WL1516 - You answer your own question in your last post at 12.06.
If the BOD are feathering their own (or friends) nests with cheap shares by deliberatey depressing the sp, then that is a planned and orchestrated act. Their friends and families will not thank them for selling them a pup.
We will never know but Lucan is a professional financier and, like most other CEOs, if an oppourtunity came up to capitalise on a bit of uncertainty, I am sure he and his mates would take it - HOWEVER, they will only want shares (even cheap shares) if there is a reasonable and realistic prospect of those increasing in value.
Morning all - my take on the situation is that we are exactly where we should be based on the well established program of works. The bridge plug has been set and the company has clearly stated that, based on their observations, they believe that they have, as planned, successfully isolated the water zone. That is a big tick.
Lets be clear - oil flowed from the well successfully during the earlier testing. The problem was that the perforated zone was too long and intersected a high-pressure water bearing zone which meant that a lot of water was being produced with the oil.
They could have continued to produce this way however the water content reduces the production efficiency of the well and leads to increased oil process costs as the water and oil need to then be separated before refining. As such, the company have sought to fix the water problem 'at source' so to speak.
The setting of the bridge plug will not compromise the ability of the well to produce oil which has already been established in principal. As such, it has already been established that the Brockham well is not a duster. The question is whether we can produce pure oil from the well as opposed to oil/water mix. Based on the RNS today, the company are of the view that this is not more likely than it was last week.
People think that these companies can just turn taps and valves on at will and just 'give something a go and see what happens'. This is simply not the case. Our engineering program was been clearly set out and agreed in separate stages which are compartmentalised. The local authority and the EA will want to be clear on when we are trying to fix the well and when exactly we are actively trying to extract oil. As such, the RNS today has rightly made it clear that we have not produced hydrocarbons from the well as part of the bridge plug and initial pump function tests. If we had done, we would likely be getting our knuckles rapped as we are not in an agreed period of active oil testing.
I applaud the new BOD for the work that they have done, for keeping to the schedule and for updating us. Thank you!
Next week will see the delivery and set up of the proper well test kit on site with the EWT commencing either at the end of next week or soon after....... It is no coincidence that the OO take up date is set at the end of the month at 4.25p.
Mald - I do take your point and agree that SCC are somewhat of a thorn in the UKOGs side with regards the additional wells and the delay and provatication is frustrating. However, UKOG will have ample opportunity to succeed based on their currently permitted 2 x horizontal Wells. Those will generate sufficient income to move the other licences on at worst case and we have more than enough to get on with for the rest of 2019 so they can provaricate away to their hearts content.
I the end, I think SCC will see their 6% come in from HH1 and the 2 x horizontals and will see pound signs that they can't ignore. I think with many councils currently in a period of purder and also mindful of the uncertain political landscape, no one is particularly wanting to move this on at present. However, UKOG can exert appeal pressure if and when required but I doubt it will come to that. Ukog will get their wells but the policicians need to sell it to the local electorate in stages.
Many thanks Carlos_81 and Myro117.
This has been something of a slow burn over the last few months but I believe we are well and truly at the end of the Stage 2 'Development and Analysis' phase now. As such, UKOG is exactly where is would expect it to be, i.e. on its downers with people weary of the seemingly endless testing and lack of news excitement. I am surprised at how low it has gone but am not complaining!
I personally am extremely pleased with SS as he has undertaken a long-term and thoroughly rigorous testing programme at HH-1 worthy of top tier industrial production. The significance of this achievement seems to have been lost on many but the success and de-risking of Stage 3 Production that we are about to commence this Spring hinges on the 'dull' work that SS and his team have been doing day in day out for countless months.
I have watched over 200 tankers full of dry crude leave site quietly but consistently with balanced production between both the Kimmeridge and the Portland. Over 40,000 barrels of oil from something that many said was impossible. I would be happy with just one horizontal production well into the reservoir but to get two, back to back within the next 6 months with a likely achievable 6-8x increase in current production (on top of what HH-1 is continuing to produce) is a god-send.
On first reading, I really didn't care that SCC have postponed the planning meeting - it is irrelevant to the drilling plans for 2019 and the delivery of the two planned horizontal wells. They can delay it a few more months and it won't matter a jot. However, on reflection, I do actually think that it has placed an additional unexpected weight on the already depressed SP and to be honest I am grateful of that as it has enhanced the buy in opportunity. So thanks SCC!!
As far as dividends go, it would be nice but I doubt we will see that for a year or two. However, if the 2 planned horizontal wells are a success and upscale production by 6-8x (as I firmly believe they will), them I can realistically see us leaving the AIM market behind in 2020.....
Fortunately this is not football and people who understand exploration realise that you cannot prove a resource of this nature up overnight. The full exploration process can be divided up into 4 or 5 stages that can take several years to work through regardless of whether it is oil, gold or minerals.
Stage 1 is often referred to as the 'discovery / speculation stage and easily covers 1-2 years. (Ukog were there in 2015-2016).
Stage 2 is the key period of Development / Investment and Anaysis stage and should be expected to take 2-3 years (UKOG has been carrying this out from late 2016 / early 2017 and in my view is coming to the end of that process this year. At this point, the SP is usually depressed as the initial discovery hype is long gone and reality has set in of the amount of work involved. Everyone gets tired and a bit fed up with the wait.
This period then turns into Stage 3 which is the Production and Re-evaluation phase and can form a perfect time to invest as the technicals have been massively de-risked due to the preceding years of work. The stage 3 work is about scaling up operations and this, if successful, sets the operating company on to become a Tier 2 organisation.
People need to bear in mind that UKOG are targeting 20 years of full-time continual production from the Weald and are at the cusp of unlocking the prospect by their planned horizontal wells which are backed by years of testing and evaluating of the reservoir at the Horse Hill site. This is an absolute prime opportunity to invest in a lower-risk producer with strong growth potential without having to pay any sort of premium.
That did earlier this morning was just too tempting so, after being away for a while on other shares, I am well and truely back in here with 2m shares at an average of 1.087p. I will hold here until the completion of both horizontal wells.
This looks like an exact repeat of June 2018 when sentiment and newsflow was low but firm plans were in place for later in the year (just too far in the future to generate enough excitement) and everyone got frustrated. I remember it clearly - the SP langushed exactly at this level for a few days / weeks and then bang - Lenigas buys a whopping stake in 2 tranches and the SP more than bags over the coming 2-3 months on anticipation of the first EWT results from HH-1 in July 2018.
This has all the same hallmarks but this time, we know HH-1 flows and will continue to flow, we have increased stake in the licence and we have two horizontal wells to drill and report over the remainder of 2019. Mark my words peeps - this will hit 2p between late July and middle of August. I wouldn't be at all surprised to re-test 2.5p by September 2019.
After having been away and tied up in other shares over the last couple of months, I have once again taken a sizable position here today in early anticipation of a decent result and successful flow at Brockham. I have been keeping a keen eye on developments and believe now is a good time to commit...... will I be proved right. In for 500,000 shares at an average of 3.96p.
I view this as a 'perfect storm' situation..... reputation taken a kicking, technical problems, lack of sentiment and concern over unproven new BOD..... however I see structured quality work quietly happening on site with mobilisations / demobs consistent with an imminent flow test. We should not forget that Brockham previously flowed naturally to surface and therefore they will want that Christmas tree on promptly as you wouldn't want to rely purely on kill fluids as your only protection against uncontrolled flow.
SS has to make sure his £600k salary is in the bank for a few more years...... you wouldn't want to work for nothing now would you......
Has he STILL not bought any UKOG shares?.... even at this price?
Cash cow comes to mind!
Creating a fall in revenue by cost cutting can be a problem but fundamanetally if an asset is consistently not profitable then it has become a net liability must rightly go. If the money that is saved exceeds the loss in revenue from undertaking that change then it is all a step in the right direction.
I live in Market Harborough and I know the TC branch there well. In all my years living there, and in the hours and hours I have spent in the coffee shop opposite ob busy Saturday and Sundays, I have honestly never seen anyone go in or come out of there! I personally am glad to see its been earmarked for closure. Our high street assets need to pay for themselves and earn their keep otherwise that money is best spent on online and advertising presence and developing the profitable asset base (airline slots and hotel chain).
Personally I think most people would go online first and formost so I would ditch practically the whole high street presence. A functional / staffed shop is a bloody expensive advertising board. Get it on TV, radio, billboards with some proper high quality catchy advertising and offer a decent level of service and holiday experience both within the UK and abroad and you are future-proof.
Those are good points.... a careful and measured hand is needed here. Cost savings whilst preserving efficiency as well as diversification. Part of the decline here is, I feel, due to the narrow business model. The airline has become more profitable than the tour side of things which is ridiculous in the context. The acquisition in the Russian market looks very interesting and a solid asset to have.
TCG need to move to a more online presence and redefine their USP but I feel there is energy in the company of late to do this.
I certainly hope so and expect to get some updated analyst / broker reviews through soon. The new CEO is clearly setting up a communication offensive with the market and rapidly clearing out dead wood and streamlining right from the high street shops all the way to the senior management. The cost savings on the bottom line will be enormous - circa 300 staff salaries at say an average of £25k each per year plus rents on 21 loss making premises at say circa £30k each per year. Thats approximately £8m wiped off the companies costs per year and he's only been in the job a fortnight!
I find it a great indicator of the transparency and confidence of the new CEO to be willing to actively put aspects of the business out there at such a forum for all to see and - more importantly - for those in the know to probe and question that confidence. Our new CEO has made a cracking start and has really hit the ground running in the 15 or so days he has been in the job. Its going to be a busy summer.....
The RNS was a great step from the new CEO to start to set things straight to the market.
We had active and detailed cost reduction initiatives announced by the company on Friday along with an announcement of the Russian acquisition to diversify that arm of the business which are both solid operational steps. That I particularly like about the RNS today was that is was specifically targeted at addressing the sentiment deficiency and skepticism of the market of late.
Most companies would just stick to quarterly financial reporting - and we are due the next update on this in May - but active engagement by the company with analysts is a great proactive step to take control of the reporting situation in the short-term.
The old fashioned former business model of people going into shops and flicking through brochures for the Bahamas has been acknowledged by the BOD. IMO the appointment of Will Waggott is fundamental to the company modernising its tour operating business. Waggot has a vast amount of experience across the leisure and tourism industry and has proven his worth over at TUI where he held roles of both Commercial Director and Chief Financial Officer...... nothing like knowing your rivals from the inside eh!
The speed at which he has brought in the latest round of efficiency savings since taking office is amazing. He commenced his role on the 11th March and the store closures / high street staff reductions were announced on the 22nd March, a mere 11 days later. That indicates to me that he is decisive and knows exactly how to turn this ship around.
We have also had significant Director buys over the past months at a higher level than this and two significant institutional holders increasing their holding in late Feb and early March at higher than this SP. The most recent broker note of 12p is, in my view, an attempt to deliberately sow doubt. They are probably shorting this but the prevailing signals are that this will improve significantly over the summer.
Do8erman - The company issues an RNS on the 22nd March announcing plans to implement a major phase of its UK restructuring and efficiency initiative. As such, it plans to close 21 stores across the country which would reduce the UK retail estate to 566 shops. I imagine there will be a further reduction in stores in the coming months if the strong growth in online sales continues (up 30% over the last year).
The current planned closures will result in 102 customer-facing roles being made redundant and in addition, a further 218 store-based roles are proposed to be removed across the network following a review of the retail workforce.
This will significantly decrease the cost base of the business and will release funds for either debt repayment and or expansion of profitable growth areas of the business.
What are peoples genuine expectations here? I nabbed 43k of shares here today at 26.4p and aiming to increase this to 50k in the short term if it stays around this level. I personally feel that this is being oversold and pressured down by some MMs as an accumulation opportunity. CEO and senior BOD figures heavily invested recently since secong profit warning at around and above this level. Investico hedge fund owning 15% is holding firm and partial airline sale could complely reform the debt issue in the near term whilst retaining control. I think last year's UK heatwave was unprecedented and weighed heavily on the bottom line at a bad operational time. I see this year as back to normal with the cost saving benefits starting to kick in. What are peoples predictions over the next 1, 3 and 6 months?
They have made a good start with the EA and Council permissions. The EA permission was a big hurdle to climb. Just don't underestimate the time it will take to get the H&S and O&G approvals through. Does anyone know if there are any conditions attached to the EA permission like local groundwater monitoring for potential cross-contamination of the overlying aquifer? There usually are conditions attached.
I worry when, on the face of it, things look SO rosy but the market isn't having any of it.