Member Info for Serif

Here is the full extract of the relevant part of June 2020 FinnCap note:

The field was discovered by the Wressle-1 exploration well, drilled to vertical depth of 1,814m in August 2014. Petro-physical evaluation of MWD log data indicated over 30m of potential hydrocarbon pay in three main intervals – 6.1m in the Ashover Grit, 5.6m in the Wingfield Flags and 19.8m in the *****tone Flags.
Four intervals were tested between February and March 2015, flowing an aggregate 710 boepd during testing operations across the different intervals:
?Ashover Grit – free flow of 80 bopd and 47 mcfd (88 boepd).
?Wingfield Flags – free flow of up to 182 bopd and 0.456 mmcfd (258 boepd). ?*****tone Flags zone 3 – free flow of up to 1.7 mmcfd and 12 bopd (295 boepd). ?*****tone Flags zone 3a - 77 bopd when swabbed.
A September 2016 CPR identified gross 2P reserves on the Wressle structure of 0.65 mmboe in the Ashover and Wingfield Flags and gross 2C contingent resources of 1.86 million boe in the *****tone Flags.

The current development scope includes the re-entry of the Wressle-1 well, recompletion of the Ashover Grit interval and perforations of the Wingfield Flags. These two reservoirs will then be comingled, with the produced oil trucked to market. Reservoir engineering analyses points to an initial production flow rate of 500 bopd gross from the Ashover Grit interval, equating to a net share for Europa of 150 bopd.
At that rate, we estimate Wressle will boost Europa’s cash flow in FY2021 by ~£1.6m at US$40/bbl. We also estimate the project has an NPV10 net to Europa of US$3.3m (0.6p/sh) at our long-term Brent oil price of US$50/bbl.
*****tone development to follow?
Wressle-1 is only intended to evacuate the Ashover Grit and Wingfield Flags intervals. It will not produce from the *****tone Flags as the well is sub-optimally located for that interval. This is despite the *****tone already having two wells tests, as highlighted earlier. DST 3 tested

Hope this helps - producing from Ashover but incorporating Wingfield. Would like to know if there is anything more recent that supersedes this.

Hi Tovoc,
I am only going on the FinnCap note published on 9th June 2020 which is very clear about commingling the wingfield and Ashover grit reservoirs for phase 1 production. I have been unable to find anything more recent. You can read it on the bb on the relevant date copied over by Beacon. So if it’s not the plan where has the broker got it from in such elaborate detail - surely they have access to the relevant plans? You will also notice that wingfield is not mentioned for future development which makes me think this may be the reason - it will already be in production - and it free flowed without skin issues so may not need permission for extra stimulant. Now GP and others elsewhere below says it isn’t to be developed (but is this based on 2015 rns so could be out of date plans?) and I would really appreciate it if those saying this could quote or link the relevant document as requested previously - because I haven’t been able to find anything relevant on the internet or in the detailed appeal papers. If the broker is wrong then it would be good to know that.
Whateverr the answer no question though that the planning permission is only for 500 bopd at present, so even if it flows more would need additional permission to draw on this.
Sorry for long answer but it’s competing claims and without seeing the evidence for saying the broker is wrong and excluding Wingfield it’s hard to judge what this claim is based on.

Never have a better opportunity for a reset than now, as they are about to become very profitable all being well with Wressle. Show that they will keep overheads low and use the new revenue solely to build value. They awarded themselves warrants to compensate for the pay cuts in August, so could stay at present levels for the rest of the financial year. Then recalibrate the BOD pay structure in terms of funding available for this size of company and their ambitions for the company. This is a something that is totally in their control - and would greatly boost sentiment towards this share. All said more in hope than expectation - but why not?

Worth remembering that the old break even point for eog was always given as Brent at $55. Recent cost cutting has saved £15k a month on the FD salary, halved remaining BOD salaries perhaps another £15k saving and got rid of office rental which must also save a fair whack each month. With oil at $56.53 as I type, seems not unreasonable that eog could be in profit in the range of £50k a month - and that’s before anything comes out of Wressle.

Think we got a larger rise on Friday, so Egdon had some catching up to do. Agree that main rise is likely on confirmation of what actually flows for production from Ashover and Wingfield. So we have to keep a close watch on things for a week or two, but encouraged we are now mid 1-2p, as a rise to 2-3 range seems more within reach from here. 10p perhaps a bit ambitious at present, but then share news was quoting us at 9.5p which Tacuma picked up on below - so let’s hope they have seen the future!

I always knew we would come good - but holding out for 10p myself!

@Tovoc. Yes constrained, as we have the original reservoir engineering estimates of in excess of 500 from Ashover Grit and it seems from the FinnCap summary of Phase 1 operations that the Wingfield Flags reservoir is also being perforated and comingled with Ashover -Wingfield on its own originally free flowed at 182bopd. So looking good. Think this is why there is no mention of the Wingfield flags reservoir in the RNSs for future work as it’s being incorporated in the Ashover Grit production.

Think it’s just a BMD tweet so it’s out there for anyone.

Yes and we seem to have just ridden a 500k sell without a blink - unless this was a very delayed buy, sometimes hard to tell. I think ujo has a bit of ramping and deramping going on around Wressle, so it’s not totally being ignored! Egdon BB is pretty quiet though.

See that Ireland came close to power cuts this week because of low wind speeds and seems to have turned to coal run power stations to fill the gap. Should get a few to sit up and ask questions about Gov ignoring the gas decline at Corrib which is going to multiple the problem in future. Inishkea could potentially provide continuing gas to electricity supply to support the renewable transition. Surely a better option than power cuts or coal?

And just as a reminder of what is actually happening here and what it is worth to EOG - the following extract is from the FinnCap note copied here on 9th June 2020:

“The current development scope includes the re-entry of the Wressle-1 well, recompletion of the Ashover Grit interval and perforations of the Wingfield Flags. These two reservoirs will then be comingled, with the produced oil trucked to market. Reservoir engineering analyses points to an initial production flow rate of 500 bopd gross from the Ashover Grit interval, equating to a net share for Europa of 150 bopd.
At that rate, we estimate Wressle will boost Europa’s cash flow in FY2021 by ~£1.6m at US$40/bbl. We also estimate the project has an NPV10 net to Europa of US$3.3m (0.6p/sh) at our long-term Brent oil price of US$50/bbl.”

With oil already at close to $55 it now looks like it could be better than this.

Hi GP - can you refer me to the relevant document to support this view as it directly contradicts the Broker operational summary provided here in June this year, which explicitly says that Ashover Grit and Wingfield Flags will be co-mingled before production. See Beacons 3 contributions to this board on 9th June for a detailed summary of this.

Agreed we need other news to return us to the 4-6p range. But Wressle is still not too shabby a start with oil at current levels, especially if we can get near to the 500 bopd production rate from the Ashover grit and Wingfield flags reservoirs in phase 1 (and I haven’t seen any data to suggest we shouldn’t get to at least this). That will mean a healthy revenue profit if costs continue to be controlled as now, certainly enough to fund significant projects each year without the need for additional fund raising. How value adding that will all be is the next test for our BOD.

Yes strengthening oil prices should see us with a very profitable income stream with an extra 150 bopd from Wressle to add to our current 90. All on top of some significant reductions in overheads.

Looks like it’s been delayed to coincide with expected first production from Wressle. Am hoping that absence of additional funding moves in December means they think they can manage cash flow for now with OP at over $50. Just waiting for the appearance of some new derampers/rampers here to confirm that things might actually be happening in January!

Yes Tac, it is just a paper exercise normally when ordinary resolutions are routinely passed to accept the accounts and reappoint x and y. Other companies are just holding them online with only BODs present, because they are some legal requirements around doing this. That’s why I was curious about why eog haven’t done the same yet. Can see no apparent reason to delay what is normally so standard a part of the annual cycle.

Anyone know how long they can delay holding an agm under current circumstances? And what, if anything, we should read into this?

@levistubbs - Saw the zoom video differently. Yes it was clunky and seemed under-practised, but then I get tired of these slick “paid for” interviews that are little more than PR - so was willing to cut them a lot of slack for that. Not seen many companies try that format so also gave them credit for trying. Felt we saw a bit under the bonnet for good and bad. Looked like there could be some genuinely good stuff emerging if they can show that they can execute and finish as keenly as they pursue new ideas.

Hi Tac, I think I’ve seen that letter before (it’s from mid-November) but never been able to track down any particular statement it refers to. Not sure it is any more than a restatement of the coalition governments agreement about no future licences for gas exploration beyond those already issued. The letter writer is not that specific.

Dimly remember that they used to talk about the company being in profit once Brent hit $55 on current production and $35 once Wressle was on stream. And that was before current major cost cutting (no office, no FD salary and other bod salaries slashed) - so may be OPEC have ridden to our rescue?!