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Corporate presentation - don't they use them to tout round 'investors'.

Rodders,

I'm not sure you read the thread. I suppose the poster starting it thought a pressure reading was associated with OIP.

But in reply to you, yes there are facts that could be published that aren't, and facts that have little bearing in isolation on understanding what's going on that are.

Then there's the uncertainty over some of the data they do publish. Is the average flow rate 342 or 488? Was it flowing for 30 days which is what is said in one sentence = 342, or were the PBU etc of 9 days during the 30 days = 488.

Could they not be more specific, or is it deliberate?

But the point is without actual day by day figures, including pressure and choke neither figure helps understand what really happened. Just giving initial flows (sustained 771bopd with a peak rate of 900bopd) and then only giving an average way below these figures means the final flows could be much less than the averages, and those without the rose tinted specs will be doing this sort of analysis - and that does lead to suspicions they are 'hiding' something.

I'm disappointed with the way they have handled this. Keeping on publishing initial flows from the 2016 tests does nothing to manage expectations and needs to be qualified that these initial flows are not likely to be representative of the results of long term testing.

Morning Jan,

Do you understand what the significance of 800psi is without any other data?

But it's funny how they could publish an unimportant detail (pressure during the final stages of testing) which unless you are party to all the pressure and flow data means nothing, but couldn't bring themselves to publish the flow rate that maintaining that pressure at the end of testing was associated with.

It would also have been helpful to mention what the bubble point pressure was expected to be, and the initial pressure before production.

Like so many of the numbers in UKOG RNS they are there to look good but without the detail are pretty meaningless.

Oilmaster,

I have no idea what figures you are inputting or what assumptions you are (or are not) making about decline rates.

The best indication of what is actually expected rather than fantasy oil company figures has been provided by the scoping document.

Using 80 dollars flat,25 OPEX, and the production figures indicated by the tanker movements in the scoping document I get a gross NPV(10) of less than £100mm, UKOG less than £50 mm. I would expect the Xodus CPRs to total no more than this.

Legalease,

You can refer to my previous replies - actually it's interesting that before HH was drilled HHDL expected what was more or less seen at BB.

Maintaining the bottom hole pressure is done by reducing the flow rate so increasing flow could reduce the formation pressure to below bubble point which would be a problem.

Legalese,

Do you really believe that UKOG would quote a daily average figure significantly less than the actual flow figure during flowing days? The 30 days is flow time - the 9 days is part of the overall work programme of the flow test.

The problem is that assuming either figure and starting with a flow of over 700bopd (or even more so with 900!) suggests a fairly dramatic decline to get to either average.

jptop,

Even UKOG are quoting 2 to 3 times for a horizontal well in the Portland, and it's likely the Kimmeridge will be similar - and you have no idea what the likely production will be until there's a CPR with decline rates and also reserves and resources.

The plan is not to drill octopus wells, the scoping report has a total of 6 producing wells.

In fact this scoping report has already given guidance on HHDLs view of production which would have been prepared based on the Portland flows and the 2016 Kimmeridge tests where whilst there has been little said about them there will have been some indication of declines. The quantity of oil this indicates seems to be considerably less than many posters believe will be produced with an initial rate from these 6 wells of about 3,500 bopd - not 3,400 per well.

The 5 October RNS stated KL4 preparation for testing beginning.

The 10 October RNS stated KL3 had started and had been flowing for 50 hours - actual flowing therefore began 8 October and the KL3 'programme' presumably before that between 5 and 8 October.

According to today's RNS up to 7am 14 November there were 30 days flowing and 9 days shut in during the 'programme', or 21 days flowing and 9 days shut in depending on what you believe.

Going 30 days back from 7am 14 November is 7am 15 October, not 8th october, going back 39 days is 7am 6 October.

Either way the average is 488 bopd or 342bopd and the starting rate seems to be 771 bopd. Assuming a 'straight line' decline this suggests a final rate between 205bopd (488 average) and zero (342 average), though I suspect actually a rapid initial decline followed by a rate, perhaps with pumping, a little lower than these published averages.

Unfortunately this RNS offers no clarity on actual stable rates achieved during the latter part of the test so despite these good headlines there remains uncertainty as to the most important number - what production rates are likely, as these are probably going to be less than the final pumped rates, though may be multiples of this in a horizontal well.

As a single unit the effect of this production on KL4 rates is also unknown until that test is at least begun.

Chickn,

If you think that political change could make getting FDP approval more difficult for UKOG I would say the same would be true for getting the FDPA approval that Angus will need as the current FDPA approval for the Kimmeridge is limited to Kimmeridge production from BR-X4Z until 28 October 2019.

jmhy and others please stop repeating this sort of statement:-

'SS ........used the wrong drilling mud ...as DL has said in his tweets.'

DL was not involved in BB nor UKOG so he is just assuming this was a problem - yet in the UKOG 2017 Annual Report and Accounts on Page 10 about Broadford Bridge:-

'Significantly, prior to the testing campaign fracture-related data showed the key fracture sets to be open i.e. likely able to transmit fluids under reservoir conditions. Consequently, neither the drilling fluid nor drilling and coring methodology appears to have “damaged” the reservoir (i.e. blocked or plugged fractures surrounding the well bore).'

So after drilling the logging showed that the fractures were open - ie ready for testing so the drilling fluid could not be responsible for the problem.

UKOG suspected the problem was:- 'As to whether these fractures remained fully or partly open during the necessary pressure draw-downs following acidisation used during testing is currently under investigation.'

What is odd was that HH was not drilled specifically to target the Kimmeridge and flowed very well yet BB which targeted the Kimmeridge didn't.

Krull.

I haven't said the KL3 testing isn't ongoing, just that the statement is a copy and paste and could be reliable information, but may not be.

Earlier a whole lot of posters were claiming all the information was 'new news' which it wasn't, so is this?

If they are pumping the free flowing oil from the KL3 the KL4 or both (or even KL 1 & 2 as some have suggested) I don't know, but I admire your certainty.

Krull,

see my earlier post (17:45) I didn't ignore it - its taken from the 10/10/18 RNS - Exactly the same, word for word...….

10th Key point:-

· The KL4, which flowed at a reported rate of 901 bopd over a 4-hour period in 2016, will be flow tested after completion of the current KL3 EWT.

I certainly wouldn't take it as any indication as to where testing is.

Krull:-

Did you actually read the RNS

Key point 2 in the UKOG 10/10/18 RNS:-

· KL3 flowed 40-41° API continuously and naturally to surface (i.e. without any pump) over a 50 hour initial planned oil flow period.

OK not exactly the same - just slightly edited, nothing new.

Is it not verbatim some of the points in the 10/10 RNS including:-

The KL4, which flowed at a reported rate of 901 bopd over a 4-hour period in 2016, will be flow tested after completion of the current KL3 EWT.

so no new news...

Argus

you missed out that:- 'oil recoveries of up to 45% of connected Oil in Place ,could be attained if a successful full voidage replacement pressure support scheme is incorporated into the field's development.'

....up to....could....if....

I've always thought this bit of that RNS was interesting in relation to economics:-

'Following submission of the planning application, Xodus' 2018 Portland Competent Persons Report will be updated to include recoverable reserves and net present values of cash flows associated with the envisaged Portland oil field development.

I would guess that without the planning application submitted (ie showing intent to drill further wells, build production facilities etc.) Xodus weren't willing to include reserves / resources / production that HHDL did to come up with 'commercial'.

So no Xodus haven't declared it commercial as that's a company's decision based on the economics, and I doubt they will 'declare' it commercial but if they calculate a positive NPV (10?) then that would be the blessing HHDL etc need.

Isn't it obvious from Argus's extracts:- 'HHDL now considers the Portland oil field to be commercially viable.' that it isn't Xodus's call.

Scandic, definitely not a disciple but Angus only got temporary FDPA approval for the Kimmeridge (and only to produce fron BR-X4Z) lasting up to 28 October 2019, probably because the information required to apply for a long term production FDPA for the Kimmeridge (flow rates, reserves, scale of development) won't be available until the Kimmeridge appraisal has progressed at Brockham.

Angus will also need to apply for planning permission for that development of the Kimmeridge as they only have temporary permission for the appraisal of the Kimmeridge.

As HHDL has submitted their scoping document for the production facilities required for the Portland and Kimmeridge to SCC I would say they are actually ahead of Angus on the planning permission front, and nearing the end of testing will soon be in a position to prepare the FDP approval aplication, whereas Angus haven't started yet.

HHDL also has actual undisputed permission for 2 further wells, and permission to test them. Angus's presumption that the previous permission for extra wells was valid caused nearly 2 years of delays to testing BR-X4Z.

Both Brockham and HH are within production licences.

Kempey,

Alan,

The FDPA approval extant was based on nothing as Angus had no data regarding the Kimmeridge. Once that data is available the same rigor will be applied in determining the approval regardless of whether the application is a new FDP or 'just' an addendum.

I don't see a problem with either company getting production approval if required in timescales that will enable seamless transition - it's you that seems to think permissions will take years and as Angus does not have FDPA approval beyond October next year nor planning covering anything other than appraisal well......what's good for the goose etc.

Actually the FDPA is time limited to 28 October 2019 and also limited to Kimmeridge production from BR X4Z.

24 October 2017 email OGA to SCC (ie after RNS):-

'Dear Ian, OGA has issued approval to Angus Energy to complete the Brockham X4Z well to flow hydrocarbons from the Jurassic Kimmeridge strata at Brockham Oil Field and to produce hydrocarbons until 28-OCT-2019 (consent documents attached) I also attached the referenced program of completion work which are now approved for the Brockham X4Z
well.'

I expect that Alan will respond that whilst HHDL will require years to obtain the necessary planning and FDP approval for long term production based on information gathered during the testing period with detailed planning for the facilities required for production that all Angus will need to do is jot a few notes down on the back of a fag packet.

Wizard,

Moving to the third term of PEDL 137 is supposedly dependant on completing a work programme by 30 Sept 2021 that includes shooting seismic and drilling HH 2 AND HH 1z but not testing other layers, that would be HHDL's decision.

But that is not the same as having an approved FDP for production, nor would it remove the need for planning permission for production.

Not sure how tied in PEDL 246 is but that licence also has a work programme of seismic and a well, to be completed by 30 June 2021.

As for flowing oil from the shales, I suspect the question is for how long as if it does the shales are less rigid than the micrites and more liable to close up as the oil exits the fractures. As I've always said the CPR will be interesting, until then just publishing what appear to be edited highlights doesn't give the full story and the market seems to know it.