Member Info for wizard125

Heir

Sorry to have to disagree but Uncle SS Clearly states 750 - 1000 BOPD per well giving $20 Million revenue per well & states '3 Portland & up to 6 Kimmerage wells at HH' in his latest interview of I think 20 November 2018 between 3 & 4 minutes in to the interview before he comes back to the value part later.

I would prefer 9 wells producing $20 million revenue circa. $180 million revenue than 6 wells producing $20 million revenue circa. $120 million revenues from HH.

Seathestars

I think scandic is more like Frank Spenser in Some mothers do have em.

Adrian

In his latest interview last week SS said 3 Portland wells & 6 or up to 6 Kimmeridge wells at HH.

I presume the indecision is as the flow tests of Kl4 are not yet complete or they don't know the flow rates achievable on the commingled tests.

I hope this will not hold back the plans going in to SCC for consideration so they can push forward towards maximizing production sooner farther than later.

Star bright

It sounds like a plan.

My figures below should have been $20 million with $50 per barrel after costs.

I find it easier to equate barrels of oil at a cost & barrels flowed per day than this new system but I presume the system should give the same results.

I don't know why SS has used the figure of 30% oil recoverable for the Portland as the figure stated was 45% when the well was declared commercial?

Unless he is trying to be very conservative.

Any thoughts?

Penguins

If the figures don't fit why not email Horse hill/Ukog or the Nomad as the details provided are not accurate?

Penguins

3 mins 30 onwards '20 million per year revenue per well that's a chunky bit of change'

Penguins

I suggest you do listen again as he does say £15-20million per year. This equates to 400,000 barrels per year giving £20 million with $50 per barrel after costs.

This 400,000 barrels per year is just over 1000 BOPD per well

Well done Star bright that is very plausible.

One thing that will be interesting to see is how that figure changes with KL4 flow figures as I assume that they are not included in that equation.

As far as value is concerned the fact that we can explore,plan, drill & flow & transport 9 wells off one pad in very few planning applications will reduce costs considerably & if a mirror image of the plans can be used across the Weald the cost sinagies will add lots of value to the concept as the majority of the costs have been paid upfront by share dilution but there is no company debt to repay so costs will be reduced further on the roll out as they were were front loaded.

I am not sure if UKOG will be able to offset any of the previous years loses or any of the amortization costs against the 40% tax bill.

Star bright

Although KL4 has not been test flowed at this time I am not sure if you have listened to the SS interview of the 20.11.2018.

If you don't listen to all of it please listen to at least from about 2 minutes 50 seconds through to 4 minutes where you will hear SS say a sidetrack to give a optimized Portland & Kimmeridge well will produce 750 -1000 BOPD which may be conservative from a single well & we plan to drill 3 in the Portland & 6 in the Kimmeridge with revinue of £15 - £20 million each a year.

I have credited you with enough intelligence to do the maths.

I grant you that not all wells will be drilled together & flowed simultaneously but the Portland 2&3wells KL2,3,4,5,6 wells will be drilled & produced concurrently from revenues from previous wells drilled if I have understood correctly.

As with used 'revenues from a single well at $1 million per month a $3 million well will be self funding in 3 months' could be profits initially. 2 wells production paying for the second well in 1 1/2 months. Revenue from 3 wells paying for the next well in 1month and so on.

That presumes that they do not accelerate the drilling program from the £12.5 million funds raised through the summer.

SS does not talk about depletion in this interview but I believe that may have been taken into account in the equation as an average rate for KL 3 or sustainable rate for the Portland.

The logistics of removing the oil from HH mentioned in that scoping document which was produced long before to EWT began could be a little of of date & I think we will have to wait for the planning permission application to go too SCC to see the detail but I think they may be looking to move oil out by a rail link. This is pure speculation on my part & I accept that I could be 100% wrong & wish that I had a bit more information about rail links that could be extended to HH as I believe that the pipeline solution is not cost effective at the present time.

We will also have to wait to see a stable or average rate from KL 4 that could give a big boost for the figures.

If KL3&4 are linked & produced as commingled deviated wells producing from KL 3 & 4 simultaneously what rates will be achieved?

At the present time these are incomplete tests but all seems to be going well with SS being very conservative with his figures IMO.

Starbright

So how do you see this playing out with 9 wells averaging 1000 BOPD over 20 years with depletion or are you serious?

Starbright

365,000 barrel oil per year * $70 = $25,550,000

365,000 barrel oil per year * $50 after taking out $20 costs = $18,250,000

365,000 barrel oil per year * $53 after taking out $17 cost = $19,345,000

$19,345,000 * 20 years = $386,900,000 per well * 6 kimmeridge wells & 3 Portland wells at your average production values for HH production - costs = $3,482,100,000 if the oil price is expected to stay at $70 for 20 years.

Penguins

AS far as Godley Bridge is concerned we will have to see what comes out the appraisal look at what has happened at HH after the BP appraisal .

Is the glass half full or half empty.

What is your aim & what are you trying to achieve with your attitude which does not seem objective?

Penguins I am using simple maths to give a 1000 BOPD average for a vertical well with 342 fact as an average for KL3 & an estimate of a rate for KL4 average based on 2016 flows of 450 BOPD for KL3 & 901 BOPD for KL4.

If if in reality a commingled sidetracked well of KL3 & KL4 is only expected to produce 1000 BOPD per well I would be very surprised .

I am not a technical person & I am trying to make sense of it as well.

But in my head if KL4 has a stable rate of 658 BOPD & KL3 has 342 giving 1000 BOPD from a vertical well when this becomes a sidetrack it could produce up to 5 times that amount.

obviously the wells will not flow continuously like this for 20 years but the figures could be being worked out with depletion over 20 years.

The other issues that fall under this are logistical issues & separate and should not be confused with the above figures at this stage imo.

Rodders

The figure with a cost per barrel of $17 = $19,345,000 just under the $20,000,00 per year.

$19,345,000 * 20 years = $3,866,900,000 per well

I think the confusion comes from costs of production

365,000 barrel oil per year * $70 = $25,550,000

365,000 barrel oil per year * $50 after taking out $20 costs = $18,250,000

Penguins

If this statement below is true why do we need a production licence for 20 years when the life of a wells would only be 3 years under this calculation?

In case your math isn't too hot that is 1 million (the expected, by UKOG, production over the lifetime of a Kimmeridge well) times £15 to £20 (which is the back calculated NPV(?) value of a produced barrel of Kimmeridge oil which he said was similar to the NPV(?) of a Portland barrel of produced oil of £15 to £18) which equals miraculously £15mm to 20mm.

As for 1000 bopd per Kimmeridge well throughout even the first year, that's more than a third of the 1mmbbls (365,000bbls). Hmmm something doesn't quite add up - or has SS got that wrong as well as you'd prefer it to be more?

Twaddle Boyzee

KL4 is still cleaning up get your facts right just for once please!

The price has fallen in between the KL3 & KL4 layers & what is described as a temporary fall in commodity prices which had risen as high as $85 per barrel of oil before falling back to the present value.

This is a market and reflects the value at a particular time based on the resources at that moment in time.

The Kimmeridge has no value as it is not in the CPR but it will be with one layer already declared commercial by SS.

This may causes some speculation but it does not infer that UKOG is a inferior company as you like to make out.

This in my opinion it undervalues UKOG.

As far as funding is concerned £12.5 million was raised on top of the cash in the bank, EWT test & production flow test revenues from 2018/19 for the 2019 work schedule.

The planned schedule has now been pushed back to 2020 to bring HH 2,3,4,5,6 & sidetrack online & into production in 2019/20 producing cash flow for the development of the PEDL234 & Isle of White assets which will go through planning in 2019 so a busy & exiting year to come for UKOG.

Should it be necessary to raise funds to accelerate the operations into production there should be many more routes to finance than placings once reserves are known.

This is something that The Motley Fool brigade have neglected to understand or report.

This is a financial product company out of its depth with a poor understanding of the market it is reporting in and although there has been a good amount of dilution as they say what they neglect to mention is that the company has no debt so any cash flow - costs & taxes will go directly to the bottom line without having to make any interest payment imo.

How many companies can say that at this stage of the development never mind all the Acreage that UKOG already hold for development with its proven concept across the Weald for accelerated growth & without new costs.

SS clearly said £15-20million per year if you listen to the interview.

Sorry for double post.