Member Info for Penguins

Legalease,

The reason for testing is to obtain data, the OGA makes it clear that testing is not a substitute for applying for FDP approval.

So continued testing should have purpose, which I'm sure with a complex reservoir could easily be justified but I would be surprised if there's really much scope for increasing the flow rate. Very short term maximums have already been tried and it appears the latest flows are with optimised equipment. Posters are depending on the released flows being severely restricted as they are steady state flow tests for volumetric calculations but there is no indication that these flows are actually heavily restricted tests.

Rodders,

Free flow is controlled by chokes.

Where does it say they are going to free flow the well?

Rodders,

You are sure they aren't pumping because they need to.

I repeat nowhere in the RNS is there any indication that these rates are constrained by the pump - you may remember that during the Portland test the well free flowed whilst on pump.

Nowhere does it say any of the quoted flow rates are 'steady state' which requires the rate to stay the same for some time. The rates quoted seem to be either short term maximums or averages over a number of days

Nor anywhere does it state any quoted rate is constrained, by pump, choke, or any other reason.

In production they will also need to 'minimise the amount of gas in the system of each oil pool. I.e. keep the area surrounding the well bore above bubble point pressure.'

Anselmo,

I think any institution would laugh at the idea that producing 40 Api oil was a really important detail - If anything that shows that the RNS is aimed at pi, not ii.

There is no indication in the RNS as to specific chokes (reduced or otherwise) just a series of different flow rates that are quoted - averages, initial, half hour maximum rates, hourly rates and so on - but with little further information to help in any analysis.

So UKOG in their November presentation predict target production from each horizontal well to be 750 to 1000bbls.

Only on slide 14 is the 1000bopd said to be an initial rate.

This certainly seems to be in line with 2 to 3 times the test rates seen in HH-1 which was stated for the Portland and is presumably also likely for the Kimmeridge.

As for reserves the presentation gives guidance for the Kimmeridge of 1mmbbls per well. So for the Kimmeridge at HH 4mmbbls reserves.

The Portland is more difficult as only 'unofficially' has SS said 10mmbbls recoverable for 3 wells (which according to Xodus needed 2 injectors) whereas the plan only has 2 wells and one injector.

If the one injector acheives the pressure support for 2 wells than it seems the reserves for the Portland will be about 6mmbbls

This conflicts with the tanker schedule in the HH planning application which variously calculates total exports of less than 4 to over 6mmbbls total for the six wells producing from the Portland and Kimmeridge.

So the RNS seems to confirm what has already been stated about flow rates but nothing about reserves. The reserves gave a NPV(?) value for HH to UKOG according to SS (but not in an RNS) of about £120mm (mid figures).

Hopefully the Portland (and eventually the Kimmeridge) CPR will confirm this valuation as it seems it's not believed by the market.

Any value from the rest of the acreage will only follow a succession of relevant tests elsewhere.

Rodders

The articles of association do not prevent selling shares to an outside buyer, nor is there a pre-emption clause.

There are both 'tag along' and 'drag along' clauses which confirm this.

ZPLA,

Panicking, no - seems to be the territory of the desperate tag team.

Perhaps if Argus had used a calculator he wouldn't have got it wrong and saved me posting......

Argus,

110 tankers even with an average price of $80 per barrel gives HHDL revenue of about £1.5mm, not UKOG (though the 50 tankers since November 15 will average less than $60 so an actual total for 110 tankers of less than £1.3mm).

Of course there may be some tankers missed but these will all have been since November 15th and it would have to be a significant percentage (+40%) to reach even £1.5mm revenue to HHDL.

Anyway this just means that the amount of any cashcalls to the owners of HHDL to pay for HHDL's share of the testing, drilling and rebuilding of the HH site will be reduced by that amount.

As for the £2mm owed by HHDL (and probably more by now) this won't be repaid until HHDL moves into profit which with their share of 4 wells to fund in 2020 will in my opinion not be until 2021.

Legalease,

FOTH called me so I answered.

Well I wouldn't be surprised if the rumours of a BP/Total takeover were totally false, why would BP or Total pay even £70mm (the current market cap) for a single production site even if it proves commercial at the level predicted by SS in interview (but not in an RNS).

As for test production it's the oil produced (clue in the word 'produced') during the EWT, as illustrated in the 15/11 RNS: '"The 2018 EWT's total test production' .

And it seems you are incapable of noticing you've got the caps lock on - are you sure you know what you're typing.

And acreage - that only matters if that the play is proved to work in all that acreage, and there's no more acreage available - but there's plenty of open acreage in the Weald.

In the Brockham FDPA application on What do they know they mention this:-

'Angus have not received the Horse Hill well test data, discussion with the operator has indicated that the two well test conducted in the two limestones behaved as a single reservoir.'

What this might mean for a commingled testi I don't know but untimately both limestones are draining the same pool. This seems to be confirmed by the illustration in the planning application where only the KL3 has horizontals producers.

Oakleak,

Reducing what red tape - the scoping report was produced because they anticipated, that the site might produce, if only briefly, in excess of 500 tonnes per day. Why wouldn't they have predicted 20 (or more) tankers a day if that was what their estimates suggested?

Thorpedo,

I can't imagine why UKOG should put this in a RNS when the 3,500 bopd is the production just from the 2 Portland wells:-

'The envisaged development has a total of six production wells and assumes a maximum daily rate of around 3,500 bopd.'

Oakleak,

From the scoping document:-

'Based on information acquired to date, once operational, the Site could briefly produce in excess of 500 tonnes of
petroleum per day for commercial purposes, the threshold at which the proposal becomes a “Schedule 1
development”3 which means it is “EIA development”4 and must be supported by an Environmental Statement (ES).'

This means they are covering the possibility of producing (briefly) at a level above the 500 tonne threshold so not avoiding the additional EA documentation required.

DHC,

you claimed the upcoming application was for 6 wells

from my post:-

'THE DRILLING OF FOUR NEW HYDROCARBON WELLS'

I think the planning application is to retain the 2 already applied for and production facilities - the planning for the first 2 wells is already in place.'

*********************************************************************

So I'm not sure what your post is about, but three cheers to the 'Crisp and sweet reply. Don't expect any more.'

HH-1z and HH-2 haven't been drilled yet so should read:-

'Planning application for 6 wells in front of the Planning committee on 20/02/19.'

vs

'THE DRILLING OF FOUR NEW HYDROCARBON WELLS'

I think the planning application is to retain the 2 already applied for and production facilities - the planning for the first 2 wells is already in place.

'Planning application for 6 wells in front of the Planning committee on 20/02/19.'

vs

'THE DRILLING OF FOUR NEW HYDROCARBON WELLS'

I think the planning application is to retain the 2 already drilled and production facilities - the planning for the first 2 wells is already in place.

DHC,

I think that the planning application is for 4 producers and 1 water injection well (until of course the application is revised to fit what's said on this board).

Wizard,

The options are an extra to his salary and will depend on his performance I agree with that. But his salary was about the median of CEO salaries according to this survey:-

https://www.bdo.co.uk/en-gb/insights/industries/aim/aim-directors-remuneration-report-2018

so he's sacrificed nothing for these options. In fact the 0.4p ones were from when he was a consultant.

Most directors come by there shares because it's a reward for founding the company so they have put in hard graft to get to a floatation But it's a matter of opinion whether an employee should buy shares in the company he runs.

There will always be different opinions

Oktane

As far as I'm aware it's not a false statement that options are not the same as actually owning shares, it's a fact.

You won't be on the register, be able to vote at meetings or receive dividends. You also haven't paid for them so yes options are not the same as owning them.

Any claim he hasn't been able to because the company has been in a closed period for years is false.

Even in your reply you say ' if I bought' and then say those shares would then have gains and losses, SS hasn''t bought them so it isn't the same. He can choose to buy only when there's a gain.

Of course its his decision not to buy in the market, you' and many others are happy with that, many aren't. Repeatedly telling everyone he has 85million options but doesn't own a single share isnt worth it.

wizard,

please don't misrepresent me.

The plan states 16 a day maximum. Do you understand the difference between an average and a maximum.

The average tankers over the 20 years as stated by UKOG was 3 a day - that's an average.

The numbers for each period were maximums.

Where (and why) you have made up 20 a day from I have no idea (well actually I do).