Member Info for Penguins

Argus,

If you had read my post not only have I included the whole of the 600ft but also the shales above the KL4 (I only deducted the shales below the KL2), I didn't deduct the oil in the shale above the KL4, about another eighth of the total.

From the RNS - '600ft (200m) or more naturally fractured zone, extending from the deeper KL2 to at least the top of the KL4 zone.'

So not shouldhavdone's 12BBO but nearer 2.5BBO (P50) in the 600 foot of Kimmeridge - and how much of the 55 square miles this is spread across lies adjacent and on trend to Brockham? These figures are derived from the Schlumberger report and the RNS of 18 June 2015.

Although they now realise that the oil is being produced from a 600ft zone it isn't just since this was realised that this has been happening - it will have been a factor in every KL test and any analysis thereof.

Nutech did a similar OIP study for HH, and they also did a study of Brockham for Doriemus which had only slightly less OIP in the Kimmeridge at Brockham than the HH figures.

It is becoming clear that the existence of significant volumes of oil in the Kimmeridge in the Weald calculated by Nutech or anyone else is not an indicator of whether or not it is recoverable, even at HH they are performing more testing and gathering more data for the Kimmeridge prior to the HH-1z sidetrack to 'mitigate risk', so even at HH there is uncertainty.

I'd take the wise words of FOTH, with minor modifications as this from one of his 'helpful' posts about UJO:-

'Its always best to look at the risk as well as the blatant ramping on any lse bb. Nothing is a dead cert although reading the BS you'd thing it is.'

Mirasol,

this is what was written.

Once the final Oil and Gas Authority ("OGA") drilling approval is granted and the rig has completed its prior commitments to other parties.....

The OGA approval will be for the final drilling plan, quite standard - but not a site visit, that as you say is HSE, they expect OGA approval before the rig is on site.

Shouldhave done,

It was actually just over 9.2 BBO (P50 - 18 June 2015 RNS) of which just over 5.2BBO was in the Kimmeridge across the 55 square miles of both licences PEDL 137 and 246 that comprise the Horsehill licences.

In their assessment of HH-1 (Schumberger report of 4 June 2015 which had 2 pages of caveats) about a third of that was in the shales below KL2. What might be recoverable from the remaining total is still a mystery and will take many sites and wells to access, much of the area is to the north of HH and might be analogous to Brockham.

'The purpose of this work is to implement a logging program to locate the water interval, re-perforate a small section of the formation, and then isolate the water bearing section with a new completion design. No testing will be undertaken in this proposed operation.'

Sorry I really think you should look at the whole sentence - and understand what operation there will be no testing during.

This work is the preparatory work you describe, not the flow testing.

If Angus stated elsewhere that testing would follow this operation then that would be outwith the operation described.

I don't doubt that you and others are furious with Angus but I wouldn't bother to cite this letter as evidence they knew they would not test in March.

You are joking.

Of course there would be no flow testing during the operations described in that letter. They were perforating and recompleting the well.

I keep seeing this business about the March 29 letter.

I presume you are assuming a decision to suspend a well is the same as abandoning it. Suspending a well is just that - it's done when you are temporarily stopping work on a well - perhaps while the company is deciding what to do next having recompleted the well. This was in a letter to the OGA where Angus were describing the reperforating and recompleting the well - and then suspending the well, why would the next operation be to do nothing more importantly why would the OGA agree to it?

If anyone is depending on that statement to prove the company had no intention to perform any further operations - good luck with that.

Argus,

Apologies, I was looking at the wrong 3 consecutive trades that were a bit less than 5 million and took longer than a minute. I must be more careful reading your posts, as you should be reading others.

I know you posted the highest closing price but brocal's original post, said highest SP was in July which is correct which you responded to with the highest closing price which was in September - I did refer to the fact the closing price that day was not as high ('just didn't close that high') but in the context of Brocal's post you were wrong.

As for you posting the ask could rise, well it didn't and thats what I posted ('the ask didn't go up')

Argus,

just as well you describe them as trades as 5 were probably buys and 3 were probably sells.

Hardly a stampede to buy shares on what you are inferring is insider information - perhaps you should call or email the FCA rather than post here?

Looking at your posts this pm, the ask didn't go up, no RNS on closing and 2 of the 3 consecutive trades were sells at 0.94p vs the one buy at 0.948p, so rather than a total of over 5million shares bought - net over 1.5million sold...…...and the highest SP was 26 July, with (I counted) 4 trades at 11p, it just didn't close at that high.

Look on the bright side maybe it'll go back up to 0.9 - 1.0 (or even higher) on Monday and you'll be able to post that the SP has gone up.

Thorpedo,

Regardless the net cash dropped over £5mm over 6 months. That was the result of running the company which included ewt costs and the income from the ewt oil.

At the end of the next 3 months (end March to end June) according to SS the net cash remaining was less than £8mm so net cash rose by up to £700,000 but during that time up to £3.5mm was received from the placing.

Without the £3.5mm the net cash would therefore have been less than £4.5mm at end June, and thus about £2.8mm net spent in the last 3 months (£7.28 minus £4.5mm).

So regardless of one off costs and income during the 6 month accounting period net expenditure continued over the 3 months to end June at a similar rate to that in the 6 month accounting period.

You will find a helpful line in the cash account :-

Net change in cash and cash equivalents (5,145)

Because it is in brackets it means a loss, and it is in thousands so a loss of £5,145,000.

Before anyone has a go the last bit should be 720 to 1080 bopd.

Actually there was an interesting sentence about the placing in the last RNS:-

'We are currently actively evaluating several opportunities both in the Weald Basin and overseas'.

So it could be the money is currently being spent on evaluations, though evaluations shouldn't be too expensive..

As for cash position here's what I wrote on June 28 (with edits):-

'Simplistically the accounts show the net position over 6 months up to end March to be about £5mm expenditure.

Net position is expenditure minus income which includes the ewt production.

So running the company/ies costs about £800,000 per month which includes the offset of the HH test production.

So the £7.28 mm cash at 31 March plus the £3.5mm placing money (though there was probably a fee to WH Ireland) is now probably about £8.3mm (3 months x £800,000 net cost). In an interview following the June 28 post SS said less than £8mm remained which suggests the cost of running the companies and UKOGs share of ewt cost less oil revenue is much the same per month as averaged in the previous 6 months

HH-2&2z is now going to probably nearly double in cost with a full logging programme and coring through the Kimmeridge in addition to the horizontal drilling (and possibly coring) so the costs over the next quarter, even if only HH-2 and 2z is drilled could be about £5mm. So UKOG costs say about £2.5mm = 50% of well cost + £2.4mm net running cost) leaving less cash in the kitty than the £3.5mm for new ventures at end September (£8mm minus £4.9mm).
*********************
So is HH-1Z being delayed to allow funds to build up as well as to gather more data on the Kimmeridge so the new ventures money is available?

There was this in the latest RNS:-
'The FDP will focus on development of the HH Portland, but with continuing production from the Kimmeridge.'

But there is the question of other shareholders contributing and whether Tellurian take their share or exit, and how quickly given the change in plan for HH-2, HH-2Z can be switched on, and at what rate to help the cash position. Being prudent and testing at rates for data may not even be in the range 720 to 100 bopd.

Free Money,
UKOG is trading at close to full value for all Kimmeridge and Portland wells in the proposed HH development. Anything else requires drilling and proving up.

Quincet9:-

'Horse Hill with 4 Kimmeridge wells and Portland therefore worth roughly £96.8 million to UKOG alone.'

But that is based on recovering 30% of total Portland OIP and not 30% of contacted oil by 2 wells (Xodus connected oil per well 7 to 11mmbbls) so for the Portland overestimating by 33%, using Quincet calcs that makes Portland worth about £45mm and Kimmeridge worth £7.2mm.

I'm surprised such an even handed poster that Quincet claims to be hasn't come on and disputed your figures.

Legalease

Those that have been here even longer will know that actually HHDL stated in their environmental method statement that swabbing might be necessary to obtain a sample of the oil in the Kimmeridge (which was what I quoted), which strangely enough appears to be very similar to the result at Brockham and not too dissimilar to the result at BB

So 2 out of 3 ain't bad.

Pleased for Quincet. At least like me he is invested and not just being helpful!

As he/she claimed to be a financial adviser I hope we will get an analysis of how long the £8mm cash that SS said remained will last. At least he seems to agree with my earlier post that HH-1Z will be delayed.

Bridgedogg,

the discussion was about the Kimmeridge (note the heading) and I did say 'falls generally into that category', so maybe reporting on the Portland is different - though what exactly does this suggests about the Portland long term deliverability:-

'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...……….'

when they previously said they expected to produce 720 to 1080 bbls every day from the Portland horizontal when they are being careful to take no more than 220bopd out of the reservoir some distance from the horizontal well so as not to cause any detriment to the high performance horizontal test.'

and of course that is after only 25,000 bbls of oil were extracted from the millions of barrels of OIP at Portland level.

But maybe all they are interested in is the 'high performance' test - not a sustainable one?

Tollesbury,

waiting for the official figures for the Kimmeridge, well I suppose that's one route, it may be cynical but I work on the basis that companies in general like to release the most positive data they can. It seems that the mixture of flow rates released by UKOG falls generally into that category - initial rates after a shut in, half hour or hourly maximums, and for longer tests start rates and sometimes averages but never final flow rates.

Conspiracy theorists have a different view but that was shown to be an absolutely false argument during BB when long periods of silence were excused because of course UKOG must release information about things going wrong immediately.

I would always prefer not to be surprised either way, sometimes it's difficult to distil what's actually going on but it is certainly worth trying. Burying your head in the sand and like some posters (not you) not understanding why the SP is so low after each 'wonderful' RNS leads to blaming everything else but what the company is up to.

Tollesbury,

the simple answer is without the information how can anyone know if it is price sensitive or not, and who decides and what effectively can anybody do if they do, I reckon quite a lot of price sensitive information was withheld during the BB testing and nothing happened.

If it's in line with the other tests - ie around 300 to 350 bopd having started at a higher figure then I suppose not that price sensitive but why the mystery - it would be price sensitive if it was significantly higher or lower but what's the threshold for 'sensitivety'?

Bridgedogg,

The comingled production figures, unexplained and scant as they are, represent the production from the fractured Kimmeridge, as should the KL3 and KL4 individual flow rates according to what has been stated - that the Kimmeridge produces from a single oil pool, due to the fracturing in both shale and micrites, from KL2 to 'at least the top of the KL4'.

Because of the scant data there is scope for speculation about the rates. What has been released for the comingled test is a real mixture of rates, half hour rates (and pboo, a maximum half hour rate is just that, every other half hour was less), and then an average over a week, then an hourly rate immediately following the dewaxing...…………. and in the 18 Feb RNS nothing about comingled flow rates except overall volumes which gave a total of about 4000 bbls produced from the Kimmeridge after the 16 January RNS.

But in general the longer Kimmeridge flow periods where average rates have been released seem to average between 300 and 350 bopd, having started at a higher rate following a shut in period, so presumably ending at a lower rate.

But there is no information on flow rates for the two longest periods of flowing the Kimmeridge except for the initial rate at the start of each extended period, the Xmas period initial rate 426 bopd (KL3) and then KL3 & KL4 prior to the changeover to Portland, initial rate at start of period 351bopd.

Whilst many will speculate over chokes and pump rates influencing the comparability of the rates the absence of flow rate information for the longer term tests to me is not entirely encouraging.

It will be interesting to see what rates are released during the Kimmeridge testing that appears to have just begun.

Mirasol,

don't underestimate the stupidity of oil companies.

However if I were IGas I'd get the site sorted, PP at least in and be happy to wait to see if UKOG prove up their map of the Portland and also if the Kimmeridge works before actually drilling to prove up IGas resources.

That has the advantage of riding the UKOG wave if they are successful, and if not time to review the plan for both Portland and Kimmeridge and even not drill saving a few quid.

There would be an advantage in some sort of joint venturing though as if the Kimmeridge is successful sorting out the unitisation of a continuous resource could be tricky.

Wizard,

thank you, but I have found where the sites were - a far better source for basic well information (and seismic data) is UKOGL (UK Onshore Geophysical Library).

In previous CPRs for Godley Bridge it sounded like it would be trivial to instigate production which made me assume the site had been retained, though if I'd thought about it the 1980's are a long time ago - so obviously not.

Tony,

IGas can directionally drill from where they can find a site so probably not an issue.

Storrington is quite a way from Godley Bridge, to the south of BB and to the east of the licence that was allowed to lapse by UKOG that contained Baxter's Copse.

But not as far south as Lidsey. Seems workovers are not unknown, must dig a bit more when I have time. The BGS correlations show the micrites in the Kimmeridge at Storrington - so why not plan a test there first - just perforate and see whet happens - although they would require at the very least OGA permission.

I would think IGas have a lot of information on the Kimmeridge with quite a lot of wells going through it in their operated fields so will also have a lot of contact with Weald local authorities on top of their contact with the OGA for the Weald and elsewhere . For some reason Godley Bridge in the centre is possibly a more attractive drill - maybe because of their knowledge of the periphery of the basin as that's where most of their conventional fields are as is Brockham .

Wizard

Just had a look and it doesn't look like the Godley Bridge well site still exists, so all the old GB wells are P&A'd so IGas will have to go through applying for PP etc.

Leewayne,

As Mandy Rice Davis would say (about IGas being excited) they would say that wouldn't they...……………..they are hardly going to say it's risky but it should help prop our SP up.

So where does it say that ' Igas have looked at all the data from UKOG at horse hill'?

Their statement could just mean that they have looked at the data in the public domain.

They also say 'up to' (of which one may be what happens) not setting up 2 wells - seems a lot of posters only mention the maximum case.

and exactly what negative have I made up - please point it out, unfortunately if you think certain facts are negative then so be it.

...........and as usual ending with a personal attack with no substance.

I really don't know why posters bother - for 4 years I've been pointing out the flaws in what's been going on and what's being said both here and on twitter and received far more abusive invective than a schoolyard taunt.

Even I was hoodwinked by the initial UKOG ramping at BB - but luckily finally believed my own reservations and derisked - a bit like FOTH actually, but of course I wasn't telling everybody to buy (or was it 'shorts are closing') while I was selling:-

FOTH / adrianwfire tweet on 25 May 2019, better look quick as he might delete it :- 'ukog lse ninetails changes his story every other day. Says a while back he bought in at 9p . Must of bought mine . I derisked at 8.6p.'