Member Info for ZYX098

Ells,

Direct question, which you won't answer (because you always resort to deflection or cheap insults when pinned by a question you know you can't answer) :

Why will UKOG drill the Kimm, when they clearly state in their submission to SCC that the Kimm is uneconomic in HH and BB?

Stockraiser,

So what does that say about Ells?

362 posts on UKOG in the last month - and that's just the ones that haven't been deleted....

Ells making huge unfounded leaps in logic.

So no change there...

Seriously, pointing out the way the process actually works is justification to ask someone if they want their family to freeze?

If UKOG can find a farm in partner (and the length of time that Loxley has been up for farm in means that that possibility is getting more remote), it doesn't validate the CPR at all.

As Penguins correctly said, drilling is required to show what (if anything) is there, how well it will flow and if there is sufficient volume to justify development.

As is clearly pointed out in the CPR, the known reservoir quality is extremely variable in both porosity and permeability and the implication is that there are high permeability streaks will will initially produce well.

The issue then becomes how well those streaks will be recharged (i.e. long term production flow rate) and what the fluid recharging it is (hopefully not water, as in HH).

The revised CPR can be produced after the EWT, and then that is what can be used for RBL - if the EWT shows it's worth developing.

Presuming all goes Well, I suspect their main problem will be getting all the approvals for the pipeline.

But to answer Hank13's question, the reason the SP isn't reflecting the claimed value in the CPR is that (unlike the ramptastic crew) the market knows the difference between "2C" and "2P" reserves.

In some respects not a surprise.

They aren't the only Council that invested in property as a "sure thing" only to get caught out by the effects of Covid and the current rise in interest rates, but to be £2 Billion in the hole is....impressive....

The Labour promise to divest more power to a local level is scary, as anyone who reads 'Private Eye' will know just how incompetent many of them are - and across the political spectrum, not just those run by one party.

I don't know what the effect on SCC will be though. They have a reputation for being a well run Council, but like all Councils have had their funding from central Govt. pared back over the decades.

Surrey also has the burden of being the old folks home of the British Isles and pays out huge amounts for people who need care at home and also supporting people in care homes.

Honestly Ells, your desperation is reaching new heights;

"Loxley will be funded by an outsider" - as I've explained in other posts, the most likely option is a bottom hole contribution from IGas.
Somebody else might, possibly, farm in - but they won't pay anywhere near the full cost if they did - they can read the CPR and the obvious pitfalls just as well as the rest of us. Also, big difference between "2C" and "2P" reserves.
Certainly no 'major' will touch this with a bargepole, just from a negative publicity point of view.

"Pinarova is cheap to drill, shallow reservoir, less prone to drill issues"
A "shallow reservoir" that produced oily water on test.
I can drill a 3m deep Well in my back garden. Cheap to drill, less prone to drill issues.
Won't produce any oil though.

We've all known that the June Court Case will fail - it has no legal merits. Effect on the O&G sector? Zero.

"Water reinjector will follow the June outcome"
UKOG have had permission to do the work on the water injector for almost a year and the Court case has no bearing on that work - so why haven't they done it?

"Company still have millions in the bank" - O.K., so exactly how many Millions do they have?
Because the simple maths of what they had in the kitty in their last annual report, plus their cash raises plus their revenue from HH & Horndean minus their Overheads (including BoD salaries) minus the work they did on HH minus their expenditure on the CPR, Basur-3 and Turkey seismic indicates that there isn't that much left in the kitty at all.

And certainly not enough to drill Loxley.

Their best bet is to divert the remaining funds they have allocated to B-4 back to Loxley so they can reduce the amount of confetti they have to issue to fund Loxley.

"You've met your match Penguins" - laughable.

The negatives out there for UKOG still outweigh the positives. Loxley really is their last chance saloon for any growth, otherwise it will remain a lifestyle Company for the BoD (who still aren't buying any shares...) and the only opportunity for punters to make money will be on the P&D's.

Ocelot,
"2/ The directors believe that UKOG will be able to offset a significant portion of the CPR's calculated Corporation, Supplementary Charge and Energy Profits Levy taxes against prior UK onshore sunk costs and future investments, further improving the Company's net revenue from any future Loxley production."

Be careful of their wording!

RFCT and the SC are set up for each specific asset and the wording of the tax law is that losses or expenditure from other parts of the Company cannot be offset against it.

In other words, they will be able to offset previous expenditure on Loxley against RFCT and SC, but NOT the funds spent on HH or BB.

They can offset the costs of drilling Loxley against the EPL, but they have to find the money to do the work first, then they can claim the refund against the EPL from production.

Presuming they find enough to produce, that is.

Ells, only by you and Rocky's wife.

CDF1 - before you filter all the 'negative' posters, just check back on the posts on this board over the last, say five years.

You will see that the 'negative' posters have been far more accurate in their predictions (and backed up with facts and logic), as opposed to the 'positive' posters who incessantly try and ramp up the share, don't respond to direct questions about their posts (avoid by deflection, or just ignore) and then quickly resort to cheap insults.

Like Ells just did with CynderLad...

BTW, at least three of the 'negative' posters actually work in the oil industry and one of us runs Drilling Rigs for a living...

Apologies, reading through it again I see I didn't answer your question!

If (big if!) Loxley does come in, it will be several years before the cash flow materially affects the balance sheet (and UKOG have a long history of not meeting their own published time-tables). UKOG will still be here and the MCap could be heading North to decent territory (c. £60 - 70 Million) by 2026.

If Loxley doesn't come in, they will still be here in 2026, but staggering on as a machine for the BoD to get their salaries and the only chance for punters to make money is on the P&D's.

Fitzy 66,

If you look at the posting histories on here for, say, the last 5 years, the 'derampers' have consistently been correct in their forecasts about UKOG's prospects way more than the 'ramptastic' crowd.

Ells claim that the CPR will start a bidding war to farm in is a typical example - it won't as any Company that actually reads the CPR will see the numerous obvious potential pitfalls (I suggest you read the CPR thread..) and they also know the difference between "2C" and "2P" reserves.

UKOG announced that they were looking for a potential farm in back in September. Ells loves to put up the quote from Angus that indicates they might be interested, but they've had five months to farm in and haven't. They have issues at Saltfleetby, so don't have the cash now anyway.

IMHO, a bottom hole contribution (not farm-in) by IGas is likely the only potential outcome in that respect.

After all, if UKOG's prospects were that great, why aren't the BoD falling over themselves to buy shares?

No, it doesn't.

UKOG were not in a closed period, so he could have bought shares at any time - but instead stopped buying just as soon as he could.

CDF1,

You are welcome!

UKOG made a critical strategic error in going into Turkey (I said as much at the time), wasting valuable resources in time and money that they didn't have on what was a very speculative venture.

Turkey was - and remains - a distraction. Pinovera is a complete waste of time. Even if Basur-4 finds oil, the history in that area is of low productivity wells which ultimately will really not materially affect their balance sheet.

Most rampers seem to think that any success in Turkey will immediately allow funds to be transferred back to the UK.
Nope, they will have to remain in Turkey until at least the first annual accounts in Turkey are published.

They should have concentrated on sorting out the issues with HH first, and should still prioritise that - but for some reason are very reluctant to do so - the general feeling is that there's something more going on at HH that they haven't let the public know - especially with the Kimm.

After all, the time to work on maximising the production of your main asset was last year while oil was over $100/bbl.

Excuses about the Court Case preventing work are just that - excuses. There is no chance that the Supreme Court will find against UKOG in June.

Hydrogen storage is another distraction - the project is completely out of UKOG's capabilities to manage or finance and given their size and past record, no Company (or Govt) will give them money to develop Portland.
And it will take over a decade of planning & development work before any return on investment could be seen. The other thing they haven't said is where the H2 to fill the caverns would come from in the first place..

So that leaves Loxley.

They will need a placing to fund the site construction and drilling of the Well.
At the moment, the size of the placing needed is huge compared to the market cap. of the Company, so my recommendation to them would be to forget Turkey and divert the funds left in that pot back to the UK to help fund Loxley.

If it is a success (and that is by no means guaranteed - RPS over-estimated Hurricanes reserves by a factor of 10!), then that depends on the results of the long term test. Remember, it's gas, so they will get no revenue during the test.

If you saw my post on the CPR thread, you'll know that there are a lot of potential challenges that could trip them up - same as on HH with the early water breakthrough.

So Loxley is their last chance saloon and the CoS is probably in the teens.

Finally, ask yourself this question. If the BoD are confident in UKOG's prospects, why haven't they bought any shares?

Only SS has done, and that was a genius move by him to spend £1,000 pcm every month (or about a days salary...) for a year to save himself from the then growing movement to have him removed.
But he stopped buying shares as soon as he could.

The BoD could greatly ease UKOG's cash flow drain by accepting shares in lieu of their salary - but they don't.

I suspect either you misunderstood him, or that particular conversation was last Summer - because we aren't and haven't been for several months.

But we do export Gas during most Summers for the reasons I expanded on in my previous post.

What we do do regularly is export most of our oil - around 80% of production actually.

The reason for that is that much of NS Oil production is sweet, light crude, which commands a premium on the market.

Indeed, it's why 'Brent' is used as a benchmark price, even though the Brent Field itself stopped producing Oil about a decade ago as the field was converted to blowing down the gas and has now been decommissioned altogether (creating a world record for the largest single lift of 25,000 Tons in the process).

In it's place, we import cheaper, lower quality crude which our refineries can use to meet our needs.

It's this 80% export figure that some in the Media (cough - The Guardian - cough) use misleadingly to claim that we don't need NS Oil Production.

We do, as ultimately we produce roughly 1 Million BOPD, but consume roughly 1.5 Million BOPD. That 1 Million BOPD contributed hugely to our balance of payments even before the catastrophic windfall tax was imposed.

Incidentally, even HM Govts own research studies have shown that UK oil consumption will only drop by c. 10% by the late 2030's, despite what the green warriors would have us believe.

Posting fact in block capitals and with full stop spacing doesn't make it true - which it isn't and hasn't been for several months.

During the summer, yes, we were exporting gas (both raw and LNG) to the Continent as fast as we could. This is what helped them build up their gas storage reserves so quickly, despite Putins efforts.

It's part of the normal cycle that sees the UK export power to Europe during the summer and then import power during the winter through the interconnectors.

This year it was exacerbated by Putins actions, the drought causing several European power stations to shut down due to lack of cooling water and the shoddy state of the French power grid, which actually saw them become a net importer of energy last year.

It showed that our long term investment in LNG terminals was greatly benefitting to us, as we could react much more quickly than Europe could.

This action stopped the prices potentially spiking even higher during the Winer, which - fortunately - has been very mild across the Northern Hemisphere and seen the gas price fall significantly below what would have been expected - and no power cuts either.

BTW, the National Gird has a great site which shows this amongst other really useful information:-

https://grid.iamkate.com/

Ibug,

"This will put a few off."

I doubt it - facing reality isn't the forte of the ramptastic crew.

Although the smack in the face when the placing to actually do something on Loxley drops might help bring them back to Planet Earth.

And it's going to be a big placing unless they divert the funds earmarked for Basur-4 - which they should.

Hmmmm, forgot about Perenco.

Could they be interested in a farm-in?

Possibly, but I doubt it.

They have a lot going on Overseas to look after and will shortly be commencing a 6 - 9 month P&A program in their Dorset assets (Wytch Fam etc) and so far have managed to fly below the radar of the XR types - possibly because the good citizens of Dorset are used to the Oil Industry operating in their area with none of the prophecies of the 'doom-and-gloom' merchants coming true.

Indeed, when it was being operated by BP, there was a comprehensive frac'ing program caried out on Wytch Farm underneath the most valuable piece of real estate in the Country outside London (the Sandbank Peninsula) with zero effects on (or complaints from) the local community...

Penguins,
Well, one concrete thing we learned is the export pipeline is 6.6 km long.

The depth conversion is a big concern, as the addition of just 10’ of perfs cut gas production by 28% and started flowing formation water. The accuracy of survey programs back then left a lot to be desired, so that’s another source of potential error in the GWC.

They should (should!) drill a deviated Well first to get their depths confirmed, before plugging back and going horizontal for the final well bore.

Water encroachment is clearly a concern, which is why RPS included it, even though UKOG did not.

The wide variability on porosity (6% - 24%) and permeability (0.02mD to 900mD) would indicate a very variable reservoir – as evidenced by the results of Alford-1 – and RPS specifically raise the clear facies change as an issue.

Given those reservoir characteristics, the chances of a high permeability channel (as in HH-1) allowing early water encroachment is obviously high. We already know the water is there from the 38% - 63% water saturation.

The skin on the DST was reported as 165. That’s extraordinarily high and they need to figure out if that’s a function of the way the test was conducted (perforate overbalanced and then run the DST string?) or drilling, as that would be a real kick in the nuts for production rates.

The presence of 4% N2 is not good – means a lower calorific value and hence lower sales price for the gas.

The presence of H2S and CO2 is bad news. It will need stripping out (higher processing Capex & Opex) and the greenies will no doubt seize on the H2S as a safety concern, even though it’s only 60ppm.

The CO2 will likely mean they need to use Cr13 tubing, because as soon as any water gets produced, the Completion (and Xmas Tree & surface piping) corrosion rates will go through the roof.

Their presumed Well cost of £4.64 Million is 25% too low given the current market – and that’s presuming the site construction cost is carried elsewhere – which it doesn’t appear to be.

The uber-ramptastic crowd clearly don’t understand the difference between 2C and 2P reserves, so this CPR can’t be used for RBL funding.

It just might encourage someone to farm in, but who?

A ’major’ won’t touch Onshore UK with a bargepole – too much of a lightning rod for XR and Momentum acolytes.
Angus have their own issues to sort out at Saltfleetby, so don’t have the money.
Their only avenue would appear to be to try and get IGas to make a contribution (not a Farm in) based on the mapping showing it going into PEDL 235.

All in all, a typical UKOG RNS, followed by the usual suspects appearing to ramp up for a P&D before the incoming placing announcement.

This will be back down to 0.06 – 0.065 by the end of the month.

Really?

"Rocky's Wife" is insulting and bile?

My, you are sooooo sensitive.

I'll bet you haven't even worked out the connection....

Right, I'm off out.

I look forward to not seeing you here in the morning.

No Rocky's Wife - you are describing your usual tactics.

Did you or did you not post "Says the most condescending insulting rude muppet on the board" at 15:34hrs on the FOMO thread?

I'll save you looking it up - you did, it's there for all to see until you get tossed from the board (yet again) by Admin in the morning.

And exactly what "insults and bile" do I spew out? Care to post any examples?

Or do you just get upset because I remember that you made fun of fighting a fire on an Offshore Platform, and laughed about a man being killed when he went overboard from the JU Valaris 121?

"No need to be rude", and yet just before that on another thread posts "Says the most condescending insulting rude muppet on the board".

Breath-taking hypocrisy from the green shorter.

Rocky's Wife,
Wow - even by your standards that's really tortured logic, especially since I've posted several times that she'll loose and (unlike you) I actually work in the oil industry.

Besides, you are the one that is besotted by Sarah.

You've even professed that you prefer her in shorts to yoga pants.

I think the reason that you are so focused on the Court date is because you know that she'll be there, so you can see her again - though in a Court setting I doubt she'll be wearing either yoga pants or shorts.

"Most condescending rude muppet on the board" - oh no, that's you - by a loooonnngggg way...