Member Info for Penguins

Oakleak,

who said anything about HH-2.

But I think they will have to shut in HH-1 when they drill the sidetrack - HH-1z.

Hi Bruce 1 er Wayne is it?

So you understand why they need to adopt prudent well management? Why not flow at the sustainable rate of 362 bopd?

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.

As for the number of tankers barrels is a volumetric measurement and obviously tonnes is a measurement of mass.

Crude oil varies in specific gravity so there are more barrels of 40api Kimmeridge oil in 5300 tonnes than 35 api Portland oil.

I make that there are just over 7.6 bbls per tonne of 40api oil vs about 7.4 bbls of 35 api oil.

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

Wizard,

as you seem to want me to comment I will.

The reason the company gave was reservoir management which could mean anything from that's a long term sustainable rate to wanting to spin out production, as pboo says, to avoid shutting down the site, though testing involves some daily costs that could be avoided.

Anyway like most things at HH it's not transparent and daily rates during this testing have rarely been properly explained - what really matters is a CPR.

Maybe the delay in UKOG RNSing the Holmwood Operatorship is they are putting in extra news.

Oh, and g'day rodders.

Zoom:-

an extract from the Oil Taxation Manual:-

'The aim of RFES is to help companies involved in exploring for oil or gas, or in the development phase in the UK or on the UK Continental Shelf that do not yet have any taxable income against which to set their costs and capital allowances.'

So it applies to companies in the UK (onshore) or UKCS (offshore)

Zoom,

A quick search found this on the OGA site:-

Ring Fence Expenditure Supplement (RFES)

The RFES assists companies that do not yet have sufficient taxable income for ring fence corporation tax purposes against which fully to set their exploration, appraisal and development costs. The RFES currently increases the value of losses carried forward from one accounting period to the next by a compound 10% a year for a maximum of 10 years, not necessarily consecutively.

Looks like expenditure can be carried forward (and inflated) for a long time against Corporation Tax

Zoom,

there has been considerable expenditure, and there will be. Not sure how many years this can be carried forward (not an accountant) but I would have thought the timing of this production and drilling is almost certainly irrelevant in terms of tax years as long as production revenue eventually exceeds expenditure.

Don't think there's a delay in drilling anyway, and there are several factors that may impact timing, rig and equipment availability - these wells have fairly long horizontal sections so not all rigs will have the capacity for the measured depth, may be waiting on CPR and other reports for well placement and completion - I'm sure there's lots of possible reasons for drill timing. Maybe not producing from HH-1 will make logistics easier? Maybe Tellurian are waiting for CPRs etc before committing to remaining in the licence?

First sentence should read:-

I can't find a post that reflects what you claim I've said - if you have details I'll check but I'm pretty sure I never said that UKOG might have to buy the shares of the other shareholders.

btw,

Operators have to be prepared to be audited on operating costs charged to partners, so your idea of HHDL recharging 42% operating costs (15/35) on Tellurian's share of the oil revenue would be caught.

The general view is OPEX during production will be around $20 per barrel initially or about 30% at current prices.

Wizard,

I can't find a post that reflects what you claim I've said - if you have details I'll check but I'm pretty sure I never said that HHDL might have to buy the shares of the other shareholders.

But I suspect it would actually be a post regarding 'drag along' and 'tag along' clauses in the Articles of Association.

These have nothing to do with UKOG forcibly or otherwise buying other shareholders shares in HHDL.

These clauses relate to a situation where UKOG sell their shares in HHDL when they are a majority holder (over 50%).

This means that UKOG can insist that the other shareholders also sell to their purchaser at the same price per share (drag along), or the other shareholders can nsist on selling at the same price to UKOGs purchaser (tag along).

Rodders,

there may well be pre-emption rights in the Shareholder's Agreement but that usually just requires matching the price offered.

THorpedo,

I would be surprised if a shareholders agreement would prevent a sale to an outside party as the clause you pointed out which could (though might not) was obviously unacceptable.

Preventing sales to outside parties would be very restrictive - why would UKOG even offer what they did?

Thorpedo,

the articles of association supercede the incorporation document.

23 Sep 2014
Resolutions
Resolution of adoption of Articles of Association
Resolution of adoption of Articles of Association

In this document the transfer of shares is dealt with in clauses 36:1 to 36:8 and the directors are compelled in clause 36:5 to register a transfer as long as it is done in accordance with the articles of association.

Rodders,

I think I've answered your question about Tellurian - but I wonder why you asked if you didn't think I was suggesting it.

Thanks for the tip about Waitrose, not interested though, but I do find it funny you think I would be - you really have no idea.

Thorpedo,

I've read the Articles of Association - no clause preventing sales to non shareholders.

If you think otherwise please point out the clause.

Rodders

a serious buyer would certainly outbid UKOGs bargain rates (your description) - so far no takers.

...........but nowhere do I suggest Tellurian would be interested in more equity in HH, it was interesting what price might be attached to their interest in HH based on UKOGs pricing for HHDL equity.

Major sat in the wings waiting for the HH CPRs - really, I doubt it?

..............anyway I thought you'd filtered me.

Rodders,

Alba and Dor can only be forced out 'at bargain rates' if UKOG is the only buyer and no one else is interested as shareholders are not compelled to sell to one of the other shareholders - but nobody else seems interested even at these 'bargain' rates, though to be fair having a controlling interest shareholder in HHDL already in place may put 'others' off.

The previous purchases were at £300,000 per percent of HHDL so at the same price 18.1% is £5.43mm, interesting their market cap is only £8mm.

£300,000 per percent of HHDL equates to about £460,000 per percent of the licence which suggests a price of about £16mm for Tellurian's 35% equity in the licence.

TollesburyStu,

……..in the interest of balance I did a dummy trade to buy at 15:00 and found that the buy price for 250,000 shares of 1.206p was well below the mid price (1.225p) so a lot of buys while the spread was/is 1.2 - 1.25 are being identified as sells.

Tollesbury

Perhaps if you looked at my post on Friday 17:11 when I pointed out:-

The reverse was true from about 10:50 this morning when the advertised spread was 1.25 to 1.3 when a lot of buys were recorded as sells with the spread really around 1.253 to 1.265 again plus or minus a few thousandths of a penny so buys were below the mid and recorded as sells.

ipadtrader,

Your 29th Jan post....

'Why do people keep saying the trades are all blue yet the SP doesn't move, I don't know what platforms you're all using but its quite clear that as an example today all the the trades from mid afternoon from 1.3440 to 1.3490 were buys and the trades between 1.3175 to 1.3218 were sells and the same picture of a tight spread is repeated everyday I don't understand the confusion.'

So why did you post that.......deramping?

Wizard,

perhaps technically it could be done but it would be mega expensive, probably only test one objective and as it would be an exploration well carry high risk and have complications of responsibilities, equities and probably insurance.

So it's not going to happen.

Shouldhave,

don't believe the 'buys' and 'sells'.

Like it or not I've just checked and I could sell 500,000 shares at above the mid point (I can't put the price as current price posting isn't allowed).

So there is still selling 'down here'.