Member Info for ZYX098

Out of curiosity, I've seen in the past where shareholders can get motions put forward to be voted on at a Companies AGM, so does anyone know the procedure as to how is this done?

I was thinking of three, along the lines of;
A) Individual salaries of the BoD are capped at the average of UKOG peers (e.g. UJO, Angus, Egdon etc)
B) No bonus scheme for the BoD shall be considered until UKOG has shown a profit for two consecutive years
C) Members of the BoD must take at least 50% of their salary in UKOG shares, which must then be held for a minimum of 3 years.

Of course, the odds of any such motions passing would be negligible, but it would at least draw their attention to how the PI's are feeling.

Penguins,
My apologies, I missed this yesterday.

Of course they won't - lenders will always do their own analysis, but it will use the data in the CPR for a base.
They will use a comprehensive risk matrix (which will include the competency of the current management team....) to decide if and under what terms they would lend the money.
Generally the higher the perceived risk, the higher the interest rate they will demand.

I am quietly confident that HH can be made profitable just from Portland production in the long run, but it needs cash spent on converting HH-2z to a water injector and the drilling & completion of HH-3. In that respect, I think the P2 reserves (which is usually what an RBL facility would use) would be sufficient.

I'd really like to know (and, of course, the silence from UKOG has been deafening) why they have not focused more on getting production from the Kimmeridge at HH, including why HH-1 was not re-completed as a dual Portland / Kimmeridge producer during the recent W/O.

As for the rest of their prospect inventory in the UK, they won't see any cash generation (even if they are economic discoveries) from those for another 3-4 years by the time all the approvals work their way through the byzantine planning system and the appeal(s) to the PI once SCC Councillors have rejected the plans.

Like you, I am sceptical about Turkey. Especially due to the total lack of information on progress & plans from UKOG, while they quote production figures from a field that isn't the most relevant offset.

IMHO, the management teams focus should have been solely to get their flagship field on production properly, including sorting out the water cut issue and drilling the additional well. This is what the £5 Million SHOULD have been used for (and they still haven't said where & when that money is coming from - although we all have a pretty good idea).

Instead of which, they completely took their eye off the ball and spent valuable time & scarce resources on Turkey - which even if it is a successful discovery (and the wording of the RNS will require VERY careful scrutiny) - will not be cash generative until early next year; cash that will have to go to funding the remaining Turkey work program.
So even if Turkey is wildly successful, I don't see any cash being repatriated back to UKOG until at least 2023 and possibly later, depending upon the PSC rules in Turkey.

Could they raise more than £5 Million by means of a share placing? TBH, I doubt they could raise even half that, so where is the rest of the money required for Turkey going to come from?

And where is ALL the money for the proposed UK work program going to come from?

Hi Ocelot,
Even if the CPR was at the lower end of the current estimates for OOIP, recovery factor and $/bbl for HH, that should still be more than enough to cover a $20 Million RBL.

Profit from HH production should then cover the ongoing interest payments.

The issue will be paying back the $20 Million if everything else comes up as well as anticipated by the "XR Swampies" on this board...

TH2

Since you didn't answer the first time, and I can use 'cut and paste' just as well as you can;

You stated "December 2021 is going to look very different and it will be fun to talk about the journey we'll have been on..... sitting on quite a sizeable pile of cash :-)"

I have seen you relentlessly ramping on this board for months, yet you never give actual hard reasons backed up by figures for your claims of "2p/5p soon".

So perhaps you could explain the justification for this statement?

Or will you just throw vague claims around about Turkey, Loxley & Arreton and then claim I'm a swampie / XR member?

TH2 O.K., I'll bite.

You stated "December 2021 is going to look very different and it will be fun to talk about the journey we'll have been on..... sitting on quite a sizeable pile of cash :-)"

I have seen you relentlessly ramping on this board for months, yet you never give actual hard reasons backed up by figures for your claims of "2p/5p soon".

So perhaps you could explain the justification for this statement?

Or will you just throw vague claims around about Turkey, Loxley & Arreton and then claim I'm a swampie / XR member?

Grayling - the last FID proposal I saw, they had the B/E down to around $38/bbl.

Not that that makes much difference to them at the moment - their focus will be elsewhere for a while...

Penguins - correct. Turkey is / was an unnecessary distraction. UKOG really took their eye off the ball, have spread themselves too thin and have ended up being in the position of having several potentially cash +ve projects, but no cash to do anything.

Skwizz - I can see RR reaching £2 by the end of the year, but £3 is a long way off.
A huge hole in their product line is they don't have a power unit for the smaller jet ( B737, A 320 range) and it's the short haul that's going to bounce back much quicker.
Long haul will take much longer as problems with Covid internationally will continue long after we in the UK / West have been vaccinated.
Business travel will still be depressed in the near/mid-future as Companies continue to use Teams / Zoom etc and are unwilling to fly people to areas where the vaccination program may not be up to speed, or there is a risk they will have to isolate when returning back.
The long distance holiday traffic will be depressed for at least another year (possibly 2) while the typical holiday destinations catch up with their vaccination / isolation programs.
And long haul is where the RR Aero division really makes their money - selling engines at (or even slightly below) cost and making their money on the long term service contracts. They'd just started to get an engine lease program off the ground when Covid hit and I'm not convinced that that model will be a money spinner for several years yet.

Many were predicting this back in 2018, as it was clear that the oil industry still wasn't investing to replace production lost after the 2014 crash, with around $1.5 Trillion in development spending being postponed or cut altogether.
Indeed, the oil industry was just starting on the road to recovery when Covid kicked it in the nuts again, causing many exploration / development projects looking to start back up to be put on hold (again).
So it's not a new prediction as such - the onset of higher prices has just been delayed by the temporary drop in oil consumption due to Covid.

IBug - the first link is not working.
In the video in the second link, it looks like the oil coming out of the side outlet is quite gassy which would lighten the colour - an oil/water emulsion could look similar too.
One good thing is that there cannot be any H2S (a common issue in Kurdistan) otherwise they wouldn't have opened the take off line like that!
Did you notice the armoured vehicle coming down the hill at 2:00?!
The wellhead configuration shown at the end is really weird - I've never seen anything like that before. It's certainly not a production well - might be for a (very!) low pressure waterflood or given the paint job and configuration, just cobbled together from spares for show.

If they had the access road & site prepared before the freeze set in, then they could start drilling pretty quickly - especially if they can get the Rig & materials moved in before the thaw.

If not, they'll have to wait until the ground has thawed and dried out to some extent before they can start prep work.

For a normal well location and a small Rig, this should take around 3 weeks, plus whatever time it takes to build the access road - which could be substantial depending on where the nearest access point to a road is.

Fizzocks - if the share price ever got to my breakeven of just over 0.9p, you would not see my ar$e for dust as far as this share is concerned.

The problem with posts like this is that they rely on the fact that it's very difficult to prove a negative.

Correlation does not equal causation.

For example, I went out into my garden to read, and shortly afterwards it started to rain.

So;
Did I go out into my garden to read? Yes.
Did it start raining after I went out into my garden? Yes.
Did I cause it to start raining because I went out into my garden? Of course not.
Can I 100% prove that it did not start raining because I went out into my garden? No.

If you want to see more on unusual correlations, try "Spurious Correlations" by Tyler Vigen and you too can discover why there is a 98.9% correlation between the number of divorces in Maine vs. the amount of margarine consumption.

So the up arrow emoji is replaced with a ? in the LSE chat. Good to know....

What he said ?

Cont'd..

Last line should have read "not for a couple of years"..

What the LSE says you have left in numbers of characters and what you actually have are two different things....

I'm chained in (to steal a phrase that someone else used a couple of weeks ago) unless it reaches 0.96p.

Not going to average down any more as I've too much invested here already.

In my opinion, I can see it going down to 0.11 - 0.12p after the forthcoming placing.

After that, at least for the next year, I don't see anything that will give the share price a permanent, solid rise on anything other than PI hope unless, by some miracle, Sanderson & Cartwright actually show they have some faith in the Company and buy some shares. Then it might go to 0.4 - 0.5p.

An updated CPR for HH could help, but in reality I don't think it will shift the numbers much either way ("greater connected volume" vs. water ingress).

A likely bump will be when the SCC Loxley decision is overturned by the Planning Inspectorate (Q3 or Q4 2021), so maybe a rise of 0.2p - but nothing on the bottom line in real terms as they don't have the money to drill the prospect, so it won't be a permanent rise.

Another possible bump is if - IF - the first well in Turkey is a commercial discovery.
It'll rise maybe another 0.4 - 0.5p on PI sentiment, but in reality won't make any contribution to the bottom line until at least Q1 2022 - and that'll be the Turkish subsidiary which will need the cash to fund further drilling & the production equipment - so again, a relatively short term bump.
Given the locality they are drilling in, it would be unlikely that there will not be at least some shows when drilling in Turkey - the key will be if any oil found is commercial
So any RNS from UKOG will have to be examined with a very fine tooth comb, for what it doesn't say will speak just as much as what it does say - as we have already seen frequently with their previous RNS's.

Will they do any of the promised drilling on HH this year?
Nope. They simply don't have the money. So no hope for any effect on the bottom line there.

Same for Arreton - even presuming the IoW Council passes the planning application first time.

So for the remainder of this year, I think that things might pull together for the share price to get up to 0.3 -0.4p.

But if that 1st Well in Turkey is dry / non-commercial, then I don't see a route to any substantial share price rise without them selling out to a larger minnow, who has some cash in hand to be able to take advantage of the tax breaks built up in previous years losses while pursuing the plans that UKOG have in place.

So, in the short term, I'm not that hopeful.

If Turkey is dry and they can't get finance from somewhere else to fund their work programs, they could well disappear altogether.

Now, IF Turkey is a success and IF they can find & produce oil at Arreton and IF they can find & produce gas at Loxley and IF they can get their water issues with HH sorted out and IF they go back to BB and are able to properly sidetrack, complete and produce the Well, THEN their share price could well go up to the 3 - 4p range - but not for a

The best case forecasts are that at least 50% of the oil that will be needed in 2040 still hasn't been developed.
Worst case forecasts put that figure at over 70%.

All credible research puts peak oil demand at least in the late 2030's, followed by a slow decline over several decades.
The last UK Govt forecast of oil consumption for the UK shows less than a 10% decline over the next 20 years.

Environmentalists talk & act like the demand for oil will suddenly fall off a cliff after we reach 'peak oil consumption'.
It won't.
While it will slowly decline over decades, demand will still be substantial because of all the other processes that require oil.

They also tend to view the world from a "1st World urban" perspective, casually ignoring much of Africa and SEA, where there are 3+ Billion people who aspire to a 'western' standard of living with the increase in energy demand that goes with it.

They are also ignoring developing Countries that have large undeveloped Gas assets (e.g. East Africa). These Countries are going to use these assets preferentially over renewables to power their grids - it's the only way they can hope to keep up with the burgeoning demand for power.

Equally, they are ignoring Countries like Turkey which are nett energy importers, but have potentially substantial undeveloped reserves.

Yes, the Majors (and bit players) are re-evaluating what to do with remote discoveries which have no infrastructure close by (Borders & Southern are the classic example - great asset, but on it's own).
While in some cases they are writing these off, they still need to find more reserves to plug the resultant holes in their inventory, or use new technology to find new reserves that will be more cost-effective to develop.

If the environmentalists continue to target the Western Majors with law suits & trying to restrict access to finance, it's just going to drive a greater % of production into OPEC, Russian and Chinese hands.
None of these have a great track record when it comes to HSE.
It just means more money flowing from the West into the bank accounts of Countries that don't particularly like us and have little regard for International Laws & Standards.

As for the maddyness article, any article that quotes two equally discredited people (Sanderson & Smythe) as their main sources isn't worth the proverbial paper it's written on.

Penguins,
If chemically very similar to the reservoir water, then Completion fluid (and injection water, for that matter) are normally dosed with a tracer so that a simple chemical test can tell the % of each in produced water.

So the nil produced water in October is either a mistake, or was genuinely zero, or they have asked the OGA for further time to be able to calculate correctly. But I doubt the latter - after all, even just volumetrically they should have known how much Completion fluid was lost to the formation during the W/O.

If they'd run a TDT log during the recent W/O, it should have identified where the water was coming from. Possibly edge water coming through the sweet spot (as we surmised a while back), or water coming through the fracture system they had mentioned previously.

In either case, they could have performed a water shut off treatment during the WO by injecting resin or polymer across the affected area. This would also shut off the oil flow, but they would then reperforate more of the lower porosity / permeability sections to make up some of the lost production.

But it would have had to have been extraordinarily successful to shut off 100% of the water flow.

Whichever it is, the continued lack of clear information from UKOG on what is happening on their main asset is shameful.

If you take the amount of petrol consumed by the UK in 2019 (nearly all of which would be for petrol driven vehicles), then to replace that energy content with electricity would take c. 40% of the ENTIRE amount of electricity the UK generated in 2017 (the last year I could get a consistent figure for).
And that's presuming a constant level of demand - not the early evening spikes in demand we'd see when people came home and plugged their vehicles in.
Of course, that 40% power requirement doesn't include all the diesel powered cars & SUV's....

It's all very well manufacturers touting "super quick recharge" times, but in reality this will always be limited by Volts x Amps = Watts
Voltage on the grid to any residential or commercial property is 220V, so the only thing that can be changed in the equation is the Amps - which is why the Tesla 'superchargers' use around 500 Amps (and generate huge amounts of heat and a nice big magnetic field while they do so).
The average house in the UK would struggle to supply more than 50 Amps to charge a vehicle and if everyone in a housing estate plugged in around the same time (say 18:00hrs), then the demand would take down the local substation.

VW released a study in early 2020 (that seems so long ago....) on the environmental cost in terms of CO2 emissions of building a VW Polo Petrol, VW Polo Diesel and VW Polo electric powered vehicles.
I forget the exact figures, but both the diesel and petrol vehicles would emit roughly 29g/Kg of CO2 while the electrical version would take around 57g/Kg of CO2. The huge difference is all due to the battery.
Of course, run it long enough and the electrical vehicle will eventually emit less CO2, but the article didn't give enough information to calculate how far the vehicles would have to be driven.

Current EV battery architecture (which has ben with us since the late 1990's) means it is very difficult to reclaim the Cobalt & Nickel (it costs more than the recovered metals are worth) and the Lithium cannot be reclaimed at all.
While there are different types of batteries in the pipeline (including polymers), none of them are anywhere near being economic.
There is a forecast shortage of Lithium (which in Bolivia takes huge amounts of water in a desert area to mine the Lithium Carbonate base), and the Cobalt & Nickel continue to be mined in China & DR Congo in distinctly poor HSE environments.

Hydrogen fuel cells for vehicles would be a far more sensible way to go than pure EV's.

In the meantime, the best case forecasts are that at least 50% of the oil that will be needed in 2040 still hasn't been developed. Worst case forecasts put that figure at over 70%.
Even the last UK Govt forecast of oil consumption for the UK shows less than a 10% decline over the next 20 years.

So it's great being all "happy clappy" about EV and wind power, but the eco-warriors have to be realistic about what can and cannot be done by 2035.