Member Info for Penguins

Zoom,

clear out gas before drilling starts? Exactly how does that work as a positive thing?

The HH-2 well is programmed next (though given UKOG previous form anything might happen).

HH-2 will target the Portland so will be above the Kimmeridge. It will also not, by the time it enters the Portland, be near the HH-1 well.

I don't know why you think that they will have returned to the Kimmeridge.

This from 18/02/2019 RNS:-

'Resumption of continuous Kimmeridge test production is now planned to follow directly after the drilling of HH-2.'

As long as they are sticking to this (see above comment) I don't think FOTH would have missed either a workover to restart Kimmeridge testing, or a rig arriving and drilling HH-2.

As for the subjective opinion that the gas rate has increased - that may not be a good sign - whilst increased gas could mean increased oil production it could also indicate the pressure is decreasing within the reservoir allowing gas to come out of solution reducing oil production.

Tollesbury,

he is responding on twitter to my posts. In fairness I copy and paste what he is saying - and respond.

Next time sharetalk reference their twitter feed, or someone posts about the tanker sightings or other tweetings I hope you're going to respond and say it's a bit weirdand they should stop doing it.

Tollesbury Stu,

I didn't realise you wanted to be the boards sheriff, deciding what posters can and can't post.

Hold on a minute that's what you do all day long, you've already got the job.

Congratulations.

tweeted this in response to my earlier post:-

'Get it right Penguins.

It is not me saying that the Weald is geologically similar, it is geologists!

You can read many a presentation from UKOG were it is stated that the Weald is geologically extensive when it comes to the Kimmeridge.'

Great, do I say otherwise? Though this is what Xodus said (not UKOG) in October 2015 (Jurassic Tight Oil Conceptual Development Study) and so far there is zero Kimmeridge resource or reserve CPR'd - though obvs there will be some soon at HH.

'This development study is only conceptual at this stage and should not be misconstrued so as to convey that recoverable resources, contingent resources or reserves have been proven to exist within the tight Jurassic limestone oil play at Horse Hill or over other UKOG assets in the Weald basin.'

Rodders don't confuse something being geologically similar with it being guaranteed to be developable everywhere, nobody knows yet.

Ninetails,

exactly.

If the Weald is so great with hundreds of square kilometres under licence where the HH experience can be repeated ad nauseum why spend any money on anything else

Here's what Rodders thinks on twitter:-

'I'm pretty sure that UKOG have said that the geology of the Weald is such that the HH site can be replicated across many locations. Hence their plan!'
.
We are repeatedly told here and on twitter that this is the best AIM oiler to invest in so any investment by UKOG out of the Weald is unlikely to have a better return.

Spending money now on extra equity within the Weald or IOW increasing exposure to any non-HH licence where risk still exists doesn't seem smart...………...and if UKOG really thinks they have the BB issue sorted why have they not progressed planning permission on that already existing site to drill a cheap sidetrack rather than starting from scratch on an appraisal of a new map of the Portland and Oolite (that might be wrong) at Godley Bridge?

Buying more of HH if everything comes true (ie if there really is no risk) should surely be the best bet but if anything goes wrong increases UKOG's exposure to costs - even large oilcos like to share expenditure on E & P through partnerships, if only anyone else seemed interested in buying equity in HH rather than selling.

mufcm

despite getting shouted at every time I mention this the revenue goes into HHDL. Whilst UKOG can include it on their balance sheet the only way it can be 'physically' transferred to UKOG is by paying back loans or by paying a dividend.

This should decrease the cashcalls to UKOG though - but as we have no idea what the testing is costing how much is being paid into HHDL to pay for operations and the upcoming wells isn't known, and UKOG keep upping their share of costs.

What interested me as a post about the money being shuffled around. The players in HHDL put money into HHDL. UKOG buys out their equity, gives them moneyd shares and presumably gets the right to their loan to HHDL which gets paid back down the line. Was this the plan all along with UKOG as a cash machine letting the other companies out along the way to follow their own objectives?

Davidch69,

Can't wait for more in depth analysis, with your background maybe you should help counting tankers at the gates.

So I know you don't like me (join the club), you disagree with what I say (same club), and you prefer to attack the poster not what they are saying (same club) - but what exactly do you think is meant by a formation being analogous across the Weald.

The overall thickness of the Kimmeridge varies, the limestone (more accurately micrite) intervals vary in thickness and composition (that's the bit they're testing) and the only statement as to the density of fracturing (where the oil is being produced from) from place to place was that they thought there was more fracturing at BB than HH.

RipleyBogle,

No additional Kimmeridge reserves or contingent resources will suddenly appear in other licences associated with the Kimmeridge following the HH Kimmeridge CPR so the underlying value won't change but there will be a flurry of pi on this board translating the reserves at HH to other licences and sites, which is different.

Whether this will actually affect the price UKOG might have to pay for equity in Weald licences away from HH I doubt, but that's my opinion.

Anyway it may be the cash is for non-Weald non onshore so this won't be an issue.

RipleyBogle,

you (and many others here) don't understand how a continuous resource is assessed.

There is no lightbulb moment where the whole play becomes one large oilfield after one well's CPR is published with the characteristics at that location assumed to apply across the whole play.

You may have noticed that every well drilled so far has behaved differently - and no other well has performed such that a 'proper', or at least a successful test has been possible as yet.

Flow rates that were probably only for minutes are bandied about as if they are stable rates (Balcombe, Brockham) and of course BB is now nailed - just need to go back and drill yet another sidetrack and not matrix acidise, let's hope that's the only issue.

When a CPR for the Kimmeridge at HH emerges it will apply to the Kimmeridge at the HH site only. I suspect a lot of posters on this board will then apply any recovery factor implied at that site to the whole of the Weald but that will be false information.

It would be interesting to know what you believe a good CPR would be in terms of reserves in the Kimmeridge for the HH site.

is that most (if not all - cant be bothered to check) the acquisitions in the past have been cash plus shares.

If this pattern is followed then this is just the tip of the iceberg.

What is difficult to understand is that many posters on here (and on twitter) have said how much cash is being poured into UKOGs coffers from the average of one tanker a day currently (2 days of 2 tankers following a weekend of no tankers is not a sign of increased production) and how the £10 million plus estimated to be remaining was more than sufficient to finance the upcoming drill costs this year, which in any case would be recovered in a couple of months of testing so there should be plenty of cash sloshing around to buy more 'assets'.

But UKOG need the money to buy more of the 'assets' they already have or new ones that are so good the owner wants rid of, and if they are in the Weald the value of which will for some time be indeterminate and very dependant on successful drillin and testing (oh and a CPR).

If I were to guess that guess would be that this fund raise is for some, maybe all plus shares or a complex part carry, of Tellurian's share of the HH licences - a decision on whether they join in or dispose of their interest needing to be made before money starts to be spent as these two upcoming HH wells are obligation work and Tellurian are obliged in the JOA to participate or could lose their equity completely. If they want to avoid this they need to sell up to someone who will participate, and the only buyers in the Weald are..........UKOG and Angus (who have their own troubles).

I see that free money has chosen not to justify his comment that the 5000 to 8000 bopd per horizontal well was based on a broker assessment. The current company guidance is 720 to 1080bopd from an horizontal well and that is yet to be confirmed in a CPR or RNS.

Free money,

Which broker as the extract doesn't reference any source for the 5,000 to 8,000 bopd claims?

The way it's written it seems to be something made up by share talk who most definitely are not a broker nor close to the company.

Mick2

Wytch Farm is in the Wessex Basin.

the geology at Wytch Farm is different tothe Weald

The main reservoirs are Sherwood Sandstone and Bridport Sandstone.

Correction:
........ a well in the KL4 is going to also, intersect the KL3.

Well,

Phil, I didn't go into an essay to explain that only one layer would be penetrated and produced from by a well termed a horizontal, I thought most on this board would understand. Even if it isn't horizontal (the term the company has chosen to use to describe these wells, it still doesn't mean that a well that's 'horizontal' in the KL3 is going to also, intersect the KL3.

Topprize stop shouting, the indicative production rates are estimated from the ewt data not just the flow rates.

Mick2, Wytch Farm is a completely different play so what Wytch Farm or any other field produced or produces is irrelevant.

It may not take much imagination but it will,take a lot of cash that would need a long term guaranteed volume of oil to make it worth while.

Free Money - so you deliberately posted something that you knew to be untrue..... to elicit a response from someone that quotes what the company has stated. Well what does that make you, anyway the bit about pipelines is also a complete fantasy.

As I've extended the thread I thought I'd better repeat my earlier post.

Problem is its a ,load of tosh (the 33,000 bopd)

That was written based on a series of misconceptions.

No layer individually flowed 1688 bopd, it's the sum of the tests on all three layers - a horizontal, by definition is in only one layer.

Also the guidance is 2 to 3 times the vertical flow from a layer, and based on that the target production is 720 to 1080 per horizontal, though that's yet to be proved, or been confirmed in a CPR, nor whether that's just an initial rate or sustainable for any length of time.

Sharetalk should either withdraw that article or revise it to fit with company guidance.

Problem is its a ,load of tosh.

That was written based on a series of misconceptions.

No layer individually flowed 1688 bopd, it's the sum of the tests on all three layers - a horizontal, by definition is in only one layer.

Also the guidance is 2 to 3 times the vertical flow from a layer, and based on that the target production is 720 to 1080 per horizontal, though that's yet to be proved, or been confirmed in a CPR, nor whether that's just an initial rate or sustainable for any length of time.

Sharetalk should either withdraw that article or revise it to fit with company guidance.

Wizard et al,

That would be a good idea for everyone, but if misleading information is posted (and the figures I quote from SS are for the site, not UKOGS share) I don't see why I shouldn't post.

And the published information is that Portland will be 2 producers and 1 injector - so,at £15 to £18 per barrel (SS NPV figure) and a reduced recovery from 2 producers with one injector may mean less than 7 mmbbls from the Portland.

At 51% share that's about £63mm max based on SS figures.

Mick2,

HH site was quoted by SS as 10mmbbls recoverable from the Portland with 3 producers and 2 injector, and 1mmbbls1mmbbls recoverable per Kimmeridge well.

There has been no update to this guidance.

During the year UKOG raised about £21mm by placings and issuing shares.

No w,ells were drilled during this period so most expenditure was probably advances to HHDL and licence equity purchases leaving £10+mm plus £2mm that was already in the kitty - I think this was total group so included funds remaining in HHDL

But there is still very little to judge what the company might be worth a year from now.

There is talk of adding resources but unless there is a well elsewhere drilled tested and CPR'd by then only reserves at HH will be added to the current 80,000bbls.

The current net resources at HH are 800,000bbls. As SS has suggested gross 10mmbbls recoverable from the Portland utilising 3 producers and 2 injectors it is hardly news that this will be upgraded but there may be a wait for that to happen.

The lack of hard information about reserves at HH may only be because until there is PP for the development Xodus won't regard the recoverable oil from the development as reserves dictated by SPE rules and thus can't be included as such in a CPR.

Future expenditure vs income is obviously an important factor in whether or nor funds will be raised, and whether alternatives will be possible.

The 2 upcoming horizontals will no doubt produce at much improved rates but even if they achieve 1000bopd (or more!) each during testing, as is frequently pointed out the rates will be choked back, shut in and there will probably be workovers, and as they will be completed sequentially and then tested days of 2000bopd may be non-existent.

But UKOGs funds are plenty sufficient for the drilling and testing of these 2 wells (BB cost for a drill, sidetrack and testing was over £9mm and UKOGS curent exposure is a bit over 50%).regardless of income from the subsequent testing.

The only worry is whether if Tellurian decide to sell rather than take their interest forward that UKOG buys it. The HHDL percent were purchased at £300,000 each, and that values HH percent at about £400,000 or about £14mm for 35%.

An alternative might be UKOG taking Tellurian's equity for a further carry which would have much less impact, just increasing UKOGS share of costs and revenue (which may be nuetral as they occur as expenditure is needed rather than an up front payment.

It may also be Tellurian sell elsewhere which would be a boost, depending on price.

We shall see.

Why no massive increase in SP, obviously shorters and MMs - only joking

No hard numbers for HH and lots of unknowns regarding all the other sites. Posters here may regard the Kimmeridge proven, it isn't and even a HH Kimmeridge CPR won't prove reserves elsewhere. The Portland appraisal wells (Arreton, Godley Bridge) are by no means guaranteed successes, relying on new mapping (Godley Bridge) and a view on what happened during Arreton's previous testing.

Bag of Sand,

thought I'd replied,

Bit busy this morning - the post was hurried, no idea what I was going to do with that sentence - by if you're going to pull someone up on incomplete sentences make sure you haven't made a mistake.

My remarks were not specifically aimed at you, if you think they were I apologise, and perhaps attack was also too strong a word but it seems that most replies take very little notice of what I've actually written so just seem to be posted to 'have a go'. .

I didn't raise the issue of why the flow rate was being held at 200+ bopd - Wizard did and as he mentioned me in the post I thought I'd better respond.

'With Pboo's news of yesterday about the maximum flow allowed in tests it looks as if the flow has been tightly controlled to meet the allowance but could be significantly higher.

I take it that Penguins will find a reason for that not to be the case.'

If you look at my response I repeat the reason that pboo floated (which was spinning out the production until HH-1z was being drilled) and just pointed out that the company had said it was for reservoir management and more or less repeated what the company said that it was 'a stable daily rate' (my post:- at a long term sustainable rate).

So I actually more or less agree with you.

If only posters would read the thread rather than the misleading responses it would reduce the number of posts I seem to have to make to correct them - which I'm sure would make everyone happy

Anyway this is my last post on this rather silly thread - if there are any more reponses look back through my previous posts - I expect I'll have covered it.

and Rodders if you think this is the place to find friends then you need to get a life.

@rodders_jones

'Poor penguins on LSE.. He has no friends... He is desperate to gain a following. What a complete p**ck he is.'

(my asterisks)

Oakleak,

I post facts and I ask questions - which sometimes get answered and sometimes posters here misquote and go off at a tangent.

BoS

Semantics are important - RNS are crafted - and I would expect

I also posted this:-

'Maybe they've applied for an increase in the permitted production?'

So maybe they are not spinning out production. I don't know but apparently it is transparent.

Somtimes it appears that posters attack my posts as a matter of course , but don't actually read them.

Has TheBat121 been rumbled yet - I see my reply to him has been removed, I would expect nothing less........

No Pboo,

you are discussing HH-2 - I'm not - in fact I put this in my post - maybe I wrongly presumed you were posting about producing up the drilling of HH-1z - are you saying it is only up to the start of HH-2 now.

'as pboo says, to avoid shutting down the site'

and I also put this:-

If they are keeping the rate down to enable them to come under the 5300 tonnes but continue production until HH 1z is being set up why not say so.