Cyan 2- why are we waiting and what?28 Jul 2020 14:12
There is updated version of the 2019 report
See Intrim report results 30.06.2020:
We are reviewing a number of options for the future use of HH-2z, including stimulation to return it into long-term oil production, sidetracking the well to a different subsurface location and possibly converting it into a future water re-injection well to further reduce future operating costs (as foreseen in the Horse Hill field development plan presented to the OGA earlier this year).
On a positive note we also firmed up our plans for the reperforation and recompletion of HH-1. The current completion and perforation scheme is less than optimal for both pump efficiency and oil inflow. Consequently, if successful we remain confident this programme can further improve the well's oil production rate. We currently plan this activity to occur this summer. We should not forget that outside of the Wytch Farm Field, HH-1 is currently the UK onshore's most productive well.
Whilst we started the transition in Horse Hill cost structure from a purely testing phase to expected production in February, it is fair to say that the Brent collapse accelerated this process. To date, via the £1.65 million purchase of rented surface production equipment and other savings, we have seen Horse Hill operating costs significantly reduced by $11 per barrel (bbl) from the testing phase. Current asset level operating costs, which include crude transportation and refining fees, are approximately $13/bbl at current production rates. We believe these are likely to be amongst the lowest in the entire UK sector, both onshore and offshore. Further cost savings are ongoing.
As part of the plan to position UKOG for a post Covid world, in June, the Company fully repaid the convertible loan with Riverfort Global Opportunities PCC Limited and YA II PN Ltd, making UKOG debt free. The additional driver for the repayment of the £1.75 million outstanding balance was to eliminate the uncertainty attached to loan note conversion timings and pricing, something the Company believed created a negative influence on the Company's share price. We are possibly seeing some of the benefit of this action in the week prior to this report.
In addition, we raised £4.2 million to provide funding for the above and other key activities, to include the forthcoming HH-1 reperforation and preparations for work at Loxley and follow-up of the Arreton planning application.