasting and break the speed rules.

The company tweeted that picture (on 20th September), Teahan Convoi Service, said it was going to Southampton.

They've removed the picture from their feed......

Basing a valuation on P/E on the starting 3500 bopd is strange given the planning application states that this will drop to 75% of that in 4 months. Even the 2000bopd will be passed through at the end of the second year with only 8 tankers (1720bopd) and declining after 28 months.

Whilst we wait for a CPR the best indication of value is NPV based on SS and UKOG figures.

For the Portland the November 2018 Corporate Presentation (slide 18) gives a recovery between 10% and 45% for the Portland at HH. Assuming the 2 wells connect to the whole OIP of 30mmbbls (rather than 22 to 28mmbbls connected oil recently stated) this gives a recoverable of 3mmbbls to 13.5mmbbls. The only recoverable figure for Kimmeridge is 1mmbbls per well – so 4mmbbls for HH.

SS gave figures of £15 to £18 per barrel for Portland and £15 to £20 for Kimmeridge so assuming an approximate mid price for both then say £17 per barrel gives a 100% value between £119mm (7mmbbls) and £297.5mm (17.5mmbbls) so 86% is £102 to £255mm = 1.5p to 3.8p per share (assumes 6,750,000,000 shares), but these are based on these two wells contacting all the Portland OIP.

Once (if) any of the other sites successfully prove oil then the HH decline could be replaced by production elsewhere - until CPRs everything is uncertain.

Legalease,

you need to look at that video. There's only one pump. I suppose FOTH has mistaken the wavering of the camera for the fixed rod moving.

7 tankers for 7 days production (the Kimmeridge ewt recommenced prior to the 12/9 7:00 am RNS) isn't 400bopd.

But I suppose common sense vs ramping makes me one of Peter, Craig or Scots disgruntled locals or swampies.