Member Info for ZYX098

Cynderlad,
"That's a load of boloney and you know it."

Rather than dismissing it out of hand, look it up yourself.

I never said anything about levelling up (would you rather the Govt DIDN'T spend any cash on trying to level up??) or new Hospitals - but don't pretend that Govts of all colours don't do the same thing.

Gordon Brown was a master at it - he used to announce a big spending spree on something just before the budget, announce it again at the budget but state that it would be enacted in 15 or so months, just so he could make the same announcement at the next budget.

As has been stated in the press many times, getting rid of VAT on fuel bills would disproportionately benefit those that pay higher bills.

FWIW, I wrote to my MP suggesting that a sliding scale of VAT on fuel bills be introduced, 0% on the first £2,000 and then 10% from then on. But...

Anyway, I don't recall getting rid of VAT on fuel bills as being a prime component of the Brexit machine (it's funny how many things have been labelled as the 'main component of the Brexit machine' over the years..), a BBC Fact check even said the same thing;

https://www.bbc.co.uk/news/uk-politics-eu-referendum-36430504

But I do remember it being used as the reason why the 'Tampon tax' couldn't be removed. And you do realise that our finances are in a parlous state because of the pandemic, right?

You say the oil companies are making an absolute killing - depends on your definition of absolute killing - like I said, as a % of their turnover, their profits are derisory - just look at the profit margins of GSK and Unilever.

BTW, did you miss the part when I pointed out that for decades the UK Oil Industry paid DOUBLE the rate of Corporation Tax? And STILL pays production taxes than no other industry does?

Did you know the marginal tax rate on Forties production was 98%, and over 90% on most of the giant fields?

Don't equate the Oil Companies with the energy supply Companies - two completely different animals and as I've already pointed out, they energy supply Companies only make a laughable 1.8% profit margin.

But from your posts, are you advocating that when Oil Companies make a profit, they should be taxed heavily on it, but when they don't, they shouldn't get any support - like when we were getting hammered in the last oil price crash?

That's a rather odd way of looking at things and a good way to drive all investment out of the UK.

If you advocate higher taxes on everything, then just look at what happened to the UK under Labour in the 1970's. They put taxes rates so high that high earners (the great 'brain drain') and Companies fled the country, resulting in us having to go to the IMF with begging bowl in hand.

The banks? No argument there - I'm still mad than none of them ended up in Jail after the 2008 crash (watch the film 'The Big Short'), but did you miss my point that the CONSERVATIVES put an additional 8% tax on the banks? Not Labour?

Morning Cynderlad,

Get out of bed the wrong side this morning, did you? Or did the Guardian editorial get you all riled up ;)

Although the profits look big in pure numbers terms, in terms of a % of turnover, they are derisory.

For example, on average the energy suppliers make just 1.8% profit on domestic supply - if they did make such huge profits, there wouldn't be so many of them failing now, would there?.

Even 'big oil' company profits are lousy compared to other Industries when expressed in terms of a % of turnover. An oil Company makes $1 Billion a year in profit and it's headline news amid cries of 'price gouging' and 'pigs in the trough', but nobody bats an eyelid when a bank announces it made $3 Billion profit that quarter...

BTW, GSK last year made £6.97 Billion in pre-tax profits. Unilever made £7.8 Billion.

Bear in mind that if we didn't have the price cap (introduced by the Conservatives!), energy bills would have shot up already, like they have elsewhere.

As for taxing production, for decades the UK oil industry paid DOUBLE the rate of Corporation tax of the rest of the UK. Even now, it still pays additional production tax that no other UK industry does.

The Govt knows better than to introduce a windfall tax - that's been done twice before (by both Labour and Conservative Govts) and both times it nearly killed the North Sea, which was in far better shape back then than it is now.

Do you forget that during the most recent oil price crash from 2015 - 2020, the majority of Fields on the UKCS were operating at a LOSS? Which is the only reason why the Govt finally dropped the additional Corporation Tax take.

As for taxing the banks extra, there is an 8% surcharge on bank profits - introduced by the Conservatives....

Did you forget we signed a trade deal with Norway in June last year, which came into effect in December?

Even so, what difference would that have made to the gas price we pay? It's an international commodity traded worldwide (which is why we are suffering high prices, and will do for some time to come) and would not be subject to any trade deal.

As for VAT, a little thing called the pandemic since the Brexit has put a very large hole in our finances. Are you really calling for the Govt to drop VAT rates and make that hole even bigger?

But the fact is we can now change the VAT rate to suit our circumstances, which we couldn't do before. Indeed, the EU have been pushing very hard for several years to harmonise VAT rates across the EU by setting them in Brussels.

The NI increase is a necessary step to starting to fill that budgetary hole - and you must have forgotten that the NI rate that employers pay has gone up as well.

Oh, the additional £350 Million a week for the NHS was supplied in the first post-Brexit budget by Theresa May...

Why so much curiosity as to whether or not someone is invested in a particular share and why they spend so much time on this board?

I don't care and it's pointless asking - they can tell you they are invested when they aren't and vice versa, and you have no way of checking.

It's also up to each individual to do what they want with their spare time - none of our business.

They can also post what they want - as long it's it's not using multiple fake ID's to spam the board with a load of dross and then becoming abusive when called out on it.

Pboo,

If he didn't use multiple ID's to spam the board with nonsense posts, and then hurl abuse at those who dare to point out the numerous flaws in his arguments, then we wouldn't be bothered.

As it is, I for one am more than a little fed up with him appearing and clogging up the board on a regular basis every weekend.

Ian12,
"How long thing's take don't actually bother me to much, many projects don't run on time so why single out Ukog, don't invest in shares if time is a problem for you!"

Indeed, many projects don't run to time - but far more projects do.

Why single out UKOG? Because all their projects are late - every.single.one. - and that has a disastrous effect on the NPV on any project.

The big assumption in the UKOG RNS is the seismic shows a valid target that can be reached from the current wellbore.

If their initial prognosis was so far out that they stopped short of the first target, I feel that this is unlikely to be the case.

If the seismic does show there is a target, the formations that they are drilling are difficult to do directional work in - not just because of the hardness of the rock, but also the tectonic stress regime that is clearly prevalent in the area.

Remember, they already got stuck once and there is a track record in the surrounding fields of wells having to be sidetracked around a lost BHA (and before anyone asks, a sidetrack around a lost BHA is a very different animal to having to directionally drill to another target location).

In that respect, it may well be easier to spud a new well - either from the current well pad, or from a new well pad - both scenarios which create interesting questions about the exact nature of the agreement between AME & UKOG in terms of cost carry.

BTW, in case anyone is wondering, I posted essentially the same comment as soon as they announced they were suspending the Well.

Also, if anyone is wondering, I've been in this exact situation before and have experience of drilling Wells not too far away from Basur, although in a different basin...

There are a number of problems with the technology that are slowly being ironed out.

Tidal power is actually sinusoidal in nature - it's low when the tide is turning and peaks at mid-tide. But at least that is more predictable than wind or PV power.

One of the initial problems (which I think has now been solved) was that the designs could only generate power when the tide was flowing in and not out (or vice versa).

The strength of the structure required to support the turbine was also a problem - the forces involved when basically trying to stop water moving freely are enormous. Indeed, I recall the last major attempt at doing this resulted in the structure being destroyed in just a matter of hours.

There are all sorts of issues with corrosion, cleaning (life will find a way...) and maintenance.

So, I'm pretty sure that it's fundamentally expensive to produce (although will it be as expensive as floating wind at £250/MWhr??).

Scale is another problem. Let's say you are looking to produce 10 GW/hr.

If I've done the Maths correctly, then presuming a current of 1 m/sec, you'd need to harness the power of 7,200,000,000 metric tons of water - and that's presuming 100% efficiency when efficiency is probably down around 25%.

Lets presume that your turbine can 'process' 10 cubic meters of water a second (yes, I know seawater is slightly more than 1, but I can't be bothered to check - besides, it varies around the coast).

So 7,200,000,000 metric tons divided by 10 divided by 60 divided by 60 divided by 24 = 8,333 turbines (at 100% efficiency).

There are other considerations - can't have them in shipping lanes, the bottom has to be flat so eddies don't erode the structure or blades, need good anchoring ground, what would be the effect both upstream and downstream of slowing the movement of that amount of water in terms of deposition of solids, erosion before and after the turbine etc. Effect on the environment (someone will complain about the habitat of the rare lesser spotted fingal crab being affected).

But experimental work is continuing;
https://www.bbc.co.uk/news/uk-scotland-north-east-orkney-shetland-57991351

Lots of things to be overcome in time, which hopefully will allow it to contribute to our energy mix.

Ibug,

Don't forget that Opex cost didn't include the cost of produced water disposal either.

Hi Ocelot,

There was a similar article in The Times about two weeks ago.

Also an article in the 13th November 2021 edition of New Scientist magazine, entitled "Net zero's dirty secret", which is about the demand forecast for Lithium, Cobalt, Nickel, Copper and the Rare Earth Elements which are vital to net zero. Basically demand for critical minerals is set to rise by a factor of six - and the increase in mining to meet that demand simply isn't going to happen.

It also goes into a little detail about how environmentally damaging many of these mines are.

But that's just the point HHAN2.

Despite Adrian and others frequent claims, there is not one of the so-called 'swampies' who has said there is nothing happening at HH with respect to production.

Yup.

And yet the shouty voices on Twitter claim we shouldn't be developing any more fields in the UK, while blaming the current gas price crisis on big, bad oil Companies making excessive profits - not the fact that wind power across Europe was lower than usual in 2021, so more gas had to be used to provide power instead of going into storage.

Not that having full storage would have helped much - that amounts to a couple of weeks at most - the current crisis will last much longer than that - especially if Russia continues to ration gas supplies to Europe and sells to China and Asia instead.

Fun fact, Germany produced more power from Coal than wind during H1 2021.

Which gives the more accurate production figures:

A) OGA data

B) Someone taking tanker photographs and randomly posting them to the Internet

ian12,

As the RNS says, they have permission to complete HH-1 as a dual Portland/Kimm producer.

Even though the pandemic started in March 2020, you clearly forget that they did do some Crane work on the well last year, which we all presumed was so that they could recomplete as a dual producer - but they didn't and have never said why.

HH1AN2,

Let's assume an optimistic 90 bbls/day for 17 weeks = 90 x 7 x 17 = 10,710 bbls of production.

At $90/bbl, that's 10,710 x 90 = $963,900

So already your estimate is 30% out.

You have allowed zero for production costs, water disposal cots, licence fees, overheads, debt servicing etc.

The last figure we had was $15/bbl for production costs, which does NOT include the cost of produced water disposal.

So $15 x 10,710 = $160,650 in production costs, leaving $963,900 - $160,650 = $803,250

We don't have a good figure for water disposal costs, but a ball park figure should be in the $15/bbl range as well, with c. 50 bbls/day water production.

So the cost of water disposal = 50 x $15 x 17 x 7 = $89,250

So we are left with $803,250 - 89,250 = $714,000.

Licence fees are fairly minimal (can't be bothered to actually look them up), but let's say $10k for that period, so we are down to $704,000.

Don't forget that UKOG don't get 100% of production - it's around 86%.

So $704,000 x 0.86 = $605,440.

Now, didn't UKOG promise a certain % of production to the good Residents of Surrey?

Wasn't it around 5%? Let's be conservative and say it was 2 1/2%.

So $704,000 x 0.025 = $17,600.

So we now have $605,440 - 17,600 = $587,840.

SS's salary / shares / pension contributions / bonus appear to be around £750 pd = 750 x $1.35 = $1,012.5 pd

So for that period, 1,012.5 x 7 x 17 = $120,487

That leaves us with $587,840 - 120,487 = $467,352.

How much is their debt servicing cost?

Hmmm, tricky one. I'm going to take a guess at 2% p.a. on their c. £35 Million debt = £228,219 for that period = $308,096

So we are now down to $467,352 - 308,096 = $159,256

And out of that there is the office overheads, consultants salaries, payments to the other BoD members etc.

So UKOG are, at best, just about breaking even with current HH production.

So yes, there will be a placing required to do the surface & downhole conversion work for HH-2z.

HH1AN2,

Don't forget they also need OGA approval to convert HH-2z into a water injector.

13 posts in less than four hours.

You are posting nonsense about HH production figures.

You are posting nonsense about UKOG making money.

You are posting nonsense about a placing not being needed.

You complain that no "greenies" will engage with you, yet you have already started threatening and insulting other posters.

And still you wonder (and complain) why you get tossed off this board?

Please go back to your fire extinguishers - I hope that you are good at that because you certainly know nothing about the oil industry and how it works.

Or basic maths, for that matter.

No, he wasn't.

Once the raw data is acquired, it has to be QA/QC'd, processed (then sometimes reprocessed) before interpretation can even begin.

If we are lucky (not common with UKOG), then primary processing has probably only just finished.

You sound jealous Qwerty.

But no, I'm not ready to hang up my boots yet, even after over 30 yrs in the oil patch....

Pactrol,

True - first introduced by the Labour Govt which instituted the carbon levy - even insisting that Nuclear Power Stations were included even though they don't produce CO2.

Ocelot,

It was the price crash in 2015/6 that we are really suffering the effects of now.

Over $1 Trillion of development projects were cancelled or delayed indefinitely, so production was not being replaced.

Many NS Filed were operating at a loss during this period - something that those calling for a windfall tax conveniently forget.