Member Info for WG818

"I read in the accounts of Wingas that the last well drilled – SF07 encountered a lot of difficulties and had to be shut in. What makes you confident that you can make more of a success of your proposed sidetrack through SF05 scheduled for 2021? (This question formed part of larger question already published but the full historical data has taken a few days to assemble) Asked on 5 August 2020

The Saltfleetby 7 sidetrack was drilled from the B site towards the West, as can be seen in Figure 5 in the CPR (Structural Map of the Top of Westphalian Reservoir (Unit 2b)). The well was first perforated in the Brinsley Abdy formation, but failed to flow oil. Thereafter there was significant differential sticking in the Westphalian unit and the well was sidetracked to penetrate the Namurian C which was thinner than prognosed due to faulting, and so another sidetrack (SF07Y) was drilled into a thicker Namurian C sand. After completion and perforation in 2003 the well flowed 2.4 mmscf/d of gas on test. However, once the well was linked up to production equipment it became clear the reservoir had suffered some form of permeability impairment and the well gas rate was restricted."

Don’t be blaming me for your not so subtle de-ramping Howey.
I have been quite waiting like everyone else. Perhaps the reason this hasn’t done as well as everyone expected could be found in a Q&A answer from August 2020 thought?

Just out of interest what are these “great successes” you mention??

Cheap as chips a push? Not if gas was at 40/50p a therm that they worked the original figures out on.
Even the annual accounts from last month say they are in trouble if gas drops below 80p a therm!

And the 10% drop of is simply the figure the company itself has given. It was 33 bar in the last quarterly report, down to 30 bar in today’s RNS.

Donk
Yes of course it’ was all about the sidetrack.
If they had managed to complete it in “earth time “ not “Martian on a go slow”as it has turned out(see investor questions) everyone wouldn’t be scratching their heads wondering why this hasn’t rallied past 2p.
Unfortunately they have those millions of warrants extra shares and the credit card rate loans incurred during the nearly 6 month drill.

I’m still surprised this isn’t higher, but I guess a justified lack of trust in accuracy in reporting figures by the company is at play. I’m guessing the 10% drop In pressure in just 3 months will have some concerned as well.

Well done for finally getting there 2 years late and nearly £30 million over budget though.

https://www.nstauthority.co.uk/data-centre/nsta-open-data/production/

Some interesting reading again.

The Brockham production looks to have been terminal for the guy with health problems (see the Q&A) as zero production again.

The Saltfleetby figures are interesting.
Gas production down 9.4%
Condensate down 27%
water cut up 40.32%

The water is all produced from well A4 according to the 3rd January RNS.

JPB

I have no problem with push’s expert opinion regarding drilling. In fact I have praised him on it.
I only point out that his opinion has been wrong on several occasions and he is far from infallible. When challenged “Donald Trump” looks thick skinned in comparison.

1 my judgment thus far has proven accurate.
2. Why on earth would I need legal representation?

Push2
As your post when you stated that Uk natural gas was”highly unlikely to ever go under £1 again” was to me I thought justified in pointing your incorrect call out! Especially as your justification for the site taking years over timeframe was a good thing as it was being built on solid foundations or some carp like that!
You seem to have a large number of “brown noses”following you, judging by your recommendation posts and probably should take mug punters into account when posting…….although I think we both know that’s a large part of the reason you do!!

Uk natural gas trading below £1.00 a therm this morning 96.750 as I type……another prediction you got wrong then push!

Are you going to tell him or should I push?
Wouldn’t want to be called a deramper for pointing facts out after all!

I think you will find that the Water at present has to be incinerated. (Stated by GL on many occasions) circa £48 a barrel on one estimate by the company itself.
Brockham has received EA permission to inject from elsewhere, however they don’t have the required planning permission from the CC. Why they haven’t applied for it is anyone’s guess!

I should check the planning permission they applied for and what’s required before your idea!

Just passing my knowledge on Rob, much as push does regarding drilling.

Was anything I said wrong then?

I think you will find they have upgrade the site to bring Balcombe up to spec push!! circa £2 million

They could go to Brockham . They don’t appear to have applied for planning permission to inject Water from elsewhere, or sorted the new lease out yet. One of the partners also has its 10% share up for sale and appears to be in arrears on paying its share on upkeep…….it’s not actually producing anything either. £2 million minimum to drill a sidetrack.

Ok so as you have chosen not to respond Gallder regarding the shortfall on hedge 2 (the one that they would have got £4.3800 a therm) I had another look at the last week’s published Annual Financial Report.

The bottom of note 25 reads

“ n the event that the Group does not meet its production timetable, the swaps will crystallise as a liability at the dates at the proposed periods of gas production in the swap agreements.”

Being as they are at present 2/3 short with little hope of making up the shortfall it looks like the second swap as you call it will again become a liability for the company.

StarBright.

Because they haven’t.

Fro gallders fingers the produced

Jan 1,908,520 therms
Feb 1,680,025 therms

To fulfill the two contacted amounts (or multiplier) they would need.

Jan, 2,079,077 therms
Feb 1,877,875 therms

Gallders figures not mine! Why did you decide to change them out of interest?

Gallder. That’s a bit rich from someone who didn’t /dosent even realise that The £3.3 million to fulfil the hedge expenditure. was paid via a massive dilution placing a couple of months ago!!

If you don’t like Singhies figures take a look at your own for Jan and Feb this year. They haven’t produced enough to fulfil the 2 combined contracts in either month. March is going to fall short also following present production figures!

A simple question, what happens about the gas ( or spuds) they fail to supply?

Gallder

“We don't know that Mercuria wanted £3.2m paying early.”

“Err……we do as it’s listed in the 19th December RNS as part of the reason they needed that £7 million.See Additional information and it’s actually £3.3 million.

“There is no such thing as a missed hedge in a swaps contract.”

The same information says they closed the hedge!

GL is on record as saying he wouldn’t “bet” using hedges , (so it’s Mercuria who is betting) it was the interview with the dog walker in the background from memory.

And it doesn’t matter if George is a billionaire spud farmer,if he has a contract to supply gas or spuds and he falls short as he very much looks like he is going to do, he will need to pay the difference!

Your figures split the two hedges at equal proportions of the missing amounts. I don’t think you have listed what the corresponding loss on the missed production would be either?

If Mercuria wrote the contract that the original hedge must be fulfilled first ( as you would assume they would) then Angus are going to be on the line for another £2/3 million quid if they need to pay Mercuria the £4.380 per therm that Mercuria needs to pay them for the 520thousand therms Mr Singhie points out they are likely to be short on!

I can see why all the talk has changed to that extra compressor boating production.

Gallder

Thanks for your reply. Yes a couple of school boy amateur mistakes on my part Apologies for that.
Every day is a learning day as they say.

So as I said you seem to know your onions when it comes to hedging and swaps. So a couple of questions if I may?

We know that Mercuria decided that they wanted £3.2 million paid early on the July and August missed hedge, and there is the catch up derivative payment of £4.175 million due in June 2023. The two figures combined come to a similar figure to yours regarding what Angus owed for the missing months.

Reading the Q&A, they say the majority have been moved into H2 2023 at a higher price.

So my question is do you think they agreed to a cash figure as above and renegotiated the Q1 and Q2 prices at the eye extraordinarily price. (Good work GL if so)

Secondly if as you say the figures are worked out on a daily basis, will Angus be liable for the shortfall 500 thousand therms that looks likely to happen in March if production remains at present levels. Would Angus be liable for the missed part @ £4.380 a therm?

Thirdly as it would make a bid difference, would the original contracted hedge October through March need to be fulfilled before the secondary hedge @£4.380 is filled?

4th Question. Are these £3 and £4 hedge figures in your view actually accurate? They seem incredibly high if so?

Again apologies for my naivety.

Ps I think you may have posted your figures from last night on the wrong BB.

Mmm. No need to get so stressed gallder.

The 2021 annual accounts and the CPR give a figure of 5.25 therms @ 52.05 per therm for the Three monthsJan,Feb, March. The latest figure gives a figure of 843.750 therms @ 4.3800 per therm for the same period . So they have lost 4,406,250 therms in the same period.

I suspect that they have forgotten to include the original figure in the new accounts.

The reason being, if you look at the April May and June figures in the latest accounts they are still showing as last year. 5, 250,000 therms @ 0.3755 a therm. But they have also added a the extra 843,750 therms at 3.1500 a therm for the same period.

This would explain the Q&A answer regarding them being rolled forward at a higher price.

If I am correct that they simply forgot a line then they won’t actually meet the Jan, Feb and March target anyway.

If the information is correct Mercuria have self inflicted a double whammy having to pay Angus the 843,750 therms at 4.380 (ouch) but also missing the 4,406,250 they would have been making a couple of millions off!