Member Info for Penguins

'TALKING TURKEY: Pinarova-1, 6 km north of the Basur-1 oil discovery, is designed to test a hypothesis, supported by well and seismic data, that the active light oil seep found last summer is connected to an oil accumulation'

Not sure it's a surprise but no mention it's much nearer Kezer-1 than the seep that only made it into a shothole. Kezer-1, described by UKOG as near the apex of the structure, which flowed water with an oil cut on test - if that's what happens near the apex let's hope pinarova it isn't too far down dip.

Not long now to find out how much oil, how much water - I wonder how many are planning to hold for any testing, as long as there is some testing.

That's the first problem sorted - the thread.

Wizard you posted 'Do you think that UKOG will look for a partner or go it alone for future drills at HH'

UKOG has spent an inordinate amount of cash exclusively raised by issuing shares for drilling, building the site and facilities and to owning most of HH, including £12mm for 35% in 2019, when incidentally they already had a report from RPS on the Kimmeridge they quote for net 2C resources (1.4mmbbls) but decline to allow their owners to see. You'll note these resources are somewhat less than the hundreds of millions of barrels you and others like mentioning for the Kimmeridge - perhaps that report led to UKOG not drilling the HH-1 sidetrack. Any farminee would cerrtainly see that report and all the ewt data.

As for the Portland sofar they have proved it can produce modest volumes of oil before declining and then produce significant water as well, except for the horizontal which proved that unpredictable fractures exist that can overwhelm oil production. Any farminee would also see Ll the ewt and production data for the Portland, including HH-2z.

Excellent opportunity to risk drilling a well that declines rapidly, or another water well or finally drill a Kimmeridge producer UKOG have avoided for 3 years.

What's not to like?

'if it has government backing'

In the 2030s maybe......if heap enough

'The government has set out a programme of work that will be undertaken to establish the additional steps that are required to meet the ambition of having the option to deploy CCUS at scale during the 2030s, subject to cost reduction. In delivering this work, government will work collaboratively with the CCUS industry, including existing projects.'

Anyway they seem to have enough of a problem getting round to injecting the water coming out back into it.

'Pinarova will produce oil'

How much oil - how much water? Quite possibly not enough oil, quite possibly too much water?

Otherwise why hasn't UKOG given any details of the Kezer test?

Kezer was drilled in 2018 - why wasn't it mentioned as a target prior to the latest seismic campaign which was meant to prove Basur-4 as a valid target?

So if Pinarova isn't successful will there be enough money to drill Basur-4 - and is that going to be guaranteed success in Turkey - 'deliver success'?

UKOG haven't mentioned what they expect from Pinarova,the proposed well, an appraisal of Kezer-1 which was near the apex of the Pinarova structure that flowed water with an oil cut on test - but give no details of that test apart from a subjective 'heavy oil cut' - UKOG say if successful it's similar to Basur-4 but don't say anything about Basur-4 either - perhaps they mean as bad as each other?

Ocelot and his 'net' assets.

Unfortunately the only assets backed by oil production are Horse Hill and Horndean that totalled just over £5.5mm.

The rest is money they've spent on projects that have yet to prove successful or unsuccessful. Not sure what will happen to the money spent in Turkey on Basur-3 but what the total of £30+ million was spent on would be interesting to know as it's what the 'Intangible assets' are.

Yep,

They may have enough for the next thing - but never seem to want to miss out on a raise when the SP does rise on hope, just in case (!) it faills - or perhaps they're less sure of their claims of 'potential' success - but in May 2017 in the build up to Broadford Bridge-1:-

'UK Oil & Gas Investments PLC (London AIM and NEX: UKOG) announces that it has today raised gross proceeds of £6.5 million'
'The net proceeds of the placing will be used to supplement the Company's existing cash balances and to fund UKOG's near-term growth strategy to further develop its leading position in the Kimmeridge Limestone oil play and five conventional oil and gas discoveries in the Weald.'

Growth strategy......five conventional oil and gas 'discoveries' ..... over promise, under deliver.

Maybe this rime, maybe this time.......

After the ewt had started in 2018:-

2 July 2018
'Stephen Sanderson, UKOG's Executive Chairman, commented:
Together with the funds raised in June, the Company has now secured £10.5 million of investment during the last month, which given UKOG's current plans, mean that it has sufficient working capital for the next 18 months.'

Then on 4 July 2018
'Successful Placing to Raise £2m'
Funnily enough there wasn't a comment by Stephen with that raise.

Then on 27 March 2019 - 9 months later:-
'Successful Placing to Raise £3.5 Million'
Again no comment from Stephen.

There's numerous instances of UKOG raising when they claim to have enough for the work envisaged - even the last two raises:-
27/07/22:-
'The placing's proceeds will be sufficient to acquire and process the further planned, but previously unbudgeted, Phase 2 seismic'

Then on 12/09/22:-
'to help deliver the Company's previously stated near term goals of completing the Phase 2 Turkey seismic programme.....'

Wizard,

'by leasing land within its UK licence areas developing wind power and solar power' ?????

how much land has UKOG on its sites to fit in any wind power. The licence allows them to explore and produce oil and gas. Putting even one on a site wouldn't work if they wanted to drill - though they don't seem to be too interested in doing any. Solar has been mentioned for Horse Hill - probably more to provide on-site power than any significant export.

As for Turkey - of course a new revenue stream would be great, but UKOG have yet to indicate what they expect if Pinarova was successful. The Kezer well was tested and the water with an oil cut flow rate should be known. Although one of those misleading initial flow rates it should help in determining what might be possible. Unfortunately the Turkish government can insist on the well being produced even at low flow rates - no doubt they would be happy to receive their 12.5% share of the oil without having to pay for the OPEX.

SS clearly believes there is a message to be promoted to the market.

He has in previous years - just the projects have changed.

2017 - Broadford Bridge, before it was tested (31/07):-
'Whilst the delivery and completion of the well as a potential oil-producer is not as swift a process as a simple rig-based drill stem test (or DST), this configuration is designed to provide significant future cost and potential test performance benefits. This is a sound investment in the future of BB-1 and is a key necessary step to help us achieve our corporate goal to establish first Kimmeridge production by the end of 2018/early 2019.'

2018 Horse Hill ewt (18/10):-
'The better than expected EWT results have robustly demonstrated that the Portland has significant daily production potential in its own right, which could see the first planned horizontal producer attain sustained oil rates of 720-1,080 bopd. If realised, these rates could make the Horse Hill Portland oil field one of the UK onshore's top producers. We also eagerly anticipate the possibility of combined long-term production from both the Portland and Kimmeridge, an exciting and potentially transformational prospect for Horse Hill and the Company'

2019 Horse Hill horizontal(30/09)
'The spud of HH-2/2z is another UKOG landmark milestone and a key enabler towards establishing long term oil production at Horse Hill. We are confident that the meticulously planned HH-2/2z operation, the first of two planned horizontal wells in the Portland oil pool, leaves little to chance. We look forward to a safe and successful drilling campaign and to the realistic prospect of HH-2/2z delivering a significant increase in UKOG's net oil production and associated revenues before the end of 2019'

2020 Turkey (23/07)
Whilst we remain committed to growing our core UK business, this was an irresistible opportunity to expand our horizons and to expose the company to potentially transformational recoverable oil reserves that can be rapidly monetised.
The quality of the Licence's geological address and opportunity is compelling..............'

2021 Basur-3 (07/04)
'As detailed in the Company's announcements of 14th October 2020, January 15th and 23rd March 2021, Basur-3 is the first key step towards establishing the commerciality of the Basur-Resan Mardin oil pool, calculated to contain potentially transformational discovered recoverable oil resources'

2022 Loxley Farm out (20/07)
'the Company will now implement a pre-planned farmout programme, whereby the Company's costs would be either fully or part carried by any farminee'

& Horse Hill (30/06)
'UKOG can now further expedite its plans for produced saline formation water reinjection at Horse Hill during 2022'

2023 - see ocelot's posts.

UKOG is an AIM oiler, almost by definition the projects will be, and have been despite the only positive statements, very risky.

Joey,

£600,000,000+ mcap, bring it on (with so many zeros I had to check that with a calculator).

Care to share your inputs to that, or is it just vacuous ramping?

Even at the heights of the Broadford Bridge nonsense about billions of barrels Kimmeridge oil recoverable across the Weald the mcap only briefly reached a bit more than half that.

Maybe UKOG could place another 21 billion shares and fund the Portland gas storage project?

BTW you do realise the current SP is 0.0665p not £0.0665? In which case a halving of the SP could be a less ridiculous prediction than a 4,600% rise - or are you predicting a 50 to one consolidation with a 10% drop in SP?)

Might do better with a 'wouldn't want to be out of this over the weekend'.

ScarletVixan,

The good law project may well be a left wing supporter of lost causes but you've linked a 2014, article about one person's opinion who 'declined to give details of those operations, saying: “That is my interpretation.”' interpretation - ie probably one of many 'interpretations' on whatever the evidence was.

Since then the main proved recipient of Russian money in the UK has been the Conservative party donated by Russia oligarchs, and to a lesser extent other political parties - the party that has actually stopped fracking, not merely protesting at the gates or elsewhere, or trying to stop O&G production through the courts - where there is no expectation of them winning.

Though I also don't believe the Russian money given to the Conservatives influenced that decision.

For Loxley the risk of losing in the High Court is small vs the risk of complete failure which even UKOG put at 30 to 40% - or a greater risk that the reserves and production 'expected' are much smaller than predicted in the 2C case in the CPR.

Ocelot,

The only future project specifically mentioned was the storage of gas at Saltfleetby. Just because Lucan gave a polite reply to a question about farming into Loxley doesn't mean they want to pay 100% of Loxley's drilling cost - or any uplift, or participate at all. Angs are in the process of taking on a CLN for £3mm which is probably going to be swallowed up by cost overruns, and to the delight of SH another 150,000,000 warrants at 1.65p - that should help keep the SP down.

It Will be while before they know what the new well will deliver - as a SH I hope that it's extremely successful - but hope they don't start borrowing to buy into risky appraisals.

It would be nice to see both UKOG and ANGS sort their own production out before either issuing shares or borrowing cash to pursue risky ventures - if UKOG hadn't gone into Turkey and expedited HH maybe things would be very different here.

Ocelot,

what is the reward? It would be interesting to know, UKOG haven't said what they expect from Pinarova-1.

The current oil and gas properties are valued at £5.432mm (HH & Horndean). There's property plant and equipment valued at £1.629mm plus an unknown amount of cash - we will see soon what was left at the end of last September - but there will have been significant expenditure since.

MCap is about £14mm - so there's scope, even if Pinarova is successful, for it to fail to make the tangible assets total more than £14mm considering HH was valued at £3.63mm last September.

Just looked at The Solent Cluster website, 54 members, seems any company interested can join - even Southampton FC - though no mention of UKEn or UKOG yet - maybe a bit slow with the admin.

Though there's a separate big boys club:-

News
Dec. 8, 2021
ExxonMobil, SGN, Green Investment Group sign MoU to explore potential for Southampton Hydrogen hub
SOUTHAMPTON, UK – SGN, Macquarie’s Green Investment Group (GIG) and Esso Petroleum Company, Limited (an ExxonMobil affiliate) announced today that they have signed a Memorandum of Understanding (MoU) to explore the use of hydrogen and carbon capture to help reduce emissions in the Southampton industrial cluster.

Adrian posting as MontyChelli,

give it a rest:-

' thanks to exellent reporting by @davethedrill1 on twitter'

Just confirms you can't be trusted to post honestly on this board - but there's no point asking if you are Adrian as you crossed that truth boundary last time you visited this board when you posted that you weren't Adrian / davethedrill1.

If only you'd keep to ramping........

Pity there isn't any indication of what a success case might be so that it's possible to know what uKOG / AME are expecting. Too often they've fallen far short of what they expect, perhaps this time even what they expect isn't that good so they're keeping quiet - better to let posters and tweeters speculate.

Doing something just because it's cheap is not necessarily the best option - but then it might indicate how poor Basur-4 is - cited as a posiible follow up if Pinarova-1 is unsuccessful.

Billy,

So the oil production figures for the only field that UKOG operate aren't of interest vs a risky appraisal of a shallow structure (perhaps the only 'good news being it's cheap to drill) where a well placed at the apex (top) flowed water with an unspecified (strong?) oil cut.

Up about 13% to an average of about 55.5bopd from 49.1bopd

The higher production came with a penalty of an increased water cut to 37.2% (possibly the highest ever for a full month) with an average of about 32.9bwpd, up from 27.7bwpd in November (water cut of 35.3%) an inrease over November of 18.7%.

12.9% increase of oil production meant an increase of 18.7% increase in water production - illustrating the problem UKOG have balancing oil production and water production - leaving the question why haven't they expedited converting HH-2z, though it's quite possible that the water production will increase massively with only a small increase in oil production.

As I haven't been able to put the figures into my spreadsheet E&OE - but these look about right.

Pboo,

This is a ridiculous argument. The amount of gas produced is entirely dependent on the amount of oil produced because it's dissolved in the oil.

There may have been a stronger flare when the Kimmeridge was being produced because it has more gas dissolved in it - more than twice that of the Portland oil - thèy gave details of the Gas Oil Ratio (GOR) in one of the geological reports. The GOR from the 2016 testing was 120scf/bbl for the Portland and 312scf/bbl for the KL4 and 287scf/bbl for the KL3.However they are not producing the Kimmeridge.

The figure of 10 tonnes per day was based on the initial claimed production for all 6 wells producing about 3,500bopd exporting 16 tanker loads of oil a day if you visited the site you might have noticed that there aren't 16 tankers a day - now there aren't 16 ta kers a month even including the waster tankers.

Looking at Ibug's tabulation the ratio of gas to oil has been variable but has declined as the oil flow has declined.

Wizard,

What you choose to forget is that many of those who posted so positively, and some still do, probably didn't, unlike you, believe every word of what UKOG RNS'd, tweeted or said in interviews.

You say :- 'Has everything gone well, right and as we had all hoped or expected?'

Well I'd say 'Has everything gone as I had expected? More or less. But not as I'd hoped.

As for the distractions - geothermal - not hot enough in SE England for anything other than perhaps warming a greenhouse or two - gas to hydrogen - all they would do is sell it to someone else to do the converting. As for Portland storage it isn't fully planned and not funded and no cashflow for years.

As for Turkey they're nor even drilling the transformational Basur - Resan structure - instead appraising a well that flowed water with an oil cut. In the Weald Loxley didn't get farmed out - the CPR seems to be a hope to resurrect it - though would a company that has already reviewed it be swayed by a CPR that has several red flags of it's own - and HH is going to save £250,000 a year from water injection - that's not going to rerate the SP, nor fund further wells.

How many times have you posted over the years about a new CPR. The problem for UKOG is they would have to put it in the public domain - whilst Loxley would only be expected to have contingent resources and very little hard data to base it on, and RPS just accepted UKOG's mapping.

Whereas HH would be scrutinised in detail - you do realise that UKOG had a report done by RPS on the HH Kimmeridge in June 2019 - they use the contingent resources in the annual report but have never mentioned it otherwise. Those 2C resources net to UKOG - 1.4mmbbls.