Member Info for Penguins

Tymers,

I wouldn't ask Dodgemeister as the plan is for 2 this year...… HH-2 & HH-1z

Everything else is 2020 or later...…

As for 'working the maths' on the current testing, I'd wait for a CPR. (or for at least an indication of HHDLs plan use the tanker trip information in the planning application).

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Oh dear Rodders still sticking to your unrealistic view of depletion.

16 tankers last day of the first four months.....12 tankers the next day....

and the same for the following periods, and I suppose 2 tankers a day for the last 104 months.

Oh well you're only deceiving yourself, and anybody else who thinks your numbers are realistic because they are 'based' on the planning application.

Oktane,

all you need to say is you're happy that SS hasn't bought any UKOG shares in the market. Others differ in that view.

The fact he has options over a lot of share options is another matter.

Also assuming he hasn't sold any DL should have more than 85 million shares that he actually bought (though the first 73million odd were for only £20,000 if memory serves me correct).

16 April 2018 RNS:-

During its review of option awards the Independent Directors of the Company approved an extension of the exercise period of 25 million options previously granted to Stephen Sanderson...............it would be beneficial to extend these options rather than allow their exercise in the current open period....

So even when the options were extended the company was in an open period.

Zoom,

I'd suggest anyone commenting on the diagram actually looks at it.

HH-6 is described as a Kimmeridge producer. I think you'll find injecting water into the Kimmeridge is a non-starter (read the Brockham FDPA)

JTTALV,

if you actually look at the diagram (and it does look like a UKOG bit of crap) the horizontal section in HH-6 is actually in the shale above the KL4, whether they would try to produce from that as well is questionable as they've shown no inclination to produce from the shales unlike Angs..

Rusty,

I think that that's exactly what that diagram is suggesting - so what KL3 will produce is perceived as the most economic way to produce the KL3/4 zone, any uplift with a well in the KL4 not being worth the expense but that's just guessing from a diagram.

Free-Money

Yes all we're talking about is HH - the reason being it has been drilled and testing is actually underway, though only a little information has been released and no CPR. if you want to build spreadsheets with multiple sites and wells etc that's your prerogative. I hope you have a column for risk as well.

If only every well and site was guaranteed 100% success. After 3 years of waiting the first CPR for the Kimmeridge should finally appear at some point this year, a few more and it might start to be possible to predict whether there will be producing sites all over the Weald (or not).

Rusty8

If you go down Rodders method maybe the average is 4.5 (not 5) - and even my method which is presumably closer to the current 'truth' overestimates - but HHDL will have had a decline curve and real daily production estimates over the 20 years to work off - so I would expect using the companies numbers they do agree - just that using these periodic maximums are only an approximation to the real decline curves used.

Rodders, good for you, let's hope your right.

Yes they are pre the full KL4 results (in fact UKOG, unlike for the KL3 and Portland, have been noticeably quiet about even initial flow rates for the KL4) - did you notice though that the only Kimmeridge horizontals were in the KL3 in the diagram that DoD published.

Rodders,

it's not my steady decline (it's what happens) and the average tankers per day over 20 years that UKOG quote is 3 - two thirds of your number.

RNS 5 October 2018:-

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

Depending on whether the 3 a day is rounded down (say from 3.5) or is using 305 or 365 days a year that gives total production of between 4 and 5mmbbls.

Rodders,

Decline doesn't happen in a series of steps and the word for tanker movements in each period is 'maximum' not total for each day.

So during each period the number of tankers will likely drop to one above the number of tankers in the next period.

Thus in the first period it would be reasonable to approximate that during month one 16 tankers for 26 days, month 2 15 tankers per day (tpd), month 3 14tpd and month 4 13tpd.

During the next period the first 6 months 12 tpd, then the next 6 months 11tpd, then 10tpd and 9tpd.

and so on for the next 2 periods.

For the last period it's unlikely that the final tanker count towards the end will be one a day (most onshore sites can struggle on with much less) but assuming that for the last 52 months there is one tanker a day my calculation of total oil produced at HH ends up with a total of about 5.2mmbbls.

To simplify matters I'd value reserves in the ground (we'll have to wait for those at HH and assuming they are 5 to 6mmbbls) at about £12 and that gives a value of about £30mm to £35mm to UKOG (btw that's about the NPV10 value I reach using the above declines and £10mm costs (100%) drilling in year one).

Anything else is sentiment or expectation about other successfully tested sites or a significant upgrade to HH planning.

Note that using your methodology I get a daily average bopd for year one (365 days) of 2345bopd, but of course your average of 3,500 bopd you were touting as expected included production from other sites while HH declined.

Anyway we wait for the CPRs for Portland and Kimmeridge which will hopefully clarify matters.

'Fool News

The fool on the hill@Adrianwfire

500 tons of oil a day!'

(next tweet)

'Penguins and jbg posters on LSE are not going to like that!'

Well Adrian I don't know about JBG, and if you hadnt noticed I refer to the planning application you are quoting from quite often) but what you should worry about is for how long - and even supposing they are restricting production for longevity even that rate drops 25% in 4 months according to the planning documentation.

If I were you I'd have a read of the Angus FDPA for Brockham that Pete has linked on the Angs board, plenty to think about in that document regarding Kimmeridge unknowns.

Perhaps this bit might help:-

'Based on the mid case resources estimate above in table 7 a production profile has been developed for the new X4Z well. This production profile assumes a steep decline reflecting the typical declines for naturally fractured dual porosity systems and the initial rates seen in the Horse Hill testing.'

deepbreath,

For pressure only the height of the column matters, not the diameter.

Deepbreath,

Like so many numbers and statements in UKOG RNS without more information knowing whether 800psi was good or bad is hard to tell unless you dig a bit deeper

Hydrostatic pressure (pressure exerted by a column of water) at 900 metres below the surface would be nearly 1300psi and of 40api oil 1070psi, so the need for gas in the column (or pumping) becomes apparent.

I wrote a longer post on 15 November which also had this link to a calculator:-

https://www.sensorsone.com/liquid-level-to-pressure-calculator/

Wizard,

With your expectation of recoverable oil I very much doubt the CPRs will be anything for you to look forward to.

Jeffry,

No

burningspear

I hope that reply was meant to be sarcastic.

Oktane,

Median CEO salary on AIM is not £600k.

It took me 2 minutes to find this report:

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

Which gives median salary as just under £250k.

He also only has 25mm options at 0.4 which were awarded when he was a consultant.

It is a deception to say that anyone is suggesting he should buy whilst in a closed period but there has been plenty of opportunity for SS to buy at a market rate to show some real skin in the game rather than shares handed to him he can choose to buy or not.

The isue is that if the price falls to below his option price (he has some at 1.1p) unlike any investor who actually bought at that level he feels no further pain - it really would just be a paper loss.

Anyway this is entirely a matter of opinion as to whether he should have bought or not, don't get so upset about it, if the share is such a wonderful buy at any price why doesn't he add to his holding in the market?

Rusty,

If they are exporting the oil by tanker and they are predicting a maximum of 16 a day 6 days a week for the first 4 months (which you acknowledge is correct for the first period) then that is exporting 16 tankers x 6 days x 220bls but that means that is produced during 7 days as (as you point out) they are producing that amount over 7 days.

Not manipulating numbers just reading the planing application and presuming it to be true, what about you?

So Rodders,

You are in the ignore the information you have been provided with by UKOG / HHDL camp.

This categorically states that after 4 months the number of tankers leaving the site will fall to 12 a day, 6 days a week. This is equal to an average daily production of 2263bopd or just over 1000 bopd net to UKOG. In year three this has dropped to 8 a day 6 days a week (about 750 bopd net to UKOG).

Now these figures may not be final (but maybe they are pretty close) but they are all that have been stated - until these are updated they are what you and everyone else should use if you want to keep to 'facts', or are you suggesting that UKOG / HHDL don't know what they are doing, and you know better?

Rusty,

It seems Rodders didn't get the note about depletion, but your figure for average production is way out.

As for the targeted average production, in the 5 October RNS they state over the whole life of the field average daily tankers will be 3 or 660 bopd.

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

But don't let your bias get in the way of statements made by the company in RNS.

PS if you properly crunch the numbers (ie don't assume the maximum number of tankers stated run throughout each period stated and then suddenly drop in the next period) an average of 3 is about right.

Rodders,

What about year 2 etc? or are you in the make it up rather than believe the planning document camp, although the plans were probably based on provisional versions of the CPRs.

With tankers rollng out of of the site down 25% after 4 months and down to 8 during the third year (and just 4 tankers 5 years later) the replacement of production from more wells and sites just to keep production steady will mean a lot of effort and asumes no risk - select a site, turn up, drill the wells and bingo, something that has yet to be proved.

You may think it's money in the bank but until a considerable number of sites across the Weald have proved the play works everywhere (or what is required for it to work - and I dont mean fracking) the acreage has little value. The SP rise pre BB testing was predicated on an expectation from SS about how good the well was that you could just turn up, drill a well and the Kimmeridge would flow, the rise wasn't just for BB it was for the acreage position.

Brockham flowing well beyond initial flow rates should help (DHC) but having already released scoping figures for production at HH means that the CPRs will need to show production to be significantly different from the planning document for your 7p a share to be realised just from HH, but would suggest the company didn't know what it was doing applying for planning based on completely wrong figures whilst testing was ongoing.

Jiffy,

Some (on twitter and here) were predicting, before they realised what testing actually entailed, 10 tankers a day for 150 days.

The plan is current, not from 2016 so they certainly have more data than in 2016.....are you suggesting the planning application dates from 2016?

Jiffy,

Suggest you read the planning application, it isn't a view it's what HHDL consider to be the plan determined presumably on the data they had at the time which must have been sufficient.

As I've previously said (and many others including DL) the number of tankers during testing doesn't matter.

CPRs matter.

Tony,

I work for no one.

I just see so many posts that deserve an answer as their main purpose seems to be to mislead.

I don't see only the negative - I just don't read an RNS or other documents issued by UKOG and then make things up, my view is balanced.

The most common seems to be misunderstanding that OIP is not a recoverable reserve figure, or UKOG say a horizontal may increase flow from a well by 2 or 3 times and posters either use 3, 5 or even 8 times in their fag packet calculations or assume that despite UKOG illustrating a production decline the initial rates persist for 20 years.

Even in this post you show a complete lack of understanding as to what the OIP figure represents and just make stuff up.

You said:
'There is a possibility in my mind that the reserves counted on the 2016 data may have double counted not taking into account the interconnections. On the other hand they may have wildly under estimated because of the source ricks can now be counted as reserves.'

Well to start with there were no Kimmeridge reserves 'counted' in 2016, nor contingent resources, only posters who assumed that future reserves would be hundreds if not billions of barrels following the HH flow tests.

The OIP is calculated for each layer individually and represents the oil estimated to be contained in both fractures and matrix in that layer so double counting can't happen.

So far it would appear little or no matrix oil has been produced as no formation water (which is calculated by Nutech to exist so must be there, trapped also in the matrix with some of the oil) has been recognised as produced.

If only oil in the fractures can be produced (unlikely but possible) the volume of producible oil (really contacted) will be significantly reduced - but until a CPR is issued for the Kimmeridge it won't be possible for any of us to assess what exactly is happening.

As I said there must be a reason the illustration only has Kimmeridge horizontals in the KL3, and already the Portland 'up to 40 plus percent recovery with 3 wells and 2 injectors' appears compromised as no injector in the Collendean Farm terrace almost certainly means no injection uplift to recovery.

I still wonder that having been given a pretty good indication that the HH site on current plans will produce much less than 10mmbbls over 20 years of production (adding up the truck movements and months) what the enthusiasts think the 2P recoverable reserves will be once the CPRs for HH are complete?

To base an investment strategy on believing an AIM company is trying to suppress their SP is bizarre. As for SS buying up shares in licences, I'm definitely in the camp that if he believed in the company he should be buying shares in the company, in the market, using his own money - and he has had plenty of opportunity to do so over the past 3 years.

One reason he's buying the bits of licences could be that no one else is interested and a fire sale price to an outsid