Member Info for Penguins

Starbright,

I'm puzzled. Your valuation of HH production based on the table of tanker movements seems to suggest a much larger valuation than I'd expect.

Even at OP-OPEX of £50 (ie if all the produced oil was sold today with no other outgoings) your valuation of £260mm would need 5.2mmbbls net to UKOG which would mean a gross production of about 10.5mmbbls, or an average of 8 tankers a day for 20 years.

This is way above the RNS 3 tankers a day average over 20 years (4 mmbbls with 305 working days a year) and even if I don't 'tinker' with the tanker movements I only get about 6.5mmbbls, which again means too many tanker movements.

Anyway just popped in and am off out soon, but will reply tomorrow if needed (post Glasto attempt).

toughiv

why do you have x6 for the number of days worked a week and then 24 for the number of days worked in the month still?

In a month there are about 26 working days (though Saturdays are half days) which is what I actually used in my calculation (not 24 which was a simple 4 weeks x 6 days).

Your calculation has 144 working days per month (6 x 24)! The table also says there are 16 2 way trips initially - this also more or less agrees with the initial 500 tonnes of oil which is approx. 16 loaded tankers.

The reason to use the average of the start number of tankers of consecutive periods is because the decline will be continuous not in steps - for example first period of 4 months there's a maximum 16 tankers (presumably at the start) and second period 12 maximum so (simplistically) after 2 months there would be 14 tankers and just before the second period it should be 12 tankers. This would give an average of about 14 tankers a day throughout the first period.

As I also pointed out if your answer of total production is significantly different from volume of oil that would be exported by the number of tankers that is in the RNS (3 a day average over 20 years) then there's something wrong with your calculation.

So working days a year about 305, number of years 20 = 6,100 days. 3 tankers a day = 18,300 tankers

Volume of oil in each tanker 214 barrels = so 214 x 18,300 = 3,916,200bbls

I would wait for a CPR with a 'proper' economic run as there are many factors that would affect the future value of the oil, not only the OP but inflation, exchange rate as oil is in USD and of course when the oil is produced. The OPEX per barrel will also rise as production declines, and OPEX isn't the only cost attributable against the site.

Toughiv,

Firstly the number of tankers doesn't go down suddenly at the end of each period,he tankers hold 214 barrels according to a UKOG tweet, but that's minor against having 6 days working and 30 days a month. It should just be 24 days a month. A positive is the number of tankers is the number in the table (ie 16 for the maximum in the first period.

So you should have average number of tankers per day each period x number of months in each period x number of days working per month (say 25) x barrels per tanker (214).

So I'll do the first line for you:

Average number of tankers 14 x 4 x 26 x 214 = 311,584

As a check on your final result as HHDL say that the average number of tankers per day is 3 (some posters and tweeters don't understand what average means) the total volume of oil should be about 4,000,000 barrels.

You also seem to have a crystal ball regarding the OP which as has been demonstrated over the years can actually go down as well as up.

The actual value per barrel now even if the 4mmbbls appears as a 2P reserve will be much lower than OP - OPEX

As regards whether this number represents Portland and Kimmeridge production here's something off the UKOG Web site:

Horse Hill production plan – estimated HGV movements

Horse Hill Developments Ltd, a UKOG subsidiary company and the operator of the HH-1 Kimmeridge and Portland oil discovery, has recently submitted an outline long term HH Portland and Kimmeridge oil production plan (called an Environmental Impact Assessment Scoping Request Report) to Surrey County Council.

So one of them is wrong, and the average of 3 a day for 20 years in the RNS more closely matches the table on page 10 than the page 22 statement.

Why produce a detailed table that actually acknowledges declining production?

I know which I believe, and it's not the one that would suggest about 21 mmbbls production, with no decline.

Ibug,

what scoping document?

The one linked on the UKOG site has 40 pages and on page 10 has a table of tanker movements over time.

http://ukogplc.com/pdfs/Horse%20Hill%20Production%20EIA%20Scoping%20Report%20051018.pdf

This does not have 32 tanker movements a day for 20 years.

The final number is actually based on 305 days - when I originally wrote this I forgot New Year's Day bank holiday.

Really must be better at proof reading.

Starbright,

too nice a day to stay in watching dismay on this board.

Just got back and seen your calculation for total production based on HHDLs tanker movements table.

http://www.ukogplc.com/images/assets/HHDLProduction%20HGV%20Movements.pdf

Your calculation ends up with 5 tankers a day average not the 3 tankers quoted so I wondered what was different.

Firstly the tanker movements is a maximum (not an average) and will be at the start of each period declining presumably to the number of movements (ie maximum) at the start ot the next period. But although Saturday is a half day I imagine they will still move the full number of tankers, so 52 x 6 - Bank holidays (8) +1 (365 days in a full year not 364 can't be bothered with leap years) = 305 days of tanker movements.

So my table is

First 4 months start 16 tankers a day ending 12 a day, average 14 x 214 x 306/3 = 301547
Next 24 months start 12 tankers a day ending 8 average 10 x 214 x 2 x 306 =1305400
Next 48 months start 8 end 4 = average 6 x 214 x 2 x 306 =1566480
Next 60 months start 4 end 2 = 3 x 214 x 5 x 306 =979050
Next 104 months start 2 end say 1 every 2 days = 1.25 x 214 x 8.66 x 306 =572964

That makes about 4.73mmbbls total production over 20 year (with 67% in the first 6.33 years). This averages 3.6 tankers a day over 20 years.
.
So this is still above the average of 3 tankers a day over 20 years estimated by UKOG which at 305 days a year would total just under 4mmbbls total production. Probably because there's a bit of rounding associated with number of tankers, length of each period and the decline during the first year or two may be biased towards the start of each period.

Now this may all change with the Kimmeridge CPR but there must be some science behind it based on the Portland ewt and the information from the short Kimmeridge tests in 2016.

Starbright,

There is actually an initial indication - presumably from some sort of modelling - of produced volume over 20 years presumably from all 6 producing wells.

3 x 20 x 365 x 214 = 4,686,600.

of which about half is currently UKOGs

is that good or bad?

JTTALV

connected OIP not recoverable - about what Xodus had before.

and as I suggested not a CPR only a connected volume reported. No recovery rate or production profiles.

and the internal declaration of commerciality 'will be made shortly'

2.5 to 2.6? oops

1.925 - 1.926 are sells

djm trading - the clue is 'nominee'

will,

I just got offered 1.9255 (ie over the mid point) to sell 200,000 (and I didn't) so a lot of those 'buys' at 2.5 - 2.6 are actually sells.

As I often point out the trade definitions are often wrong.

Razer,

Like Angs it looks like there is a seller who is happy to offload their shares and it seems the MM can sell as many shares as they can supply at just under 2P - at Angs it's 8p.

Why they are prepared to offload large volumes of shares at these prices is probably the logic of a bird in the hand - even if the risk of the SP dropping is low the no risk option is to sell now.

Until the supply is depleted or a stonking RNS appears (and what stonking is depends on each individual) the price will continue to be depressed.

The problem is exacerbated by the flood of pi sells when the price rises over 2p.

Anyone who believes all the large trades are buys needs to watch the SP, not whether it is a buy or sell relative to the mid price at the time the trade is published.

Hi Boyzee,

Still lurking. I think the lack of detail was most worrying, and Bergen are stuffing the SP anyway. Seems the warriors over there think 3000 bfpd was a credible test and what it will produce at, and how long were the other tests run for, were these stable rates, what chokes. Didn't even give a gross oil production during the tests - could have been less than 100bbls of oil if each test was only an hour (duration of the test runs were limited). Don't think the water is a killer though but companies can make things worse trying to solve problems.

Anyway wrong board, but they're a bit touchy over there - a bit like here.

Not if your birthday is after today.

I think that shows the level of his understanding of maths.

And it happens every year, but only after you've had your birthday.

So HHDL has just submitted an Environmental Impact Assessment Scoping Request and you think that they are digging up a field nearby before waiting for a response.

I'd look at the plan submitted with that request (page 33) - the extension to the site is (as FOTH says) towards the road.

Those plans also have a tanker loading bay, not a pipeline.

bother these days to respond to Adrian's ramblings on twitter (https://twitter.com/Adrianwfire) but this time I will.

He said this morning:

‘LSE poster Penguins . I'm looking forward to this guy's apologies on LSE. This deramper has said in the past the Kimmeridge at HH will Not flow. Then it's a little pool. Won't flow anywhere else when HH did. Now Balcombe proves the weald flows to with no fracking!’

I guess he objects to this sort of statement in my posts (from Saturday):-

‘The Kimmeridge testing at HH and Balcombe, is really all that matters. It will either exonerate the believers (thousands of barrels a day predicted production rates), crash the company (the complete heretics, no or hardly any oil after the initial 'gush') or more likely produce something that's neither (a few hundred bbls a day), possibly transformational for UKOG but not the UK economy.

But even success at Balcombe and HH will not 'prove' the whole of the Weald, after BB that's going to take a lot of wells across the basin successfully testing the Kimmeridge before the sort of reserves (or even resources) dreamed of will be credited to UKOG.’

**************************************************
As I’ve already apologised for following the HHDL view in the Environmental Method Statement for HH that the Kimmeridge would need to be swabbed to obtain a sample of oil from the KL he must be demanding an apology for expressing a still to be proved wrong point of view that the productivity of the Kimmeridge will need to be successfully tested across the Weald before very much is ‘proved’.

As for apologising - a bit rich as he's never apologised for ramping throughout the BB testing with 'opinions' that the tanks were filling with oil, the pump was pumping oil for days on end and frequently anticipating an oil tanker - a view that was comprehensively proved wrong despite how successful it apparently was.

Whilst initial rates are interesting they may not, and usually don’t, represent the long term production rate or even the initial sustainable production rate– and whilst the believers ignore this reality and whine about AIM it seems that a lot of investors share my view that there is still considerable risk and production flow rates could be considerably less than these initial rates.

A long awaited ewt of the Kimmeridge should lead to a CPR that will at least have an independent view on the value of the Kimmeridge at HH, but unfortunately that is still months away so discussion will continue.

Max,

You posted: 'Funny how at about this time last year UKOG started it's upward climb to peak at about 11p. Well, history has a funny way of repeating itself in many aspects.'

Talking about verifiable information.

The price peaked on 26 July at about 11p and then again on 4 September at about 10p. By 2nd October (a Monday) the SP was 7.175p - 7.5p and declined (with minor recoveries - eg Hoyer tanker pre Xmas P&D) thereafter until March when it sort of stabilised below 2p until late June when the HH testing started. I don't think you really want history to repeat itself

Has anyone seen acid being administered, as if there has been more perforating that's likely to be done and that's a reason for 'nothing happening', maybe a waste tanker to follow?

They would have had to wait until all the packers were back in place to acidise the required intervals.

But testing would soon follow that anyway, once the spent acid was removed.

Anyway there are other reasons why nothing is being done on site with tubing in the well.

btw, is there actually a pump on the well - seeing as it's the name of the thread - it wasn't in yesterday's pictures.

jerseyjohnnie,

only if you believe the buys vs sells.

As these are a construct of the bid and offer which doesn't actually represent what shares are bought or sold at a lot of the time in this volatile share they are at best a guide, at worst completely wrong.

If it isn't 'final' then they don't have to release it, once it's been prepared by Xodus HHDL will review it and suggest changes, they could take their time over doing that. It might also be contentious so meetings etc required to thrash it out. As I've said before the shareholders in HHDL will also want their say and if the Markwells Wood CPR is anything to go by the Nomad also has a peek.

If they wanted to delay publication, and I'm not saying it is delayed, they could.