Member Info for Penguins

Brotherant,

I appreciate a civil response, but why shouldn't I point out what UKOG say is important vs this RNS, and specifically the shortfall in the data presented so far, few posters seem bothered yet there are posters asking why the SP performed a classic pump and dump following such good news - perhaps this is part of the reason.

I have also been criticised for stating that a formal declaration of commerciality would await a Xodus CPR and wouldn't be immediately after the end of Portland testing (though I did suggest there could be an announcement of commercial flow rates by UKOG - 29 Aug), and this is confirmed in this RNS, though I hope that connected volume is not all that will be reported (as stated in the RNS) as that is only part of the story.

DaveWin,

not a poor RNS but sadly lacking in the details needed to establish what the Portland could be worth to UKOG, even if it is expected to be commercial.

This requires an understanding of connected oil, % recovery from that and a production profile, both for a vertical well and horizontal well. Publishing an initial flow rate for the HH well (that requires further optimisation to achieve), and a figure that's a simple multiplication by 2 or 3 for a horizontal well illustrates that these figures are preliminary and require refinement.

The Xodus report detailing these is still awaited, but should be soon - HHDL's internal declaration of Portland commerciality is therefore expected shortly following receipt of Xodus' final connected oil volume analysis.

RNS 27 June:-

'the 2018 EWT's prime goal is to confirm that the wellbore is connected to a commercially viable oil volume within one or more of the three zones.'

From the planning document:

workover 12 days, EWT 6 weeks (42 days flow + 14 days pressure build up)

That instantly gets you to 68 days from the start of ewt operations, and it's only an estimate. The additional workover mid August might be in addition to that, so maybe 80 days from late June when the initial workover started, and if (if) they are performing another Portland workover then maybe that won't count towards ewt and PBU timings.

The BB testing lasted far longer than expected from the time scale in the planning document so I would assume that only truly flowing days and PBU days count towards the total ewt which is probably what they report to the OGA.

As what they are targeting below the ground is practically impossible to know as seeing stuff going in and out of the hole, unless you count the tubulars, tells you nothing about which levels they are accessing so until an RNS stating Portland finished, Kimmeridge started or some other absolute 'tell tale' is spotted it's just guessing.

Yes they might be starting the Kimmerdige workover, but they might be performing more work on the Portland. The perforating gun being used in the mid August workover wasn't mentioned in the RNS days before and there has been no operational update which could have clarified what was done with that.

If they restart testing without the pump fitted that would be a positive sign Kimmeridge testing has started, but they may use a pump anyway to initiate flow so that wouldn't be definitive.

Heid,

That's exactly what happened between the first lot of testing and the testing with the bigger pump, or have you forgotten?

Perhaps look at Adrian's post from Aug 13:- #UKOG#Horsehill production string has been going in to the well for over 3 hours now.

Wonder if they really have moved on to testing the Kimmeridge?

Just seems odd that they haven't RNSd the end of Portland testing / start of operations to test the Kimmeridge.

Could it be another unannounced workover of the Portland? If the pump goes back on it might be an indication the Portland testing continues, or it might just be the KL4 needing a bit of help to start up before flowing without a pump.

So until an operational RNS is released despite the videos etc we are still pretty much in the dark.

DHC,

OK you assume the BOP stayed on site - I assumed not but you're right I don't know - but as far as I'm aware it hasn't been seen being fitted to the well, which is what I'm questioning.

Pboo that's different from saying that the thing dangling over the well was a BOP and you know it - and are you 100% sure of what they are actually doing, you didn't seem to realise it wasn't a BOP in which case what they were doing before that was without a BOP.

So Pboo,

You say the BOP is fitted. That's fine., you say it's been documented since the testing stopped, any link?

But what you were referring to wasn't a BOP. If it was it was remarkably small - the telehandler cage just in shot gives a scale.

Pboo,

Seems you are wrong. DL was pointing out that BOP means Blow Out Preventer maybe.

Have a look at this page, top image

https://www.keystoneenergytools.com/handling-tools/elevators/

Not saying this is exactly it but I've only looked for a minute or two.

DHC,

If you're referring to the bit of red kit tweeted yesterday it wasn't a BOP. It was some sort of pipe handling device.

During testing (not workovers) they don't use a BOP (hence one was installed prior to the 'bigger pump' workover, it wasn't there during the first lot of tests in July and early August.

So until a BOP turns up it suggests they haven't moved on to testing the Kimmeridge as removing the plug would require one in place.

And don't get all excited because it means high pressure. Its a back up of last resort so If it were to actually activate in an emergency it would be because HHDL messed up their well control measures as the Kimmeridge is normally (hydrostatic) pressured.

One last thing when they get to the Kimmeridge tests it's unlikely they will be testing 1400ft of Kimmeridge, just the limestones. If DL says otherwise it's in contradiction to what's been previously published. It seems like his statement about chokes (which the faithful suggested meant the chokes would be opened up).

DL tweet 22 Feb:
'Remember the original flow was through restricted choke settings.'

BTW ibug,

They are testing KL4 and KL3 with long ewt. They have suggested they might test a deeper limestone (KL2?) which would need perforating and that was the 5 day test. Depends on the outcome of the first 2 Kimmeridge tests.

RNS 19 December

'The Portland, KL3 and KL4 flow tests, each planned for around 30-40 days duration,'

It's also in th Planning application.

The nomenclature of Upper and Lower Kimmeridge Micrites etc is how these formations were originally described. KL3, 4 etc is a naming convention the Weald oil companies have adopted.

These are the remainder of the 30,555,555 WH Ireland (Nomad) warrants, previous conversion was of 14,000,000

Page 192 of admission document.

No other warrants were in issue at the time of admission.

Why would they shell out £149,000 now in the hope of a rise when they could wait for it and then exercise them and cover their costs by selling immediately.

Steve 452,

the only problem is that they won't know if the Kimmerdige is of national significance until they've drilled and tested a few more wells successfully.

It doesn't matter how good the Portland is as it is restricted to the prospect at HH with OIP following the 2016 testing estimated by Xodus of 30mmbbls, recoverable will be a percentage of the OIP - ie not of national significance.

No,

Because the figure you're quoting is OIP.

With the new testing the resource number for the Portland might change, and will hopefully become a reserve figure, but it was 500,000bbls contingent resources net to UKOG @ 31%, so now about 750,000bbls.

Value in the ground even of reserves is considerably less than the OP minus OPEX. Resources are worth much less.

Whilst much has been made of flow rates the important number to emerge from this testing is 'connected' volume of oil.

Connected is the 'C' word any poster should consider when estimating the value of the Kimmeridge once the ewt is completed.

RNS 27 June:-

'the 2018 EWT's prime goal is to confirm that the wellbore is connected to a commercially viable oil volume within one or more of the three zones.'

Willow,

Before wishing for a more open choke I would review the results of the previous Kimmeridge tests, Have a look at the 4 RNS while the Kimmeridge tests were being performed in 2016.

The KL4 for instance had a one inch choke for both tests. The first test flowed at a stabilised rate of 901bopd for about 4 hours.

It was shut in and then flowed again for abut 7.5 hours. Flow didn't stabilise and it flowed at an average rate of 838 bopd.

The KL3 initially flowed 700 bfpd 50/50 oil and water with a one inch choke. This was then choked back and flowed at a stable rate on it's first test of 464 bopd with a half inch choke. The second test flowed at a stabilised rate of 456 bopd, the choke was reduced to 28/64 in the second test to stabilise flow.

So what would be the effect of 'opening' the choke' on the KL4 - it already was open more than it should have been to keep the flow stabilised, and the flow dropped anyway.

The KL3 was choked back to stabilise the flow.

Maybe these tests will be different, maybe reperforated and/or reacidized, but so far this is all we know.

Assuming opening the choke will always increase flow is naïve.

I suppose repeating the details of all the Kimmeridge tests will be considered a deramp - but you could easily think there were only 2 tests of the Kimmeridge as the second tests of each layer have never been mentioned by UKOG since they were RNS'd.

Thorpedo,

you're misrepresenting my reply.

You said:-

Every test, including the maximum flow test goes towards identification of the recoverable oil. There is no need to rerun tests as the results of previous tests still stand and are used in the analysis.

I said:-

assuming they did something with the perforating gun during the workover they will need to rerun the well optimisation before performing the 'lengthy' flow test/s

and they didn't have time following the max well tests RNS'd 3 August to perform anything but well optimisation before they took the pump off, so there were no lengthy tests to rerun.

If they've added perforations (or even just reperforated) the well will not perform the same.

And don't be so sure that a CPR with an analysis of the results won't take weeks (or months) following the ewt.

DazWhite,

You posted:-

'Penguins, Making stuff up incorrectly again. Results don't take months and they are not on the first phase of the Portland Test.

did you actually read my post?

I wasn't talking about the 'results' of the tests - if you read my previous posts you will realise that I'm well aware that the individua test results in terms of the flow rate achieved are known immediately.

It's the CPR that follows with an analysis of the tests that will take time, and I said weeks or months depending on the complexity of the reservoir, you do know what that involves?

As they had only performed the max rate tests before the 3 August RNS and only had time for the well optimisation between then and the workover - and assuming they did something with the perforating gun during the workover they will need to rerun the well optimisation before performing the 'lengthy' flow test/s (the 3 August RNS doesn't mention 3 separate tests - but then it didn't mention a workover or perforating gun).

RNS July:-

Operations will then include further flow parameter optimisation, followed by the first of three planned flow sequences designed to assess whether the Portland oil pool contains a commercially viable volume of oil.

As they've worked over the well since then I'd assume that the testing sequence was restarted and the furthest they've got is the first of the 3 planned flow sequences, but maybe no further than flow optimisation. The testperiods will be separated by pressure build up periods.

For a formal declaration of commerciality rather than UKOG (or HHDL) saying thatthe flow rates were commercial (which they said previously about the first test rates) a CPR giving connected volumes and production estimates will be required. As this involves analysing the data gathered and history matching a (computer) reservoir model it won't be instant and depending on complexity could take weeks or months.

This won't stop HHDL advancing plans for production based on early results.

DHC

I admire your restraint but there are a few minor errors with your post plus some comments. Hope this helps with your next post:-

You posted:-
'UKOG reached 11p on the Broadford Bridge drill when there was no certainty that they would encounter oil - and well before they got any real depth on that drill.'

Not true.

UKOG reached 11p on 26 July. At that point there had been multiple RNS (from 23 June, price 22 June about 1p) stating that there were oil filled fractures throughout the Kimmeridge from KL5 to KL0, they RNS’d reaching TD on 10 July.
Only the Portland was restricted by pump size.
The reason, or even what, they perforated isn’t known. The fact they have not mentioned it is interesting.
The BOP was of normal size and is a safety requirement during the workover. It is now removed.
The SP retreated because of the failure of BB. The additional shares issued kept the price depressed.
The company status has changed to an operating company. There was no restriction on producing as an investment company {Avington, Horndean) through investments eg Kimmeridge O&G.
Only the Kimmeridge limestones are perforated. It is unlikely the shales will be perforated and tested (even shaley limestone didn’t flow in BB). They may test the Lower Kimmeridge Limestone 3 - KL2?
The previous RNS’d flow rates were (no mention of flow rates in Standard article):
Portland 168 & 323 bopd
KL3 464 then 456bopd
KL4 901 then 838bopd
I haven’t recently watched the DL interview but the headline was 'The Gatwick Gusher gushed again, a lot quicker than we expected'

Must have forgotten that on Feb 22 he said: 'HH is totally ready to flow. No cement plugs anywhere. The well was prepared to immediately bring oil to surface'
I'm not getting involved in HUR vs UKOG.

Pboo

I think you'll find you're looking at production in cubic metres.

There's about 6.3 bbls in a cubic metre.

Apart from extended well testing in 1998 production actually commenced in 2002. (have a look at the admission document)

Jiffy,

Directors have to declare any shares they hold in the company.

Also on page 49

'Share based payments are non-cash remuneration by way of the issue of share options in the company.'

Options.

Yawn,

Legalease,

maybe you also recall that UKOG in their original Environmental Method Statement for Horse Hill said that the Kimmeridge might need swabbing to obtain a sample - which is what I said, and unlike posters and tweeters who never apologise if they get something wrong I did and admitted I was wrong.

Maybe I was a bit negative during the BB build up and testing...………..but I shan't be apologising for that.

As for the Portland, that was a different matter, but it did flow better in 2016 than I expected, but I certainly never said it wouldn't flow

Anyway the post on this thread you are presumably so irked by - have you any actual comment about it's content - seems like so many others all you can do is make some sort of innuendo about my motives.

I'm sure you've never got anything wrong, mind you from your history:

UKOG RE: Expectation 18 Jul '18

I see 8 to 10p by mid August:)