Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
How about dressing it up with a simple concept of 'the ratio' - when 2 things are in equilibrium occurring in a fixed proportion, more of one means more of the other. Less of one means less of the other.
Could it be any more simple or complicated than that?
How do you explain it?
If 'another flare stack' is going on that pad, then they have more gas to dispose of because they have produced more oil because if they are limited by how much gas they can incinerate, then they are listed in how much oil they can produce.
Or, they are installing gas to power to monetise the otherwise flared gas, which also allows them to produce more oil.
**** me, you're a paranoid idiot aren't you.
I normally post on ADVFN under a different name, which is also my Twitter handle. I used to post on iii as pseudopolylageraemia during the good old Falklands days.
I posted my working out in the hope that someone would explain to me why I'm wrong, because it looks almost too good to be true. However, you don't seem to have anything to say on the maths I laid out. Is that because you don't have any understanding of petroleum geology or engineering or even simple physics?
The key to understanding this is the concept of the 'phase separator'. The fluids in the reservoir are very deep under ground, and at the higher temperature and much higher pressure a mile underground they are a mixture of oil, gas (and water potentially). When the fluid passes the choke the pressure starts to drop and the gas comes out of solution......a bit like when you unscrew the cap on a coke bottle, the pressure crops and CO2 separates into bubbles.......the phase separator sends the liquids (oil+water) and gas in different directions. There is no water in the Wressle fluids yet, the oil/crude is stored in tanks after it is settled to remove particulates, and the gas is being incinerated (aka 'burned') in the flare stacks.
Therefore is you increase the amount of oil you produce at the wellhead through a wider choke, you will increase the amount of gas produced because the phases are in equilibrium in the reservoir. This can change with time as reservoir pressure drops, but all the gas isn't sitting on top of the oil. The 'cap gas' there is is a useful 'pressure drive' for the fluids up the well bore.
Ever heard of a ‘gas to oil ratio’ nine tails, or you a clueless ****wit too?
Look it up. The gas come out of solution as the pressure drops after the wellhead. More oil means more gas.
GCSE physics anyone?
Jesus
Ask your doctor if ‘Not being a ********’ is right for you..
I’m a UJO holder since after the Wressle discovery, and I have in interest in small scale power production and storage having held Alkane plc shares for years until it was bought out and currently hold GSF.
You sound very desperate at the though if anything positive being said about UJO to the point of either pathology or an ulterior motive.
I laid out some simple maths from freely available sources starting with an RNS figure. The pad construction is clearly visible on drone shots doing the rounds. Either critique my maths (if I’m out by a factor of 2 then the numbers are still incredible) or sod off.
"Might be a bigger flare coming in."
If that's true, then the well is producing a massive amount of oil more than you are assuming, because the gas and oil are in proportion and more gas means more oil.
Or, they are doing the obvious (previously announced thing) and monetising an otherwise wasted resource with a small capex that will be recovered from income in a few months.
Which is it? It's probably BOTH in my opinion.
I've just put this on ADVFN. It looks like they are currently laying a concrete pad next to the incinerators at Wressle, which is the logical place to put the gas engine to generate electricity for sale:
If you go back to the RNS of 21st September it states 480,000 cu ft of gas produced per day. If you stick that into this calculator hTTps://www.eia.gov/energyexplained/units-and-calculators/energy-conversion-calculators.php you can extrapolate to monetisation potential....
480,000cuft = 525,168 MJ = 145.8 MWHr equivalent
Assume 50% gas engine efficiency = 72.9 MWHr per day = 3MWhr per hour
That is well within the normal range for containerised (modular) gas engine instalations: hTTps://www.edina.eu/gas-engines-mwm
Currently forward weekly wholesale electricity proces are £175 per MWh: hTTps://www.ofgem.gov.uk/energy-data-and-research/data-portal/wholesale-market-indicators
(Obviously you can do clever things with response and tolling too, potentially to capture peak prices)
So (conservatively at a reduced average sale price) 3MW x £100 X 24 = £7200 per day = £2880 net to UJO per day
£20,160 per week
£86,500 per month
£1,051,200 per year
Obviously if the well is producing more than 800 barrels oil per day, it will produce more gas proportionately, so there's upside not accounted for. There will be capital costs for the eqipment (or lease), but the capital value of the engine will remain high for resale if needed, and some operating/marketing costs but these shouldn't be big.
To be honest, I'm a both excited by this, and a little disappointed by the lack of information made available to shareholders about this by the JV. This is potentially highly material near term upside that could be supporting the SP, and could have supported the SP prior to the last disastrous placing.
EDIT: I've just found a quote for a containerised 800kW gas engine delivered for £21k from gogopower.co.uk, so the installation even it costs a few hundred grand will be paid back in weeks/months not years at current sky-high Electricity prices.
If it is, she predicted this Ukraine situation 12 months ago.
So either she's a just worked out the basic principles of supply and demand of oil as a price discovery mechanism, or she's a clairvoyant genius that we should worship.
Which is it mate?
I doubt it.
However, its part of a long term game of brinkmanship I reckon. Keeps the US options open to allow the Fed to 'defer' interest rate rises and protect the market.
If the major indices futures continue to fall over the weekend then they'll keep the talk going but soften a bit, then defer rate rises into the future with a dovish Jay Powell 'chat'.
All good for oil prices and serious scrabbling to maximise domestic production of hydrocarbons as that's where the pants that Russia can pull down are.
I opened up a few FTSE shorts this week. Though I was a bit early, but this evening makes that look like a good movie.
Waddocks Cross is fascinating. Its a shallow sandstone reservoir on trend with Wytch Farm with 29 million barrels mapped in place. More info here:
https://www.uogplc.com/assets/onshore-uk-licence-pl090-waddock-cross-broadmayne/
Water cut was the problem with initial production, but that's the kind of thing that is potentially solvable with side tracks and horizontal wells and completion jiggery pokery.
Its also near enough to Fawley to truck direct to a refinery. I presume it could also be trucked to Wytch then piped to Fawley.
Again, there will come a time when oil and gas is too value just to burn - most will used in plastics, petrochemical and fertiliser feedstocks i.e. like mining.....so we'll need O&G even when everyone's driving an EV and heating their outrageously well insulated homes with solar power and unicorn farts.
When oil isn't being burned as much, then some of the carbon pressure will be reduced. Afterall, structural plastics and carbon fibre is less carbon intensive to produce comapred with steel and concrete.
The world REALLY hasn't though this one through. Who'd have guessed it was intellectually beyond the immediate grasp of a Swedish teenager with a microphone?
On the other hand, developing discovered onshore oil and gas fields, a stone throw from the refinery or gas processing plant or electricity grid, is a much quicker and cheaper process......but it is a bit more subject to NIMBY *******s.
As you know, finding oil is one thing......getting it out of the ground and sold is a whole different ballgame with a timescale of years.
You can have hundreds of millions of barrels of prime waxy crude (that would get a premium to Brent) and it goes nowhere for a decade (see Sealion). The impotent whinging of Argentina is not then main reason its hasn't gone ahead, but the it was the mid decade sustained slump in oil prices and lack of clarity.
It takes 2-3 years to get a new offshore field into steady production from FID.....you got to build the well infrastructure and the FSPO, then you gotta drill and complete some wells. There as been so little investment in the past few years (because companies needed to achieve free cash flow in a low price environment and fight the ESG zealots to do anything) that there's nothing really on the verge of production that does anything than replace some of the decline from older fields.
Namibia, South Africa and Guyana are not mature provinces able to support a huge ramp up of field development. Sealion off the Falklands is drill ready with a very 'mature' plan to develop, but no operator and no financing yet.
The US Rig count has doubled in 1 year, but its still massively below the pre covid level of drilling in the Shale areas: https://ycharts.com/indicators/us_rotary_rigs
Shale well decline fast. There are a lot od DUCWs that could be completed for production but the US output has already increased significantly in the past year and Cushing is still pretty dry and at risk of leaving the March futures contract undeliverable.
Wressle will be knocking out 1200 barrels per day soon, 10 miles from the refinery with gas being monetised with gas to grid. Get Keddington singing again and wait for the NIMBY tide to recede under the weight of fuel poverty driven anger........then onto Biscathorpe and West Newton, both of which will be not insignificant in securing the the future of the local refinery and petrochemical works.
At last year's dividend rate, and a shar price of 710p, it looks like the yiled is actually 3.33% which is decent.....and highly sensitive to upside in the price of PMs (which are your true inflation hedge).