Member Info for ZYX098

If RKH need some additional cash, why wouldn't they use the CPR to get a loan from the banks?

Surely that would be better than issuing some more shares and therefore diluting shareholder equity?

Service Co's effectively farming in are few and far between. On the odd occasion when it's happened, it's usually a reactivation (as already mentioned) or a field needs a comprehensive W/O program which the Operator cannot afford. I've never heard of it happening in such a new field development.

Chess - you logic is flawed. With Navitas taking over Operatorship and effectively redoing the FDP, nobody would be interested in farming in until that work had been finished and Navitas could put relatively hard numbers on their costs- something that they've only recently been able to do.

Anth72,

Yes, I got distracted and lost my train of thought - very clear now I read it back!

Of all Countries that may farm in, China would be up there with Argentina and Russia as those that are least likely to be given permission.

Firstly, China have publicly supported Argentina's claim to the Falklands, so I think we could rule them out on that basis alone.

Secondly, the ongoing problems that the FIG have with the Chinese illegally fishing in FI waters wouldn't be conducive to the FIG looking kindly to a request to farm in.

Finally, I don't think the MOD would approve of a plane full of Chinese requesting landing permission at Mt. Pleasant Airport, or them having a presence on the island....

With respect to the weather conditions, SL is regarded as being "North Sea" equivalent weather.

The BOR area is a long way SE of this, and effectively out of the lee protection offered to SL by South America. If I was being charitable, then maybe the WoS equivalent.

Also don't forget that there isn't actually much weather data available in that area - it was a standing joke on the UKCS in the 1970's and 80's that the 100 year storm happened every year! This lack of knowledge was a contributing factor to the loss of a couple of JU's in the Southern North Sea the 1960's.

As I noted, the SE Asia NOC's don't have experience of these kind of conditions and also the FLNG vessels are much longer than a normal FPSO, which means that the fatigue loading is proportionally much larger.

As an example of how much this can make a difference, Maersk wanted to use one of their 'baby' 6th Gen Semis ("Developer" class) in the North Sea, but discovered that it's lifetime fatigue allowance would be used up in just three years!

Gus - "Testing is a formality" - no.

Testing the first Well on a new structure (and especially in a new frontier area) is never a formality.

Apart from the fact that a new Well would have to be drilled (and yes, even though cost sharing some of the shore facilities with Navitas would reduce the cost, you are still looking at $125+ Million), there are many reasons why a Well may not test as much as the logs would indicate.

Firstly, permeability cannot be measured directly from the E-Logs. These days it can be inferred to a certain extent, but this is by no means a certainty.

Just from my own experience, I've had Wells that look good fail to test because the permeability just wasn't there. Another one where it turned out that the clays were mobile, blocking off the pore throats and therefore flow.

Another had over 30m of gas pay, but we could see it was fractured. The E-logs can tell you if there are fractures, but not what is in them. In this case it was water - and we flowed it for a loooong time trying to show otherwise.

Look at Afren in Kurdistan and Hurricane on the UKCS for "formalities" that weren't.

I'm optimistic, but let's not count the next Generation of chickens from eggs that haven't been

LTT,

I just don't see Navitas looking to expand their operations any time soon.

Navitas have so much on their plate with SL - remember, only their first development as an Operator - that I think they'll be totally focused on getting that over the line (I mean to 1st Oil, not FID) , while also working up more Exploration prospects.

If they are looking for other acreage, I would have thought their priority would be taking out JHI and getting PL001, over anything in the SFB.

If I was looking for someone to come in and take BOR over, it would be one of the SE Asia NOC's, as they are looking for Gas they need to power their economies. In this case, the Condensate would be a bonus.

Possibly someone like Petronas, who have been operating FLNG facilities for several years, might be in the running.

But the weather in the SFB is a big hurdle to over come for an FPSO - they aren't called 'the roaring 40's" for nothing - and the SE Asia NOC's (or anyone else, for that matter) really don't have any experience in that respect.

Also, we have to be realistic that, no matter what the mapping and provisional resource estimates show, just how interesting is a field in such a remote location that has only one untested Well on it?

We also know that there is a possible hard stop on 31st Dec 2026, when the BOR (and the RKH SFB) license expires.

I suspect the recent fund raising to give them cash to operate until the end of 2026 is no coincidence - they may well have been told by the FIG to 'use it or lose it'.

In which case any potential suitor will be looking at the equation of "how much am I prepared to pay to get the license now and enter negotiations with the FIG for a work program to extend it" vs. letting the license expire and then going to the FIG and hoping to get it in the next license round - which may involve committing to a much larger work program as it would be an open round.

LTT / Ovets,

You are both correct.

The likes of Grim add nothing to this board and it would be preferable if they were not engaged with.

But if you don't and just green box them, then newcomers or the unwary may swallow their bilge, as the giant holes in their fact and logic free posts wouldn't be pointed out.

Grim's posting history says it all - 69 in the last month, all on RKH, all either negative or just cheap insults with nary a fact or reasoned argument in sight.

Judging by the frequency Grim posts against the total number of posts he's made, he's obviously been around for a lot longer but either gets banned or changes his ID whenever he digs himself in too deep.

Saw the same thing on the UKOG board. Really the only reason I continued checking in on that board for the last couple of years was there were several uber-rampers, who were clearly trying to influence others into buying by making fantastical claims which had no basis in fact or logic.

Hi Mirasol,

I'm talking about the digital drilling data from the Mud Logging Unit or the MWD/LWD tools.

They'll have (or should have!) electronic copies of things like the Daily Drilling Reports and Mud Logs, but these will be PDF's, not the original ASCII files.

JEBR,

Correct - Drilling is wayyyyyyyy behind what the G&G / Reservoir chaps do with computer modelling.

We are like a DC 3 to their Space Shuttle.

But in my time, I have seen drilling very much go from being an art to a science - we can now do things on an everyday basis which were simply impossible when I started.

Ralph - given the mount of seismic data available, I would be astonished if Navitas haven't put it in the cloud.

Ralph / Mirasol,

Very interesting discussion.

The main issue with any computer program (and also AI) is validating the data that is fed in. It's the old adage of shyte in = shyte out.

On the Drilling side, historically we have been quite slow in making use of the data that is generated (which is tiny compared to the amount G&G generate from even a small 3D seismic shoot), but we are getting much better at it.

One of the big issues for us (Drilling) is digitising old data.

It's very rare we get access to the digital data of an offset Well (it wouldn't surprise me if the Navitas chaps only have paper copies of the original RKH or even Premier drilling data) and then we make it more difficult for ourselves by using multiple different units systems to measure the same thing.

A simple thing like mud weight might be in PPG, S.G., lbs/cuft or PPTF - and sometimes it's not even clear which is being used!

Unfortunately where we are also running into some difficulties in that the 'old grey hairs' that are needed to interpret/validate the old paper/PDF reports have largely retired, or (in the UK) been forced Overseas by IR 35.

So the next Generation (who have often spent their formative years behind a desk and not the Rig site) - are sometimes missing the experience to recognise that some data looks out of place before it's been fed into the model, or alternatively question the results that are being spit out at the other end.

But the potential is remarkable. I was asked many, many, many Moons ago to go into an experimental room, where the Operator had set up so that we could put on a VR headset and special glove and immediately be immersed in the geology of a particular field.

Using the glove, I could "grab" a Well and use the glove to position it in the desired place in the reservoir, and then "grab" the rest of the Well in other places to develop a directional Well path from the surface location - which would then print out the directional program required.

Back then it was a bit clunky and it took ages to reposition the Well once it was grabbed - I often wonder what it looks like now!

Lasson,

Thanks very much for the article, which I hadn't read before.

Actually, I missed a lot of the news flying around at that point as I was working Overseas in an area with very little access to the Internet. It was only when I got home and saw how my RKH and BOR shares were doing that I found out that big discoveries had been made (It was three months before I found out that Cairn had struck it big in India and my shares had increased about 20 fold in value!).

I'm always a little skeptical of announcements like that with - in reality - only two data points some distance apart, especially in a fan type play, were fans can come in and out of existence over very short distances. In this case, the original Isobel Well wasn't logged either, so there is a limited data set available.

Always be skeptical of extrapolating 'oil down to' depths in poorly explored areas, as you don't know if there are multiple OWC's in the fans, or faults in between the Wells (somewhat ironically, Hurricane is a prime example of this).

Remember, we are trying to extrapolate what is going on some 2km down over an area of many sq km, from two holes which are 8 1/2" (or, at best, 12 1/4") in diameter, and noises made at surface!

Having said that, I am very optimistic that there are a lot more reserves to be found in the basin, although we might have to wait a few years. I may sell some of my RKH shares after FID to get my original investment back, but will definitely be hanging onto the rest.

Thinking on it further;

Just reading through the various presentations, I would guess that they have 20+ potential prospects to work up for a possible exploration program.

Personally I don't (yet!) buy into the hype around Isobel and it's potential size, but there is still plenty more to look on as a potential upside.

I suspect their G&G team will be too busy working on the Phase 1 FID and the project work required for Phase 2 to be worried about possible Exploration Wells yet.

Plus I think Navitas & RKH will want the comfort of getting cash flow from SL Production before embarking on what should be a major Exploration program.

So in that respect I think it'll be a few years yet before we can expect a serious upgrade to the basins reserves.

But I'm willing to wait.....

AimDogs,

Unless Surrey CC can find a legal way to take hold of UKOG's share of Horndean and Avington to sell them off (which I doubt would be legally possible), then inevitably the Surrey taxpayer will be left with the cost.

Officially, if the Operator can't pay, then the responsibility falls to the landowner - which is why West Sussex served notice on both UKOG and the owner of the BB site.

But I think HM Govt and the NSTA have tacitly accepted that that is not a practical solution, as the landowner would be unlikely to have understood the scale of the liability and in any case would almost certainly lack the financial and technical capability to do the work.

I wish that Directors could be held personally responsible, but that's not possible. In any case, they'd find some way of putting their money into a trust or in their Spouse / children's name so that it couldn't be got at.

MD,

Earlier this week you were promising that the share price would drop to 40p as a result of the RNS, and yet.....

So would you care to explain why your forecast was so wrong?

Navitas state that 1st oil will be in Q1 2028 (delayed by 3 months because FID has been delayed by 3 months....), but you still claim that 1st oil won't be until 2029 - 2030.

Yet you never post any facts/logic/information to back up your claim.

Why not?

If you really have DYOR and think your date is more valid that that of the Operator, then perhaps you should share your findings with the rest of the boards - i.e. Navitas, RKH and this chat board.

I'm not going to hold my breath waiting for a reply, because you will use some weasel words to try and, well, weasel your way out of providing an answer.

And that is precisely why you have no credibility and can only resort to cheap insults.

Thanks Mirasol, good to know.

Paul - yes, it would not be a good look if they came out with different figures, but even if it just re-iterates the original RKH estimate, the SL project is still viable.

I thought that Navitas were originally going to get the SL funding through the bond market, but now are going down the route of getting the funds through an investment bank?

Is this change in the funding model good or bad?

Now, what I know about that side of things can be written in very large letters on an A5 piece of paper, so don't be shy about pointing out if I'm being a complete Numpty on this...

But wouldn't it indicate more confidence in the project?

Israeli Pension Funds have to by law have the majority of their holdings in Israeli Companies, so I would have thought the bond route would have been an easy way to go, but potentially more expensive to Navitas?

Just scrolling (very!) quickly through posts from the last few days, it appears to be the thought of many on the board that RKH would use this to help farm out a little of their share to get financing?

But why not use it to go to the banks to act as collateral, so RKH can get a loan to cover their share of the cash calls when they come?

IIRC it's called "Reserves Based Lending"?

Wouldn't that be better than farming down some of their %?

I'm also curious about the phrasing "independent resource report" - normally this would just be called a CPR, so is there any difference between the two?

As a reminder, this is what RKH said in their RNS;

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Rockhopper is not an addressee and has not been party to the production of the March 2025 NSAI Independent Report. The March 2025 NSAI Independent Report has been produced to PRMS standards. The last independent resource report commissioned directly by Rockhopper was the ERCE 2016 Report which had an estimated 2C value of 517 mmbbls. Rockhopper has commissioned it's own independent resource update to be published shortly

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Reading between the lines, another reason for RKH to commission the report is to validate Navitas' increase in 2C reserves. I suspect having such an increase without any new data raised some eyebrows.

Rumblefish,

There wouldn't be any change out of $200 Million, and a cost in excess of $250 Million wouldn't surprise me either.

You'd need to budget $25 Million - $40 Million just to mob the Rig and equipment down there, $1 Million pd Operating costs while drilling & testing, and then consumables (wellhead, casing, mud & cement) on top of that.

If they mobbed a Rig for two Wells, I would think they'd do an Appraisal Well on Darwin East and an Exploration Well on Darwin West in preference to going to Covington.

Better to prove up the core asset before stepping out elsewhere.

I'd be curious to know how they left Darwin East-1. Was the Well Plugged & Abandoned, or just suspended?

If the latter, there is a possibility they could re-enter the Well to do a test program - though I'd imagine that that would also entail redrilling the last hole section and running & cementing casing prior to doing any test program. But still cheaper than drilling a new Well.

There would obviously be cost savings if they could share the Rig with Navitas, but I don't see Navitas even considering doing any more Exploration until they've got 1st oil on Sea Lion under their belts.

However, Navitas would be only too delighted to share at least the Supply Base and Helicopter costs. They might also be able to share Supply Vessels, but that would depend on Navitas' requirements at the time.

Similarly, they might be able to do a deal to get seats on the Navitas crew change charter plane, but again that would depend on Navitas' requirements at the time.

Of course, Rockhopper still have an Exploration license in that neck of the woods too......

Anth72,

You are welcome!

I aim to please, but frequently miss.....

TH2,

Ignoring the facts again.

Like UKOG being suspended because they can't get the accounts signed off.

Like UKOG being served with a notice by WSCC to Decom BB-1 - which will cost c. £1.3 Million.

BTW, that's £1.3 Million they don't have.

UKOG failing to engage with SCC at all about getting HH back online, instead removing some critical production equipment.

So they'll be served with a notice to Decom HH in the near future by SCC - which will cost another c. £2.5 Million.

That's £2.5 Million that they don't have.

And Govt support for Hydrogen far from being a sure thing is already a year behind the original schedule, with no sign of any attempt to get it moving.

https://www.energyvoice.com/renewables-energy-transition/hydrogen/572947/hydrogen-sector-needs-government-backing/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20Daily%20Newsletter%202025-05-21&utm_term=Energy%20Voice%20-%20Newsletter

Oh, and Sarah Jones isn't the Energy Minister either - she's the Minister of State for Industry.

But then again, Energy Minister sounds soooo much better to your 160 followers on X.........

After all, it's not the first time that UKOG have been 'economical with the truth' and not the first time TH2 has been uber ramping without the benefit of using facts and logic.

Anth 72,

In remote locations, it's quite common to not take a Well Test Spread with you.

They are bulky bits of kit to keep on the Rig all the time and expensive.

Since on average only about 1 in 8 Exploration Wells find hydrocarbons, it's a risk assessed by the Operator beforehand.

For example, RKH didn't have a Well Test kit on the Rig when SL was discovered either. But they had a long enough program that they could suspend the Well, keep the Rig busy drilling other Wells and then return to test 14/10-2 when the test kit arrived.

Some semantics on Well definitions for you;

An Exploration Well is the first Well drilled on a particular structure. If it's a discovery, then it is usually (but not always, as we have seen with DE-1) tested - i.e. a Well Test.

Subsequent Wells drilled on the same structure to establish the size of the structure and potential reserves are called Appraisal Wells. These are usually tested as well.

If the size of the field justifies development, then those subsequent Wells are called Production Wells (or injectors, if they are for produced gas or water injection).

The original discovery was drilled on Darwin East, so another Well drilled on the same structure would be called an Appraisal Well (and likely named Darwin East-2).

With respect to Darwin West; From seismic definition of the structure, it's geological relationship with respect to Darwin East, and the presence of Gas Condensate on Darwin East, it is a reasonable assumption that Gas Condensate will be present in Darwin West too.

However, the structure and presence of hydrocarbons can only be proved by drilling a Well, and since it would be the first Well on that structure, it would be called an Exploration Well.

As to the possibility of development of Darwin East, with only one Well drilled on the structure and that Well not being tested, nobody would dream of going straight into a production scenario without drilling and testing at least one (and almost certainly two) appraisal Well first.

If you've gone to the expense of actually mobilising a Rig, associated services and consumables (e.g. casing, cement, drilling fluids) to drill an appraisal on Darwin East, then drilling an Exploration Well on Darwin West in the same program would be a no brainer, as you'd be able to share the mob/demob costs.

Hi LTT,

I can easily see them going to phase 2 FID prior to 1st Oil, but would be surprised if they went as far as phase 3 FID.

Actually, it wouldn't surprise me if they went to phase 2 FID early next year, although my bet for phase 1 FID is that it will slip to late Q3 / early Q4 this year if the 'bar-chat' at the OTC last week is anything to go by.

Yes, Shenandoah etc is proceeding at a great pace, but it is in a well understood area with loads of offset information w.r.t. the reservoir and production characteristics.

That's obviously not the case with Sea Lion, plus the added complication that it's a very waxy crude would, I feel, mean that at least some caution is warranted - eggs and chickens etc etc.

My understanding (open to correction if anyone has better information) is that the 1st FPSO was only for the initial phase of production, and then a 2nd - different - higher capacity FPSO would be brought in as more development drilling took place. The Aoka would then be redeployed for production from the Southern lobe.

As for the capabilities of the Aoka, I'm afraid I have no idea - my area of expertise is further upstream!

But whatever they do to her in the shipyard during the refurb would dictate her production capacity - there's no capability to upgrade during production.

M-D,

If you have always "stated the facts", then where is the evidence for your claim the SL 1st Oil won't be until 2029-2030?

And I see that you are still ignoring my queries on the "Market-Dealer, Why?" thread.

So it really does look like you are just throwing out random statements, with no actual facts or logical thought to back them up.