Member Info for Penguins

Wizard,

The gas is 'associated gas'. This means like a fizzy drink it's dissolved in the oil. Hence if the pressure drops below 'bubble point' (as in opening the bottle) the gas comes out of solution - they don't want this to happen in the reservoir so normallly they would control the pressure in the reservoir at the well by restricting production.

For years you've been claiming that UKOG aren't producing as much as they could, but fail to explain comvincingly why As for 'Maybe you could consider the possibilities of how many Wells and how much gas may be produced in the future?' - that's what everyone has been wondering for the last 3 years - and yet no progress on that front.

8 June 2020 I wrote this in a post, about the production equipment purchase from PW:-

'Is this kit any good for the planned development of 6 producing wells with supposedly far more throughput. If there's success elsewhere they could move it on for testing but that's probably going to be a while yet, but when will the planned development commence? - the reason for renting is the ability to shed equipment when it's no longer needed. Is this admitting that this is 'the development'.

Looks like it was / is.

Strictly speaking he was trying to infer they were working on HH-2 :-
Adrian The Fool on The Hill@davethedrill1
·Jan 9
#UKOG Seen them on HH2 works before. They are near to where the coiled tubing tower stood.

As for the RNS this morning.

The water produced is unlikely to be from a water leg in the Portland because generally, apart from the layer that produces (as UKOG put it) the lion's share of oilin HH-1, the Portland is not a very good quality reservoir.

The water being produced from fractures is almost certainly not replacing fluid sourced from within this better quality layer so in fact it's probably more like half the oil it's replacing - but the pressure of the water in the fractures almost certainly dictates what pressure they need to maintain the reservoir at. As the water is going to be injected into the restricted relatively good quality reservoir layer in the Portland, near or into a fractured zone, where the water goes could be a major uncertainty.

Interesting to see what happens.

It's not surprising that SS suggests drilling down into the cash flow figures rather than the technical assessment. Ocelot is also directing posters to UKOG's price forecast rather than RPS's - which still looks good, though there should be health warnings- on page 68 of the report.

Any company considering farming into Loxley would definitely take into account the risks that exist to the assumptions made to arrive at the flow rates and GIIP figures that the cashflow forecast is based on - as should any investor intending to hold presumably until the well is drilled next year.

Why do you keep using the figure that resulted from UKOG's insistence that a flat forward price be used rather than RPS's forward gas price scenario.

All these figures are a fantasy until the first well is drilled, next year, and as RPS put it - 'Although
it will be designed and drilled as potential production well, it will still have an element of appraisal as it must first prove commercial flowrates are achievable which will depend on the height of the gas column and reservoir properties encountered. For this reason, the recoverable volumes predicted in this report are classified as Contingent Resources, Development Pending in accordance with the PRMS.'

Ocelot is assuming that the contingent resources are already proved and reserves yet there are several 'red flags' in the report - not least of which is that the suggested flow rate from a single well was calculated by another specialist company and RPS said this about their estimate:-

'RPS is inclined to suggest that the data is too sp**** to make any definitive interpretation and therefore is of limited use in defining likely future well performance. Well productivity therefore remains one of the major contingencies'

Over the years there have been multiple claims of riches in the future based on reports containing speculative calculations of resources or flow rates. So far every one of these has been proved spectacularly wrong.

At least UKOG are not claiming anything other than cost savings and ultimately more recovery, not a significant improvement in daily production which some posters have claimed would result.

As they are injecting into a well located for production there may be other issues with the injection as it will be at the 'heel' of HH-2z and closest to HH-1 - in normal circumstances the location would be decided on factors such as effective sweeping of isolated oil pockets or placed within the water leg - despite the water production from HH-2z there was no suggestion the well was not within the oil column, just fractures feeding the 'overwhelming' water production that stopped the well being used as a producer at the heel. The worst outcome would be that these fractures may provide a path to HH-1 if they trend in that direction.

The cost saving suggests currently the cost of disposal is about £24 (about $29) a barrel plus whatever the cost is per barrel to inject - based on last November's appox 28bwpd production.

There will be a test period at the start of injecting which will determine how effective it is and what's possible - let's hope there are no problems.

Ocelot

Over the years there have been endless calculations of the riches to come from the £1 party onwards - the ambition for the calculated future SP slowly dropping as the number of shares increased and the possible rewards decreased.

The only rises have been on false hope as wells are drilled, tested (not Basur-3), and then proved not as good as UKOG claimed.

Next up let's not forget is Pinarova-1, never before mentioned as a target, appraising a well that flowed on test water with an oil cut. Not such a bad thing if the well was down dip from the crest - but not good from a well described as being at the apex by UKOG.

Ells,

Do you understand that most of the posts are pointing out the gulf between what you (ocelot and others) post and reality - especially if it's based on already superceded data (Kimmeridge drilling and likely recoveries), or forecasts on future expectations that are highly provisional (Loxley).

Ells,

You probably don't understand the importance of this new idea of a single well development and the issue that it completely relies on the Kappa calculation of possible production.

UKOG probably ran an economic case drilling four wells up front, each producing their original estimate of 5mmscf/d, and found that the up front cost destroyed the NPV calculation with the time lag it would take to install the facilities and pipeline before first sales gas.

In a sense you're right that they're covering their back. If the flow rates are poor thay can say this work was done by external specialists making assumptions they wouldn't, and as they could not dispute it because of the lack of data they had to use it.

Gives them the get out of a 'we told you so' statement.

Pity Loxley-1 is not going to be drilled until 2024, long wait to find out whether it 'will be' commercial, or not.

Els I suggest you read the CPR - it's a specific statement about the flow rates that Kappa calculated and the development using only one well depends on it.

Ells,

I'm sure your analysis of the CPR is rigorous.

Any problems you noticed like RPS saying about Loxley-1:- 'it will still have an element of appraisal as it must first prove commercial flowrates are achievable which will depend on the height of the gas column and reservoir properties encountered.'

They don't seem quite as certain as you.

Ocelot,

Yet again you forgot to mention - if Loxley proves a commercial accumulation.

All these fantasy projected revenue figures are based on contingent resources and plan based on flow rates determined by Kappa that RPS stated:-

'RPS is inclined to suggest that the data is too sp**** to make any definitive interpretation and therefore is of limited use in defining likely future well performance. Well productivity therefore remains one of the major contingencies'

Can you read?

The question always was 'recent'

'Ells Thu 20:27
Can you show a recent quote where Steve Sanderson has said:'

Those words may be in that article but it isn't recent, they put plans in for four wells in 2018 can you show it is from UKOG.

Sometimes it takes years for the truth to emerge from UKOG - posters have been certain the Kimmeridge would be put on production or drilled again for years. We shall see.

So you post to 'wind posters up' - it's irrelevant who started the thread - you commented '1p....very conservative'

Well it just makes you look ridiculous - constantly claiming what an expert you are and how right you've been when you can't even show a post supporting the claim.

Do we assume that all this old BS about the Kimmeridge isn't what you balieve but just to wind posters up?

well you're wasting your time - just quoting out of date information that you don't understand that has been superceded by testing - the last one reported for the Kimmeridge which could indicate the flow rate was dropping 25bopd every day.

Optimism based on hope, and out of date information.

as for your response about the supposed SS quote - they're quoting something from 2018 when the company submitted the planning application 'the company has put forward plans to build a further four, which it says would produce millions of tons of oil over 25 years'

'put forward plans - something they did in 2018 - and it doesn't even look like it's a statement by the company

What I asked was 'Can you show a recent quote where SS has said he ''wants to secure UK energy by drilling the Kimmeridge to release millions of barrels of oil''

They've had permission to drill the 4 extra wells since September 2019.

The sarah Finch challenge is a splendid excuse for UKOG apologists to cite as an excuse for no progress at the site as long as they ignore that UKOG have never claimed it's the reason, and ignore the obvious clues that both Portland and Kimmeridge have 'issues' with high decline rates, and although no water was produced from the Kimmeridge none was produced from the Portland until it was continuously produced.

and here's a prediction in a reply to your post commenting that 1p by year's end was conservative:-

'RE: back to 1p + this year 08 Sep 2022 09:54
Exactly why would the SP get to any of these silly predictions with nothing really happening until next year and likely the herd playing with the frackers?
Just our own faithful band of rampers trying desperately to deceive any passer by with wild claims about oil, gas and fracking.'

and in case you deny it:-
'ells_valexpert
Posted in: UKOG Posts: 3,241
Price: 0.12 No Opinion
RE: back to 1p this year 08 Sep 2022 09:23
1p … very conservative'

The price dropped after 8 September........

and you bought in July - the SP dropped, as many predicted below the placing price of 0.0875p, and rose in September on the false premis that Truss / Mogg fracking would help UKOG.

There were a lot of flow tests of the Kimmeridge the last report was of 5 days up to 23/12/19 starting at 350 bopd, and averaged 301bopd - any one understanding maths will realise to only average 301bopd after starting at 350bopd means the flow rate declined rapidly.

and actions speak louder than words with UKOG - they stopped that test in January and shut in the Kimmeridge saying they were considering dual completing the well. It wasn't mentioned again after early 2020.

More ridiculous lies and deflection.

Nevertheless having claimed something maybe you could find the non-existant quote from SS and maybe you can find your non-existant post that predicted a SP of 0.13p from 0.08p.

Ridiculous lie and deflection.......

and totally made up 'I know you like the wildlife Penguins. Unfortunately energy security comes first.'

To start with you don't know me, nor anything about me apart from I can read RNS and other reports and have gleaned enough information from them over the years to better predict the outcomes of UKOG's adventures that have seen results than UKOG seem able to - or at least what they RNS they expect. Give me that technical knowledge and research over charting any day.

Just because 1.4mmbbls produced over maybe decades won't provide energy security to the UK doesn't mean I'm in any way against O&G E&P.

While you're finding the non-existant quote maybe you can find your non-existant post that predicted a SP 0.13p from 0.08p.

That's not what I asked - I'll try again.

Can you show a recent quote where SS has said he ''wants to secure UK energy by drilling the Kimmeridge to release millions of barrels of oil'

I'd refer you to the last annual report and accounts, page 17, and the 2C Kimmeridge resources - calculated by RPS in June 2019 - a report UKOG have only mentioned at the bottom of resources table.

and those 2C resources net to UKOG for HH..........1.4mmbbls - not even reserves.

Not sure that's going to 'secure UK energy by drilling the Kimmeridge'

So 'millions of barrels'?

All made up.......

Can you show a recent quote where Steve Sanderson has said:

he 'wants to secure UK energy by drilling the Kimmeridge to release millions of barrels of oil'

UKOG hasn't mentoned drilling the Kimmeridge anywhere recently - and certainly won't have used the words 'release millions of barrels of oil'

I presume like most of you posts it's just made up.

First the value for the 2C resources that ocelot quotes from the CPR is calculated using a flat gas price that UKOG insisted RPS use rather than the forward gas price scenario RPS, unsurprisingly UKOG's flat gas price is half as much again

It's also misleading to calculate value for comtingent resources as if it's cash in the bank in the future when there are technical risks that RPS mention but still use calculations based on values they don't appear to agree with.

There's also the fact that only when the well is drilled, it finds gas, and a successful ewt then performed can it be determined what reserves are in place and if the Kappa flow rates are achievable. This will decide if only one well will be required initially, and if the planned facilities will be anything like those proposed by UKOG - or even if there's a development at all.

Suggesting UKOG should be valued on the basis of unproved 2C resources today when the first well isn't planned until next year is ridiculous.

Ocelot,

Mis-match?

No.

when will you realise that 2C figures of resources have little 'value'. If it was reserves you might have a case.

Until the Loxley well is drilled you should heed what is said in the CPR under '1.5 Risk and Opportunity Assessment':-

'The Loxley-1 well is intended to be the first of two development wells within the PEDL 234 licence. Although
it will be designed and drilled as potential production well, it will still have an element of appraisal as it must
first prove commercial flowrates are achievable which will depend on the height of the gas column and
reservoir properties encountered. For this reason, the recoverable volumes predicted in this report are
classified as Contingent Resources, Development Pending in accordance with the PRMS'

RPS don't address overall risk numerically and seem to have accepted much of the work done by UKOG and previous contractors - but then the data available is not extensive.

This is what RPS had to say about the Kappa engineering work which provided the scenario of producing from one well initially with their estimate a single well producing 15 to 18mmscf/d:-

'RPS is inclined to suggest that the data is too sp**** to make any definitive interpretation and therefore is of
limited use in defining likely future well performance. Well productivity therefore remains one of the major
contingencies' whic

However there is an assumption in the P50 case one well prodcing 20mmscf/d - somewhat higher than the previous estimate of 5mmscf/d per well, and inexplicably higher than 18mmscf/d - until the second well is drilled in 2028 when depending on 'case' either production continues at 20mmscf/d (P10) or drops off (P50).

Seems very optimistic but I guess their 'risk' remarks covers accepting these other reports.

Also the £123mm was not using the RPS gas price forecast - it was a flat price requested by UKOG.