Member Info for Ribeye

I'm going on 22nd Feb for the 3 million dollar RNS.

Three. Million. Dollars.

Mwahahhahhhahhahaa

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.

The illiterate ******** as blocked me on twitter, probably for pointing out his hillarious hypocrisy.

What does it show?

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.

To be fair, I doubt Dave would be claiming credit for the Brent price himself.

David Brent? A chilled out entertainer

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?

Indeed - lack of clarity in the capital markets. Visibility of 4-5 years needs on oil prices and interest rates.

It sunk Sirius minerals too.

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.

Huge latent spare capacity? OPEC??

Ptttaaarffff!

Bice one Tom

Beers tastes on Pizza Parlour income eh Tom?

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).

Keith Neumeyer is someone that I inherently trust.

The gas BOE is not irrelevant because there is a near term (entirely industry standard) plan to monetise that with gas to grid power installation. Work out the BOE for the gas currently burned and that gives you an estimate of the future cash flow.

The NAV is also contained by how they can value West Newton/Biscathorpe, and by the pending CPR for Wressle.

Ok then, what part of your contribution here constitutes 'trading'?

Current forward wholesale Offgem UK electricity price weekly average is £80 - https://www.ofgem.gov.uk/energy-data-and-research/data-portal/wholesale-market-indicators - although peak load can be way over £150 MWh

Typical gas engine efficiency in the MW+ range is about 45% (just looked it up). Still £1500 per day at only 60 boepd gas production.

Doing the maths on Wressle, and extrapolating from the figures in the last update on 21 Sept:

$480,000 net to UJO after (restarting production on 19th August) in 33 days. Thats $14,500 per day.

The average oil price between those dates was about $70. The average price between 21st Sept and today is about $75 (and climbing).

If you divide $14,500 by 70 you get just over 200 barrels net per day (its averaging the 500 barrels per day production gross over 33 days).

If you multiple that 207 barrels by $75 you get $15,500 revenue per day.

Its been 16 days since the last update, so that's another $250,000 net to UJO

That's $500,000 per month net easily. Thats $6,000,000 per annum.

That's assuming an average POO of $75 and Wressle averaging only 520 barrels per day! So the upside is the oil price, the production rate and any revenue from gas to power.

Egdon is therefore pulling in $375,000 per month net minimum at that conservative estimate, so the risk of default on UJO's £1m loan in now tiny.

My gut feeling is that they will settle for Wressle at 750bpd with gas about 70 boepd.

Lets talk gas-to power - the energy evivalent of gas is 1.7 MWh per barrel of oil equivalent. Call it 1.5 MWh in a gas engine. That's 105 MWh per day. The current whole sale electricity price is >£80 per MWh (hTTps://www.ofgem.gov.uk/energy-data-and-research/data-portal/wholesale-market-indicators):

Lets say average of £70/MWh realised = £7300 per day gross, and £3000 net to UJO per day......£1m per annum.

Obviously there will be purchase/leasing costs for the containerised gas engine(s) and grid hook up costs, but then again the engines can be programmed to go harder at peak times when prices per MWh can be well over £150.

So essentially, with gas to power, on the Ashover interval of Wressle alone, UJO is valued at less than 5 times net income before G&A costs, with other production, royalty income and interest from load to UJO, West Newton appraisal, Biscathorpe, North Kelsey, Broughton and Kirklington and Duke's Wood, AND CURRENT CASH all valued at ZERO.

Which rather begs the question that Toonarmy on ADVFN and others have been asking......how has the company been allowed to be portrayed in such a lowly manner, that investors are refusing to believe what their eyes are telling them?

To be fair, the Half Year update is overdue compared with 2020 so it could be any day - THAT is when I would expect DB to start talking, and not before.

It will cover the eyar to 30th June, so the impact of Wressle on cash will be evident. It would also be an ideal opportunity to update of Wressle cash flow after the 3 weeks leading up to the last RNS on the subject. The oil price has been averging higher since then, and the average daily production may well be higher .

Again, the recent RNSs re Wressle and the West Newton development presentations talk about installing gas to power ASAP.

This is not rocket science and easy to do, and its actually normal to do (Singleton has installed gas to power). OK they can't monetise 80 boepd gas right now, but had the local council not ****ed things up via planning for years that would now be in place as well as several years of production and development of the other 2 intervals.

Also, when gas prices are HIGH, so are electricity prices. the 2 correlate massively. So high gas price = high income from gas-to-power (which at 80 boepd is a few hundred grand per year net to UJO).