Member Info for ZYX098

Mirasol,

I asked pink trousers at the second to last in person AGM (remember those) and he said that BB really needed a near wellbore frac to get past the formation damage.

Do we know for sure that the HH Kimm fractures petered out?

We have never heard anything from UKOG on why the Kimm on HH was not put on production despite apparently good flows with negligible water.

Indeed, didn't the last RNS to mention it specifically say the the HH-1 W/O was also going to recomplete the Well as a dual Kimm / Portland producer - which they never did and never said why they didn't?

Unfortunately the UK is resource poor when it comes to Geothermal.

There are a couple of areas (the Weald around Southampton is one, the NE around Newcastle is another) where there is enough gradient to install a district heating system (or warm greenhouses for food) at a relatively shallow depth.

But even these would be in the 2,000m range and cost around £3 Million.

Anything more (e.g. power generation) would require much deeper wells which would be at least £10 Million and unlikely to be economic.

Ummm, might want to check your sources - Graphite is a mineral that is mined.

Oh, and for the record, I filtered Ozzy many Moons ago, so have no idea what he is saying.

Morning Ninetails.

It might work in the Bowland Shale, which is several thousand feet thick and extends across much of Northern England.

But even if test wells showed it could be economic, the only way it could possibly work would be for central Govt to carve out a niche within the panning regulations so that Councils could not tie up applications for years - and that's never going to happen.

So, at best, talk of fracing is just a distraction and - as you point out - at worst would be detrimental.

What the Govt could do to encourage more investment is either remove the ring fencing on Corporation tax (RFCT) so it could be offset against losses elsewhere, or at least reduce it to the same level of Corporation Tax that all other industries pay.

In addition, they could get rid of the Supplementary Charge (SC) which is a tax no other industry pays.

But on both cases, the shouty voices on Twitter would mis-represent them as "subsidising the fossil fuel industry" when in reality it would just be reducing the level of tax the oil industry pays to the same as every other industry.

Many of the Earthquakes in Texas and Oklahoma were traced to water injection wells, not fracing.

In one case, the investigation found that the owner of the water well was injecting ten times what he was permitted to do.

There hasn't been enough work done yet (thanks to the eco-warriors) to establish if shale gas in the UK would be economic or not.

But in any case, as long as the UK Govts limit of 0.5 on seismic activity is in place (about 100 times less energy than needed to be felt at surface), it will be impossible for any Company to undertake any fracing activity.

Even 'conventional' fracing like at Wytch Farm, where they frac'd wells underneath some of the most expensive real estate in the Country and nobody complained.

BTW, that 0.5 limit on seismic activity does not apply to Geothermal, which is why they haven't ben shut down in Cornwall yet.

Yup.

When it looked like a couple of thousand steel workers were going to loose their jobs, it was a national crisis in the news headlines for days, Sec of State getting personally involved etc.

During the 2015 - 2020 oil price crash, the UK Oil Industry shed 200,000 jobs and.....silence...

Sorry, ran out of space!

"Am sure that we can both agree that a 53% increase on the fuel cap, whilst increasing NI by 1.25% in April, and enforcing consumers to take a £200 loan is not the most practical solution to the current crisis."

Yes, fully agree.

But we shouldn't lump the energy crisis in with the crisis we are facing in our economics.

For the latter, taxes have to rise - there is no way around it.

For me, I would rather see that fall on the likes of Google / Facebook / Amazon who use international tax laws to spirit away profits into low tax regimes. But that means world wide agreements, which, to be fair, we are just beginning to see as Govts realise that too much money is being concentrated in too few Companies.

As for the energy crisis, my preference was to take out the green levy and put it into personal taxation pile, while introducing a sliding scale of VAT on domestic energy bills. Zero up to £2,000 and then 10% VAT above that (or a flat rate of 10% with a rebate of £200 if your annual bill was less than £2,000).

With respect to the price cap, yes the 53% increase is very bad - but on the other hand, without the price cap mechanism the rise would have been much higher, much sooner.

Hi CynderLad,

No worries - yes I classify myself as 'centre right', although with some decidedly left wing views on some things.

For example, I believe someone working a full time job should be being paid enough that they don't need UC to subsidise their wages - that's just the tax payer subsidising business.

On the other hand, being old enough to have worked for a Nationalised Industry (BGas), which meant we had to use another Nationalised Industry (BSteel) and I commuted on another Nationalised Industry (BRail) means my automatic reaction to anyone who suggests we should nationalise XX Industry is to slap them into the middle of next week....

I abhor the 'dog-whistle sound bite' type of politics we see these days from ALL sides (which the Media are complicit in too) , and I suspect the rise of the SPAD's in the last two decades has a lot to do with it - while the ever larger presence in the HoC of MP's who have never had a real job in their life is also a bad direction to be going in.

We are going down the US Politics route where something put forward by the opposing party is automatically wrong, and changing your mind is not seen as a sign of being smart, or being flexible, or being willing to listen to the evidence - it's seen as being weak ("ANOTHER U-Turn!!!").

As for actually admitting you made a mistake - that's a death sentence for your Political career, even though the execution may be long and drawn out...

The ultimate end can be seen in the US Senate and House - there is no middle ground anymore and all the centrists who could reach across the aisle have been pushed out or jumped out in dismay / disgust.

Back to windfall taxes - the reason why I find the calls for a windfall tax on the oil industry particularly irksome (apart from the fact that Windfall taxes have NEVER worked in the UK in the long run) is that they totally fail to acknowledge that we already pay far more tax into HM Treasury than any other industry thanks to the additional specialised taxes we pay.

These these calls also fail to acknowledge that, during the price crash of 2015 - 2020, we were absolutely on our f'ing knees haemorrhaging jobs and cash, with sod all help.

We were just beginning to recover when Covid hit and kicked us in the nuts again.

Try arranging a crew change on a Rig with 15 different nationalities, where the person coming in for their hitch is from one Country, the person they are replacing is from a different Country and we are operating in a third Country - while all three Countries are changing their rules frequently and with little notice.

As a result, many projects had to shut down, so production that should have been coming onstream didn't and now we are seeing the effect on the Oil & Gas price.

Which, remember, the oil Companies have no control over - the hedge funds buy & sell c. 20 times more oil than the oil companies do...

Just in case CynderLad missed it;

GSK announced their results today, posting a profit of £8.8 Billion on a turnover of £34.1 Billion.

A profit margin of 25.8%....

Oopsie - Shells debt is $52 Billion - not 452 Billion - in too much of a hurry to finish before the next conference call......

So Cynderlad didn't like me pointing out that - when expressed as a % of turnover ( a metric the stock market uses to judge how well a Company is doing) - the single figure profit margins of BP and Shell are derisory when compared to the likes of GSK and Unilever?

O.K., how about these facts?

In 2020, Shell lost $20 Billion and BP lost $5.6 Billion.

Want more?

During the price crash of 2015 - 2020, many NS Fields were operating at a loss.

Still want more?

NS Oil Fields pay 30% (yes, 30%, not 19%) Corporation tax on Production. This is ring fenced (RFCT) so it CANNOT be offset against losses elsewhere.

I suppose we should feel lucky - it used to be DOUBLE the Corporation Tax Rate...

Still want more?

NS Oil Fields pay a supplementary charge (SC) of 10% on top of the RFCT.

I suppose we should feel lucky it was reduced from 20% in 2016...

Still want more?

We used to pay an additional Petroleum Revenue Tax of 25%. This was set to zero in 2016, but not abolished, so it could still come back.

Still want more?

Both Labour and Tory Govts have put windfall taxes on NS production before. Both times it nearly killed off the North Sea, destroyed investment for several years and ended up costing more in lost revenue than it raised.

Sir Ed Davy in particular is a hypocrite when calling for this, because he was Secretary of Sate for Energy from 2012 to 2015 and knows exactly the effect it would have.

Oh, and if you put a windfall tax on Oil Companies profits, don't you think that other industries will look at that and wonder if they are next?

A strong disincentive for investment into the UK at a time when we need it most.

Their profits aren't going straight to shareholders, a large part has to go towards paying down their debts of 452 Billion in the case of Shell and $35 Billion in the case of BP.

BTW, those shareholders? Apart from the likes of many who frequent these boards, a substantial number are held either directly by pension funds, or investment funds holding money for private pensions.

The 'fat cat' shareholder is largely a myth.

France was able to put a 4% limit on energy price increases because Nuclear provides almost 70% of their power. Gas is only around 7% of their energy mix.

Pity the Labour Govt quashed our hopes of building more Nuclear power stations in the 2000's and 2010's by ignoring the results of their own studies on energy policy (because they both recommended building more Nuclear) and compounded it by selling off our Nuclear expertise to the Japanese at a knock down price.

But why look at France and not Germany - their gas and electricity prices are estimated to rise by some 63% this year...

https://www.reuters.com/world/europe/germany-mulls-scrapping-energy-bill-surcharge-early-prices-rise-2022-01-22/

I filtered him months ago, so no idea :)

"AME contributes its 50%-share once expenditure exceeds $5m, so UKOG's price for buying into the licence was 50% of $5m, ie $2.5m"

I'm sorry Ocelot, but that's not the correct interpretation.

Any expenditure up to $5 Million is 100% to UKOG. It's expenditure after that is split 50/50.

If the total cost is, say, $8 Million, then the cost to UKOG is $5 Million plus 50% of the next $3 Million, so $6.5 Million in total.

With the tectonics in that area, it will take more than a couple of days to come up with a well design, verify it can actually get to the target(s), mud weights needed for a stable well bore, cement program and things like torque and drag models.

The really interesting one will be if they can reach both targets with one well.

If the revised target has a large enough step out, they may be able to reach the top target but be unable to drop inclination enough to reach the second target.

Similarly, they may not be able to build enough inclination to reach the top target, but can reach the second target.

Of course, that presumes that both targets are vertically and horizontally aligned - by no means a given in that area.

Brillo,

I stopped listening to Ozzy months ago and filtered him..

I'm just glad there isn't some fool spamming the board with nonsense posts and getting abusive when he gets called out.

"to shift from gas to coal"

Other way around, I think..

That's more like a "Son of a B*tch" than an "Ouch"...

BTW, from Shells Q4 2021 results today, profit = 7% of turnover.

Compare that with the likes of GSK (22.8%) and Unilever (18.5%).

And FWIW, Shells upstream division lost £748 Million in Q4 2020.

Shells debt at the end of 2021 was $52.6 Billion (yes, BILLION)...