Member Info for Penguins

Phil,

They have just reproduced the information in the 10 October RNS.

It isn't new news.

Brockham will be interesting.

The thicknesses of the KL4 and KL3 are similar to those at HH. Looking at the BR-X4Z presentation they are about 35 and 20 metres respectively - 115ft and 66ft. HH 106ft and 102ft.

Given the extent of the perforations they may also be spanning a lower KL which is less than 10m thick say 30ft.

This means the remaining 445ft, ie two thirds, is in shales assuming the figure of 656ft I've seen is true.

UKOG has avoided testing the shales to date except at BB where a shalier section of the KL was tested and this was said in the annual report and accounts 2017 caused by the required pressure drawdown: 'the fractures within the predominantly shale test sections closed-up, reducing permeability effectively to zero.'

So whether this extra section contributes to flow or not will be interesting.

I don't know if valuations based on P/E will need to be supported by sustained production at the levels anticipated to be taken seriously.

As for Lidsey they went to a lot of trouble just to obtain a sample - one wonders whether that was the plan - they didn't mention they were perforating the Kimmeridge before doing it so what was intended isn't known.

FDP approval, even with having to add power generation it took about 6 months for Angus to get their FDP addendum approved for a completely new level. I think Alan2017 is assuming it will take as long as an offshore FDP where the OGA has a much greater role.

Both companies will require planning permission for long term production. However they both could move seamlessly into that phase, Angus after their appraisal testing, UKOG after the additional drilling and testing.

The results of the tests at HH and Brockham will impact on all the Weald companies, any failure won't be ring fenced to the companies concerned, the same goes for planning etc.

Mick2

The RNS of 18/10 does:-

A planning application for Portland and Kimmeridge field development is nearing completion and is targeted for submission to Surrey County Council ("SCC") before year-end.

Mick2,

The RNS of 5 October says otherwise:

Horse Hill Portland and Kimmeridge long-term production scoping report submitted to Surrey County Council ("SCC").

Note: Portland and Kimmeridge.

And starbright 3/16 (average tankers in the 5 October RNS divided by max initial tankers in the residents leaflet - see pboo earlier post for a link) suggests average production is 18.75% of the initial rate not 36%

And a 50% reduction (from 16 to a max 8 tankers a day) after 28 months not 3 years (4 months + 24 months).

A furtherr confirmation of decline rather than 3,500 bopd forever is the statement in the leaflet about an average of 2 tankers a day once into the steady production cycle (whenever that is?).

These are not my figures they are HHDL / UKOG as sent to residents. This must be their current best guess at production decline as It would surely be a monumental mistake to mislead the residents about future tanker movements, just saying 'look we said it wasn't the final detail of our plans' would not be great PR.

ocelot,

He claims I got him banned - I didn't, but he did upset a whole load of Angus posters - and quite a few on here with abusive posts.

I actually agreed with some of what he (and BDI) was saying re the PP for BR-X4Z.

But if you read my posts you will see I don't get upset with or abusive to other posters, it's a good way of not getting banned or posts deleted, even if they are abusive to me - I don't need to report - I prefer to reply (or even recommend - haha!).

But he does seem to have a soft spot for me considering my average posting is less than 2 a day recently and less than one a day all time (1089 in 3.5 years).

Anyway enough about FOTH (he's still muttering away on twitter) - though I actually think it's great he and others devote so much time to watching the sites.

that he who thinks LSE BB isn't worth being on is reading my posts again, but tweeting rubbish on twitter:-

'#UKOG LSE poster Penguins has always put Horsehill down. He is on the BB now .

Has no shame.

Begone with you Pingo.

Idiot!'

Everything he has ever said re the Kimmeridge not flowing, being tight, will need fracking. Water cut of zero was made up ect ect ect was all bulls*hit.'

As I don't tweet I'll reply here:-

The Kimmeridge might not flow came from the HHDL Environmental Method Statement for HH-1 saying it might need swabbing.

The Kimmeridge is tight - but it is fractured.

I never said it would need fracking, in fact I have continually said it wouldn't be fracked.

I never said the water cut of zero was made up but I did point out there was a approx. 50% water saturation in the Kimmeridge and Portland (which is stated by Nutech and Xodus) and indeed HHDL expect water production at some point - otherwise where is the injection water coming from for pressure support?

PS thanks for the name check FOTH

Being held down for Brexit - why?

What does the SP of UKOG have to do with Brexit.

a week ago Lynthip posted:-

'I still feel this is being held back. I know many will laugh when I mention Brexit but we are coming out. We are churning out a lot of oil on this ewt and I bet the EU would love to get their hands on what’s down there.'

and I asked:

'Lyn (and others),

can someone explain to me this mechanism that the EU has to 'get their hands on what’s down there'.

If anyone thinks that there's a conspiracy to not reveal results until after brexit (which i think came up during BB as well) they really should explain exactly why and how it works.'

Funnily enough nobody answered. Any Explainateers now?

Maybe you should actually read the planning permission as to what HHDL have requested permission for - a series of time limited specified ewts, drilling HH-2 and the HH-1 sidetrack and testing of those two wells again with specific time periods. 2021 will be the time limit to complete the works they have requested permission to perform.

Also the OGA is quite clear (they also have to give permission for the ewts) - testing is not to be used as a substitute for submitting a FDP and producing oil.

To just carry on testing would be a good way to p*** everyone off, they will still have to obtain PP for production at some point which may be less easy to obtain if they have ignored their current PP.

Mick2, as HHDL already have a production licence (PEDL) granted by the OGA I presume you are either referring to planning permission for production which is granted by Surrey County Council or Field Development Plan (FDP) approval which is granted by the OGA, and you can't produce without all 3 (Production Licence, PP & FDP) in place.

As for Brockham this is the title of their application which they will be production testing under:

The retention of the BRX4 well, the regularisation of the BRX4Z sidetrack, and the appraisal of BRX4Z using production plant and equipment within the existing site, for a temporary period of three years (part retrospective).

Angus stated that they expected to appraise for a year initially and depending on the data obtained extend this for a further 6 months. The OGA would probably also determine whether more testing was necessary.

Of course both HHDL and Angus can apply at any time for planning permission for production so both may seamlessly move to full production following their currently approved works.

Simply put no, as explained in my post.

HHDL has a production licence, a PEDL. What's missing is PP for production and FDP approval.

G'night

That should be:

At the planning meeting it was clear the planners would expect the Kimmeridge permission to be followed to the letter.

A PEDL allows production during any period - from the OGA site:

'While the initial term is associated with a work programme of exploration work that must be completed if the licence is to continue into a second term, the licensee has the right to start production during the initial term, if the licensee can move quickly enough, subject to normal regulatory controls.'

But for Angus to assist UKOG or anyone would require further PP and OGA FDP approval, which is essentially what's required at HH so might as well put their own planning application in and get FDP approval. Disregarding the fact they would have to drill a long reach which would be expensive.

The planning permission for the Kimmeridge testing of BR X4Z at Brockham is very specific and only for appraisal and limited to a period of 3 years. They have full planning for the Portland production at Brockham. At the planning meeting it was clear the planners would expect the Kimmeridge permission not to be followed to the letter.

However the Holmwood license area surrounds Brockham on 3 sides and any more drilling there may be near the licence boundary. This may trigger the OGA requesting that Angus and the Holmwood licensees come to an agreement if there's a chance they may produce oil from outside the license area.

There are other considerations as the extent of a field needs to be determined for corporation tax and there may be unitisation issues. It's not clear how a field in a continuous resource is determined.

Eyes,

good post.

I just hope that the importance of contacted or connected oil, rather than OIP, is starting to be realised. 2 or 3 billion barrels of OIP will take a lot of wells, sites and time to contact.

Recoveries and thus reserves for the KLs will be based on oil contacted by existing wells and possibly, depending on the progress, planned and budgeted wells, though these are more likely to be Contingent Resources. Perhaps why the Portland CPR won't be released until after the planning application for the additional wells is submitted.

is the actual CPR, not a couple of highlights.

But that's not going to be published until after the PP has been submitted which is 'targeted' before year's end and only after that will we get the CPR with Xodus's economics.

Too many 'ifs' and an 'up to 45% recovery' which is dependant on the pressure support being successful and doesn't mention what volume of contacted oil it's relevant to and almost certainly a P10 or maybe even a 'max' (P5?) not a P50.

The reason for delaying the CPR publication until after PP has been applied for is probably so that the pressure support and extra Portland well/s can be included in the calculation of a resources figure (2C) and can be included in the economics calculation on the basis that PP has been applied for and will be granted and until then Xodus maybe won't even allow the recoverable from the currently approved wells (HH-2 and HH-1 sidetrack) as reserves.

So to me (and others it seems) a disappointing announcement.

The positive is it's allowed Solo to dump a few more shares into volume

A PEDL allows production at any time (Petroleum Exploration and Development Licence) from the OGA site:-

'While the initial term is associated with a work programme of exploration work that must be completed if the licence is to continue into a second term, the licensee has the right to start production during the initial term, if the licensee can move quickly enough, subject to normal regulatory controls.'

But production requires FDP approval and Planning Permission (the main 'normal regulatory controls').

I would say the most difficult of these is Planning Permission - the scoping document was the first stage of this for HH production - presumably this is what posters are referring to as a 'licence'.

Lyn (and others),

can someone explain to me this mechanism that the EU has to 'get their hands on what’s down there'.

If anyone thinks that there's a conspiracy to not reveal results until after brexit (which i think came up during BB as well) they really should explain exactly why and how it works.

You mentioned me Argus,

I neither ramp nor deramp - I tell it how I see it based on RNS, reports and knowledge. I hold shares but still consider it a gamble and I post the reasons for that view. There is more than one view and I just don't agree with yours, which appears to be attackng other posters and posting endlessly about the SP or 'big' trades listed as buys, do you have a life?.

As regards the Kimmeridge I followed the HHDL view in the Environmental Method Statement for HH-1 pre 2016 test that the Kimmeridge would need to be swabbed to obtain a sample of oil from the KL.

I also apologised after the 2016 testing - something that is lacking in a lot of posters vocabulary.

However I expected the Portland to flow at HH-1 pre 2016 testing and I never said there was no oil in the Kimmeridge, it's a source rock, every well going through it has oil shows, so please don't lie.

Wizard,

At the moment you can put in any number you like as the answer to that won't be known until Xodus have modelled the reservoir and calculated what's possible.

Certainly better than the current deviated well but how much better depends on a lot of factors and of course despite the tanker watch the flow rate possible from the Kimmeridge during production (and not after a few thousand barrels have been produced) isn't known.

Fractured reservoirs are notorious for producing at high rates initially and declining rapidly, whether this will be true for the Kimmeridge we are about to find out.

As Angus failed to mention how long their flows lasted, or any other details the rates they quoted are useless in the context of understanding how well a Kimmeridge horizontal well might flow.

Crocqman,

It was quite clear - 5 October RNS (up to) 3 wells for the Portland plus an injector, so 3 (or more) for the Kimmeridge.

One important bit of 'news' was that the KL3 and KL4 are in communication so a well in one should be draining the same connected volume as a well in the other and because of this the production probably wouldn't be the sum of the individual flows in each layer so maybe, at least to start with, only one layer will be targeted allowing a better spread of well locations.

To me there's an issue as to where to inject it.

The gas is dissolved in the oil in the reservoir - ie no gas cap to re-inject it into so just trying to stuff it back into the reservoir seems problematic, having a very different specific gravity would mean it would want to rise through the Kimmeridge and find the highestest point of the trap, not stay in the producing horizons and how effective that would be in pressure support I have no idea - I'm not a reservoir engineer, but it seems a non starter.

Firstly these results look great so far, CPR will be interesting....

But the gas rate looks sub commercial in its own right.

Here's an extract from the 2014 IGAS CPR page 29 ( https://www.igasplc.com/media/10852/competent-persons-report-2014.pdf )

'The Godley Bridge-1 well tested gas with 5-30 ppm H2S at rates of 1.44 MMscf/d from the uppermost zone of the Portland Sandstone.'

This is 8 times the 186,000 scf/d rate quoted and so far since discovery in 1982 it hasn't been developed.

There will be value in terms of gas to wire, but if the oil flow rates prove long term sustainable the gas is probably relatively insignificant.