Member Info for Penguins

StockCheque,

Where has the government said that they are providing up front funding for H2 storage, let alone Portland Port.

The HSBM Market Engagement document is quite clear that the cash to develop H2 storage will be from private investment.

The 11 green hydrogen projects mentioned in the budget were for production not storage, and none near Portland Port with 2 each in NE England, NW England, S Wales and Scotland plus one each in the South East, East Midlands and South West.

This is budgeting funding for the projects offered contracts last December in the HAR-1 round - you'll note the delay between announcing 'winners' and the revenue funding being budgeted. Last December when the awards were announced the lions share of up front cash, even for these 'first of a kind' projects will be from private capital. The 2 billion is for 'revenue support from the Hydrogen Production Business Model'.

The storage round is not expected to be opened until next year with contrcts signed for revenue support in 2026 - the 2023 HSBM Market Engagement document expects 2 companies to be selected to go forward to negotiate their contract.

Certain posters are trying to frame UKOG as a certain recipient of an allocation - they aren't.

With the likelihood of depleted field storage being included in the round, which should require far less revenue support, it appears even less likely Portland port, which isn't close to the recent green H2 production awards or a industrial cluster, will be chosen with the first H2 storage allocation round targeting storage required near to production and industrialuse in the early 2030s.

At least you've identified what GBEn will fund - 'offshore wind, hydrogen power, carbon capture and nuclear power' - no mention of H2 storage or production as hydrogen power probably means power generation using hydrogen rather than natural gas. Contradicts your 'GB Energy will fund the project by investing in it along with the Private Sector, that is what GB Energy is being set up to do!' - do you read what you paste?

Ocelot,

More BS from UKOG.

until UKOG RNS that they have secured a site in East Yorkshire rather than still looking for one then they haven't got a site let alone salt caverns there.

As for Portland port (where there are also no caverns) and the other site in Dorset there's won't be any significant green hydrogen they could be connected to until there's a national H2 grid - and there's pipes laid to the Solent area.

......and finally the support for hydrogen storage will kick in when there's revenue to pay back the development expenditure. The national wealth fund isn't classed as 'private investment' - it's there to seed investment, not fund projects in the wrong place.

Funny how once upon a time any 'positive' but irrelevant news about oil was conveyed to this board, then gas when Loxley was being ramped now hydrogen only needs to be mentioned and it's likely tweeted and posted without those posting it realising how negative most of the news is for UKOG's Portland port venture with the majority of support being focussed on the NE and NW - hence UKOG searching for a site in E Yorkshire.

Stockcheque,

As for 'leading edge' technology - that isn't salt cavern storage - there has been salt cavern storage in the UK since 1972.

Stockcheque

UKOG won’t be getting funding from GBEn – it’s quite clear that storage projects are expected to be funded not by government, DevEx will be reimbursed through a revenue guarantee.

From the Hydrogen Storage Business Model Market Engagement Document

‘Applicants must provide evidence of the ability to attract private investment and secure funding.’

‘For the first allocation round, we propose devex is included as an allowable cost in the HSBM contract. This would allow project developers to recover devex as part of the revenue floor.’

ScarletVixen,

Not sure your list helps UKOG much with one project producing 7MW a few miles east of Plymouth, but 4 projects beween the NE and NW totalling oer 60MW - and those listed were projects that were offered contracts in December 2023.

Then there was the CFD AR6 allocation round for power generation where there were no offshore windfarms awarded support off the south coast.

Not forgetting the recent carbon capture government support for projects in the North East and North West of England for decarbonising blue hydrogen production.

The awkward truth (for UKOG) is that the government is clearly favouring the NE and NW. There are projects elsewhere but the concentration of projects is in the NE and NW of England.

Windy,

As for the million raised early August - sounds an expensive list - 'environmental surveys, engineering studies and other works necessary to submit applications for government revenue support in the first hydrogen storage allocation round.....' - as well as salaries etc, and apparently until last Friday, according to you, the loss making HH production.

But the million pounds now needs to last a lot longer, as EPP RNS'd 'DESNZ has indicated that it plans to complete the design of the HSBM in 2025 and aims to announce the launch of the first Hydrogen Storage Allocation Round during 2025......' when it was expected that the round launch would be inQ3 2024.

It's pretty obvious that the government is prioritising wind and solar energy generation, hydrogen production, and even carbon capture supporting blue H2 prodution, but the storage allocation round , which is revenue support not cash up front anyway, is trailing behind.

Madeitup,

There have been many 'company making' RNS over the years.

I can't tell you how many, but I can tell you how many have come true so far - none.

If BP shut down a producing oil field somewhere in the world it wouldn't necessitate issuing a RNS.

But a company that only operates one field perhaps should issue an RNS, though the last time they mentioned daily production was in early 2020 and it was over 300bopd with no water. Perhaps they feel they've already avoided mentioning losing about 270 barrels of oil a day so losing the last 30bopd is insignificant.

Now dabbling in very fashionable hydrogen storage, but this is a company that claimed expertise in O&G E&P making claims that were clearly far beyond the likely outcomes for every project embarked on - even those that never happened.

UKOG's planned H2 storage is in caverns - a very different business from O&G E&P, the only crossover is drilling the leeching wells, otherwise it's a 'utility' business that earns only once the caverns are made. Huge costs are incurred for years before the site would be operational and only then, in the current government support model, would there be revenue support to storage tariffs to start recovering the development expenditure.

Windy claims that Southern England needs storage - yet somehow Southern England has managed decades of natural gas usage without, and H2 isn't likely to be as universally used as natural gas. Portland Port is a failed, proposed, natural gas storage site.

Another problem facing UKOG is that cavern storage is expensive to develop so could well be undercut by depleted field storage in the next few years - the government's apparent decision to delay the allocation round could be because of the lobbying by Centrica (& EPP) for it to be included for revenue support in the first round.

As for Portwind they have 2 dates for completion, 2033 (first energy) or 2036 (grid connection), and 2 search areas - only one near Portland - of course, like Portland Port, if it happens at all.

Ocelot,

'Think the market has come to see UKOG as a play on hydrogen storage and the new government's net zero ambitions.'

If that's the case the market has got a very good measure of the difference between the governments net zero ambitions and how, and more importantly where, the government is supporting hydrogen projects vs where Portland Port is. Therefore there's a high risk that UKOG won't get government revenue support for Portland Port - betting with their cash on EPP in the NW ratherthan UKOG on the south coast.

There will probably be some pumpers taking their profits in EPP and trying again with UKOG but then I'm not sure many understood the EPP offering anyway - or cared, and the same will go for UKOG.

UKOG is a company that has hyped projects they've taken on that have already failed - and continued to hype them even when UKOG's attempt has obviously failed - but moving on to the next project before announcing the failure.

HH failed to live up to the previous hype during 2020 when production and silence about flow rates started, and the everlasting plans to convert HH-2z to an injector began, it's just taken a long time for some posters to realise.

I suspect the same will happen with Turkey where it wasn't a coincidence they were hyping it in 2020. Basur spectacularly failed in 2021 but the hype has been spun out since then with seismic and a no hope well - of course for most of this year they have been considering what to do in/with urkey (more likely delaying their exit as long as possible as it entails a cash penalty).

Is Portland port now being superceded by another Dorset site and a hoped for site in E Yorkshire as the next candidates in the event of failure to get revenue support for Portland Port.

Windy,

If you want to quote what you think you remember about others posts there was this guy on twitter who kept on posting here, despite being banned, going on about the revenue from HH being over a million pounds a year not that long ago - those that countered it didn't say it wasn't making any profit - it's just that the outgoings to be deducted from that were quite large as demonstrated by previous UKOG accounts.

A 5% drop when I doubt many are aware of it because UKOG has remained silent doesn't suggest it's priced in.

A rise of that size brings out the ramp

Yes,

UKOG mentioned it some time ago as part of their hydrogen hub plans for Portland Port but SEPL haven't progressed the plans to a point where they could apply for government support. Unless it progresses to a point where they apply in a hydrogen allocation round it isn't likely to happen. UKOG illustrate its position on one of the slides in their July 2024 UK Energy Overview presentation.

TH2,

EPP have RNS'd that the DESNZ has indicated that the planned hydrogen storage allocation round launch which was scheduled for Q3m2024 won't happen until next year with target contract signing ( ie certainty of government support) in 2026.

'DESNZ has indicated that it plans to complete the design of the HSBM in 2025 and aims to announce the launch of the first Hydrogen Storage Allocation Round during 2025. Through this process, a shortlist of projects will to be taken to due diligence and negotiations stage, with successful projects announced after approximately 12 months, subject to administrative and legislative arrangements including licensing.'

Funny that UKOG with their years of government contacts haven't bothered to mention this delay as getting an allocation of revenue support is central to obtaining the finance from one of these international investing partners. Then they've been pretty silent about the requirement to be eligible to even apply except for LOS - which was only mentioned in regard to any leased site owner providing one.

TH2,

The reported 'news' about the UKs hydrogen planning all seems to be about the NW and NE UK, not the south coast. Apart from UKOG PR about Portland Port the only recent story with any connection to hydrogen was that ExxonMobil were abandoning plans for carbon capture and storage to decarbonise their planned blue hydrogen production / refinery.

Whilst ocelot and TH2 don't seem to understand geography, much the same as their lack of knowledge about geology where UKOG's O&G E&P ventures were concerned, the NW and NE of the UK is a long way to ship hydrogen to and fro when there's no dedicated national hydrogen grid.

Current government hydrogen storage and transport focus is early 2030's - by the time the 2040 scenario UKOG choose to mention for southern England is being worked towards the likelihood is that cheaper to develop depleted structural storage will be available across southern England nearer the main demand centre of London.

Wrong conversion 'equal to over 3,150 bopd' - yep should be over 3,700bopd - definitely more than they produce currently in 3 months, could be 4 months if production continues to fall.

Ibug,

UKOG hoisted by their desire to feed the rampers.

By the 5 October 2018 RNS they had decided from the limited testing since early September that they would be drilling production wells that might, for a very short period, produce over 500 tons of crude a day, equal to over 3,150 bopd (about what they're producing in 3 months currently).

Has echoes of installing what UKOG suggested was a production completion to carry out testing in the Broadford Bridge well before even testing the well - only to have to remove it to carry out testing because the well hardly flowed - although in retrospect that was an accurate test of the Kimmeridge.

Is Portland port going to be yet another example of UKOG trying to run before they've learnt to walk - rushing into something that looks to be a certainty before fully understanding what they're getting into and having to backtrack.

TH2,

It was Turkey that UKOG turned to when it was obvious to them that HH was no good for both Portland and Kimmeridge production, announcing the Basur Resan fleecing in late July 2020 when significant water production, and ever lower oil production, had already started a couple of months earlier.

Portland Port was a distraction option from Turkey being found to be useless even though they continued with the oil seep nonsense and Pinarova. It was originally going to be natural gas storage hydrogen ready. They probably eventually realised that more natural gas storage wasn't on the energy bingo card for 2030 so switched to hydrogen only.

But UKOG has never admitted that HH / Weald and Turkey are effectively dead in the water - as usual it's up to investors to realise from results followed by inactivity / silence - some a lot sooner than others.

Given the obvious reasons for past switches are the two new hydrogen storage sites, one optioned in Dorset the other in E Yorkshire not yet secured, preparation for bad news about Portland Port as surely even UKOG don't believe they will be handed support for 30 to 60 percent of expected UK hydrogen storage needed in 2050?

Ibug,

I suspect ocelot knows that, but hopes to have sold before it dawns on anyone, just reading the articles ocelot's wouldn't convince anyone that UKOG have a 'winner', even ocelot.

To compare EPP's proposal to UKOG's is not a good idea - UKOG have wasted 2 years and untold cash on Portland port only to find out last year the government is favouring the NE and NW of England - and this year by supporting H2 green and blue production, including carbon capture and storage projects and offshore wind, there's also the early 2030s market for H2 anticipated from nearby industrial clusters.

Worryingly for UKOG the government seems to have adjusted the application eligibility to include non salt cavern geologic storage - which also puts Centrica into play in the North Sea, maybe even Wytch Farm in the South in the timescale to 2040 anticipated needs.

Already Humbly Grove is being touted as an H2 storage possibility, owned by a subsidiary of EPUK a wholly owned subsidiary of a large European company heavily involved in gas infrastructure including storage.

Still waiting to see the case for Portland port that compares the proposal against the government application and assessment criteria positively. Even Southern England H2 consumption in 2040 is predominently London and S Wales.

Masked Newton,

I posted that on the wrong site, thought I was replying to someone on UKOG - but maybe you need to understand what EPP are doing

From EPP site, RNS 6/8/24:-

'EnergyPathways is developing its Marram Gas Field, located in the UK Irish Sea, as a major gas and hydrogen storage facility, to be known as MESH. The facility is being designed as a zero emission, fully electrified facility powered by existing renewable offshore wind.

Once operational, MESH will produce the low emission natural gas contained within the Marram Gas Field to displace the UK's high emission LNG imports, which are estimated to have a carbon footprint intensity ten times greater than MESH supply. The gas supplied from MESH may be further decarbonised with green hydrogen production to harness the abundant renewable offshore wind power generation capacity of the UK Irish Sea region.

MESH will transition to full-scale gas storage operations'

Maybe EPP are stressing the 'fashionable' H2 storage side of things but before EPP can store any gas in the undeveloped Marram gas field they need to produce it -

'Once operational, MESH will produce the low emission natural gas contained within the Marram Gas Field'some interim cash flow

Not a bad thing as it will give them cash flow whilst waiting for H2 storage to be needed and connected up.

UKOG have a planned H2 storage site in the wrong place - EPP are planning to produce gas in the Irish Sea, which has plenty of infrastructure already, from an appraised discovery, which will give early cashflow, and then store hydrogen in a region with plenty of wind farms, planned green H2 and blue H2 production (supported by a carbon capture and storage project recently awarded government support) and industrial use identified with the Hynet pipeline connecting to it.

I wouldn't claim EPP's project is perfect but UKOG are planning to store gas that needs a ca80km pipeline to an area that only has one major industrial site - the ExxonMobil refinery. The carbon capture project planned by ExxonMobil was recently cancelled leaving doubt as to what will then happen to the planned blue hydrogen production - which is (was?) the only large scale H2 production planned along the south coast.

It's like saying all football clubs are the same because they play football - I wouldn't say EPP are top premiership - but UKOG behave like a Sunday morning kick about team - constantly on the scrounge for funding for kit.

Beware a 'serendipitous' raise on a pumped SP rise on no UKOG news. Must be getting near the point when they need another raise if they've been spending cash on all the studies, tests and reports for Portland port, working on the second Dorset site and trying to sort the East Yorkshire site.

Then there's the Broadford Bridge well to abandon and site to clean up, probably unwind the Turkish joint venture (3 more wells before June 2025 or a penalty payment) and possibly abandon HH if the water cut continues to rise as the oil production drops to a level where it's loss making - there's still a obligation 3D to shoot then another well at HH by mid 2025 - but they would only have to relinquish part of the licence if they fail to do it.

Then there's salaries.........last yesr £2million or about 170,000 a month - the board got £500,000.

UKOG have a site in the wrong place - EPP are planning to produce gas, which will give early cashflow and then store hydrogen.

It's like saying all football clubs are the same because they play football - I wouldn't say EPP are top premiership - but UKOG act like a Sunday morning kick about.

Beware the

Unfortunately after the first steps there doesn't appear to have been much progress. If anything they've had to take a step back.......

UKOG picked up an expired planning permission and has taken over two years so far to adapt it to a revised purpose - H2 rather than natural gas.

No committed funding - but multiple raises paying for undefined reports, studies and tests - and of course salaries for the board, employees and consultants.

Four LOS - only one of which has the full letter been published - that have kind words in the extracts shown but commit to nothing tangible - except RWE who offer to advise on the final design, which as UKOG appear to be hiring endless consultants at great cost and experienced in salt cavity storage Kris Bone now on the board, you would hope was unnecessary.

But the aim is to apply successfully in the First Hydrogen Storage Allocation Round, which has been proposed since UKOG embarked on the Portland Port project.

The eligibility for projects to apply, and the assessment criteria, are quite clearly defined in the Pathway and then the Business Engagement documents - the last of which was published in December 2023.

Was it coincidence that in early 2024 UKOG embarked on obtaining a site in Dorset, which they now have an option on, and one in East Yorkshire which they appear to still be negotiating.

I would, for anything UKOG are up to, look at what they are doing, not what they are saying (or what they are not saying) - though they have been silent about the contents of the 2 government publications and the delay in the Round - which was obvious because the schedule had already slipped. At least EPP (which only went public 6 months ago) RNS'd that the allocation round launch was delayed until next year, not Q3 2024.

No Portland Port progress RNS for 2 months since the second Dorset site option announcement, though there was the fourth LOS RNS from the Solent Cluster - effectively a letter from the club UKOG are (as UKOG describe it) a key member of.

Ocelot,

'EPP closed up 18.9%.'

Yes, but EPP are planning initially to produce natural gas from the Marram Field and use the field to store Hydrogen. They also intend to apply in the First H2 Storage Allocation Round which is, according to EPP, significantly delayed (no mention of this by UKOG). They also claim to have had several offers of development capital – as ocelot posted from Ben Clube’s interview:- ‘From 09:13, speaks of obtaining development capital: "had a lot of interest", "seeing a lot of interest, we've already received some offers".

EPP are operating in the NW that:-

Has multiple offshore wind farms producing excess electricity when demand is low for green hydrogen production - with more wind farms planned.

Had 2 green H2 projects awarded government backing in HAR1 in December 2023

Has government backed carbon capture supporting blue hydrogen production

Has the planned Hynet pipeline to link to industrial use.

But but but - we've got shares in UKOG that has been messing around with Portland port for over 2 years which has no pipeline certainty, no investment offers we've been told about, and generally no government support for anything significant H2 in the Solent area.

So UKOG is bound to be one of the two successful applicants in the First H2 Storage Allocation Round which from the pathway document will favour areas with H2 production, and H2 demand.

From the pathway document:- 'We therefore consider that a necessary first step to support hydrogen demand growth is through supporting the development of emerging regional networks to connect early production and demand to suitable storage projects that can be developed by the early 2030’s.'

From the HSBM document - to be Eligible to apply there must be an associated pipeline application and committed finance.

If anything another company applying in the First H2 Storage Allocation Round, looking likely to be successful, with their share price rising, is not good news for UKOG.......