Member Info for Thorpedo

No major is coming in for UKOG in the short to medium term why would they? They would only get 46% of HH. Also to many small shareholders.

They will go for HHDL where they will get 65% of HH and only have to speak to a handful of shareholders. UKOG been the majority one.

No major is coming in for UKOG in the short to medium term why would they? They would only get 46% of HH. Also to many small shareholders.

They will go for HHDL where they will get 65% of HH and only have to speak to a handful of shareholders. UKOG been the majority one.

Thechancers
Looks like SOLO were desparate for cash and sold HHDL cheap to us to get their hands on the cash.

Totally agree. SS bought Solo's shares as they were cheap as they were desperate for cash. DL will not sell DOR's shares except for the maximum. They are not worth their maximum yet. Not until production with multi-wells.

@Stuarto33
I dont see getting a production licence a problem. The OGA just gave Angus their production licence with no fuss. Can you imagine them saying you have an oil and gas licence which you must drill and test otherwise we will take it off you and then once you have spent your money and proved it is commercial not giving you the production licence. It is a given.

As for funds. HH-1 is already funded (and has planning permission). It wont take many weeks of HH and HH-1 producing to generate cash for further wells.

@Starbright

I agree that the funds are HHDL's and will not be distributed to UKOG but will have to agree to disagree regarding them being used for this testing process. This EWT was prefunded.

HHDL didnt know how many barrels were going to come out or what the oil price was going to be, that is why it was pre-funded.

You can call it offsetting the test costs if you wish but the fact is it currently has over £200K in its coffers that it hadnt planned. It would have hoped for them but by no means did it have potential unknown money in its budget.

Hopefully. final part of the test is to open up all three layers at the same time and let the them flow. A final 10 day full production test should bring in the cash.

No this test has already been pre-funded. The sidetrack is also pre-funded.

This is new money which will be used to offset future costs.

They will probably go in to production with 2 wells and fund others with profits from these.

Testing has already been paid for. It is cash in the coffers.

JiffyBag

UKOG own 71.9% of HHDL not 46.7% - the 46.7% ownership is of the Gatwick Gusher

SS can sell HHDL without going to the shareholders (not an analogy I want use but look at Solo). If a major came in for UKOG it would be upto the shareholders and at UKOG there are a lot of them and these are mainly PIs. Sp mp going to a few IIs and tapping them up first.

The Gatwick Gusher is what a major would want at this time and it is nicely packaged up in HHDL.

When a major comes knocking I think it will be for HHDL. They will get the asset they want, the Gatwick Gusher, and leave UKOG to develop the rest of the Weald. By buying HHDL they only have to agree with SS to get the majority.

What price for HHDL £750m+

I didnt say that we didnt have enough cash. I said SOLO needed cash and that is why we got them so cheap. It was done some cash and mainly shares as this allowed SOLO to convert a non liquid asset in to a liquid one. They had to massively under recover the true value of the asset to be able to do so.

SOLO also wanted to keep some involvement in HH and shares in UKOG has given them that.

I would dilute £4.5m to get an asset of minimum £6.3m (based on lowest forecast of Portland) everyday of the week if I could.

I said Portland was worth minimum of £65m it could easily be worth £203m (11mb * 40% recovery * $60 profit / 1.30$/£)

Plus Kimmeridge, I am happy for the SP take a short term hit for the value that the deal has brought UKOG, I am patient enough to wait for it to correctly show the value of HH and then the rest of the Weald.

SS knew that SOLO needed cash.
SOLO couldnt get cash out of HHDL as it is a private limited company.
SS bought SOLOs HH cheap.
SS didnt have much cash so offered SOLO UKOG shares (which are as good as cash)
SOLO sold some shares to realise the much needed cash they needed.
SS was proved right in knowing that SOLO needed cash and that is why he was able to get HH from them so cheap.

Or put another way SS bought 9.75% of an asset which is worth a very minimum of £65m on Portland alone for £4.5m

£65m on a worse case of 7mb * 20% recoverable @ $60 profit per barrel / 1.30S/£. This is likely to be much higher.

SOLO were always going to sell some shares, they announced it in their RNS on 30 August:

"The Board has seized the opportunity to monetise its investment in HHDL and is pleased with the return we have made on our investment. The transaction enables a more liquid balance sheet and frees Solo from future direct operational expenditure at Horse Hill, but ensures we retain the exposure to the exciting upside potential of the projects within UKOG's diverse portfolio. Importantly, we will retain the option to monetise our shares in UKOG at the appropriate time."

I think that they will keep some share and use it as a bank account as and when they need it. Keeping as many in as they can to gain from the upside.

@Oktane
Please post once you have read up on it. As my post is only my interpretation.

I think I will e-mail the NOMAD for clarification.

@Oktane

They will be drilling additional wells to take the OIP out not putting more in:)

The full field of 7-11 seen by a single well, because there is so much then it is commercial to hit it with multiple wells rather than just one.

@Oktane
A well does not increase the OIP, it is 7-11m regardless of the number of wells.

With 3 wells instead of 1 then we can get it out quicker, it might also increase the total recoverability slightly. But unfortunately more wells does not increase the OIP.

To me this is a very positive RNS and derisks to some extent but not entirely.

Should be between £30m and 93m profit for UKOG

Case 1: £29.7m (7m * 20% recovery * $60 profitability * 0.77 forex * 46% Ukog)
or
Case 2: £93.4m (£11m * 20% recovery * $60 profitability * 0.77 forex * 46% Ukog)

The 6 new wells only up to 3 will be for Portland, the others therefore Kimmeridge, the 3,500bopd are for the 6 wells in total Portland & Kimmeridge.

Fool On The Hill warning us "Don't be Fooled"

Is he telling us not to listen to him?

@Seadoc - I think you are right, if he did think this was going titts up then he would convert and sell to make a 400K profit.

He obviously knows it going northwards so it would be foolish to convert and sell.