Member Info for StarBright

Commerciality (flow rates, volumes etc) of the Kimmeridge layers at or above the levels indicated by the brief test conducted back in 2016 will be helpful.

One of the harsh realities of investing is that share prices tend to fall far faster than they climb. In general it is wise to be sceptical of anyone telling you that the next hurdle is the last one, and that the sp will rocket thereafter etc. Only rarely is the case. It takes time for companies to build and deliver value.

Portland commerciality is fully discounted in the present sp, along with something for the Kimmeridge layers. Those waiting for the formal Portland commerciality announcement as a price catalyst will likely be disappointed. The pattern of non-reaction to confirmatory news that causes such wailing and gnashing of teeth on this board is the signature tell of a share where the “facts on the ground” have had a lot of running to do to catch up with a share price that has long sailed high on anticipation. That isn't in itself a negative - and it doesn't mean that there'll be a chance to buy in at a lower level - but holders should be clear that there is a lot priced in already.

UKOG remains an unusual setup. There are clearly credible opportunities for significant value creation. If Weald oil is recoverable in commercial quantities, shareholders will be rewarded for the risk they have taken in providing equity capital. We are significantly closer to proof of concept today than at any other point in the last few years. The results we’ve seen to date have been good. But the risks are still very real, and are not limited to the outcomes of current testing activity. Ticket holders have the chance of a rewarding ride, but should keep sight of the possibility that the train may yet be derailed.

It’s not necessary to be particularly clever to understand why the last two RNS’s have not led to UKOG’s sp being re-rated upwards. You only have to look carefully at what the company has said. It is necessary though to go back one further RNS, to the 3rd August.

Quoted below are key phrases from each RNS:

RNS 3rd August: “Stable implied daily pumped rates of 401 and 414 bopd of dry 36 API oil were recorded...”

RNS 10th September: “...further HH-1 Portland vertical well optimisation could achieve a forecast sustainable initial 24/7 pumped rate of around 362 barrels of oil per day...”

RNS 5th October: “...the single HH-1 well has "seen" approximately 7-11 million connected barrels of the total full field OIP (or Stock Tank Oil Initially in Place "STOIIP") reported in the Company's July 2018 AIM re-admission document.”

Note that the flow rate for the Portland declared on 3rd Aug was not improved upon by either of the later two releases. Note also that the volume of oil in place is referenced as having been included in the company’s July 2018 admission document.

So, both the headline flow rate associated with the Portland layer at HH, and the associated volume of oil were known and “in the price” by August 3rd. The RNS’s of 10th Sep and 5th Oct provided no positive updates on these key variables, so provoked no re-rating of the sp.

Outside of Portland EWT results, we haven’t had much other news bar the acquisition of the additional HHDL stakes via the placing, and some interesting insight into the company’s thinking on commercialisation. There hasn’t been enough new news outside of Portland results to cause a re-rating either.

TLDR; the last two RNS’s haven’t provided the material new news required for the share price to be re-rated upwards.

No.

Solo's holding: 4.20% before, 3.98% after.

TR1 required because their selling took them through the 4% threshold.

Scandic's post was stupid. That doesn't make yours any better argus1.

I don't think anyone would mind you starting a thread every day in which to post observations from your study of L2 data. But starting so many threads (at least 10 today already) pushes discussion off the board and discourages engagement. It is an egocentric imposition in what is after all a public space, and shows you only as boorish and impolite.

Anyone looking to use this discussion board to discuss UKOG will find it annoying, regardless of their SP preferences.

In truth it is quite sad.

Do you remember Comical Ali..?

At 1.88p..!

At 1.899p

What you are looking at is the line of a geological profile available from the UK Onshore Geophysical Library (UKOGL):

https://ukogl.org.uk/wp-content/uploads/2014/02/rg1.pdf

Nothing to do with UKOG, and definitely not a pipeline.

I really wonder about some of the stuff posted on here at times...

Thanks Jiffy. It'll be interesting to see if/when we get further news on these.

I took a look back at the 27 December ‘17 RNS, and was reminded of this statement:

“Planning Consultants have been engaged and are actively pursuing the acquisition of two further drilling sites in the central sector of the licence (PEDL234). An application for planning consent on the first of these planned locations has commenced and is expected to be submitted to the local council in mid-spring 2018, with drilling planned for spring 2019.”

Do we know where these two sites are, and were the planning applications submitted..?

Apparently Esso drilled straight through a 1500ft column of oil without noticing.

Brocal53 - the RNS didn’t contain much in the way of new news, so it’s no surprise that it didn’t result in the SP moving. Quite a few posters offered that opinion at the time of the release.

Although everyone loves a conspiracy theory - especially when outcomes have not been positive - the reality is that there is little if anything we see here that cannot be explained rationally without recourse to intimations of dishonesty and malpractice.

Boyzee - yes, Portland commerciality is fully discounted in the present sp, along with something for the Kimmeridge layers. Those waiting for the formal Portland commerciality announcement as a price catalyst will likely be disappointed. The pattern of non-reaction to confirmatory news that causes such wailing and gnashing of teeth on this board is the signature tell of a share where the “facts on the ground” have had a lot of running to do to catch up with a share price that has long sailed high on anticipation. That isn't in itself a negative - and it doesn't mean that there'll be a chance to buy in at a lower level - but holders should be clear that there is a lot priced in already.

It’s an unusual setup. There are clearly credible opportunities for significant value creation. If Weald oil is recoverable in commercial quantities, shareholders will be rewarded for the risk they have taken in providing equity capital. We are significantly closer to proof of concept today than at any other point in the last few years. The results we’ve seen to date have been good. But the risks are still very real, and are not limited to the outcomes of current testing activity. Ticket holders have the chance of a rewarding ride, but should keep sight of the possibility that the train may yet be derailed.

Will the next TR1 we see be:

(a) from SOLO, saying that they have crossed below the 3% threshold, in a downwards direction..?

or

(b) from an as yet unknown institutional investor crossing the 3% threshold in an upwards direction..?

Just for fun...

I would hope that a declaration of commerciality for the Kimm would be followed by revisions to the Scoping Document. The valuation of the HH project (one component of UKOG) could then be updated too...

The thread title is: "Scoping Document valuation"

And the TLDR at the bottom of my earlier post: "HH production as envisaged by the scoping document supports a share price between 4p and 5p."

Yes willowpillow. At the moment it is just an assessment of the value of the proposals in the scoping document, assuming that these are executed successfully. If that document is updated when numbers on the Kimm layers etc are released then the valuation model can/will be updated also.

No - that hasn't been forgotten at all Free-Money.

The thread discusses (see it's title) a valuation of what is outlined in the Scoping Document. That document provided interesting insight into the company's thinking and plans, and it is useful to assess that empirically.

Of course other developments are possible, and these could have an impact on the share price. But at this point, they are possibilities not plans.

No-one has proposed that SP matches worth in real-time.

Valuation models are the tool that enable us to assess the value of companies and their news. They help us develop a feel for what is and isn't realistic. They aren't an exact science, but they help us understand - for example - that 3,500bopd of Weald production isn't going to support a share price of 75p...

It is not enough - as we see proved here quite frequently - to believe simply that shares will rise on good news and fall on bad. Sentiment is important in the short term, but at the end of the day free cashflow is everything. If you have no methodology or discipline in translating news into cashflow/valuation impact, then you are just a mug punter.