Member Info for ZYX098

the 1).

Morning Exploration / Mirasol,

I just used an energy conversion of 58 therms = 1 bbl oil and took the price per therm off the Market data page on the BBC Website. But the same limitation about using an average energy value for both the oil and gas applies.

The elephant in the room which many are ignoring is the root cause of the current spike - wind speeds in Europe were lower than normal throughout the year, so Countries were unable to replenish their gas storage facilities as the gas was needed to supply power.

One of the other driving forces behind the current spike also appears to have been LNG cargos and where they went, with many apparently being diverted to China in October / November as Chinese Companies reacted to the Central Govt instruction that they must protect power supplies at all costs - which hasn't stopped there being power cuts in China anyway.

Although we only get about 2% of our Gas from Russia, that Putin can close off the supply to Europe does have an affect, as they have to go elsewhere for gas - which also includes getting more LNG deliveries.

It is interesting the noises Russia are now making about the Ukraine and NATO presence in East Europe, as the Ukraine in particular will become a lot more vulnerable if / when the Nordstream 2 pipeline gets regulatory approval.

By sanctioning the construction in the first place, Merkel effectively threw Ukraine (and East Europe) under the bus, because Russia had no way of providing gas to their main market without going through Ukraine.

But Nordstream 2 means they can hold Ukraine to energy ransom at any time they wish.

You may recall Russia tried that a few years ago, but Ukraine merely siphoned off gas meant for Europe instead - which caused a price spike in the UK as (at the time) we got more of our gas from Russia and we were at the end of the pipeline which was suddenly empty.

With regards to nationalising any industry in the UK - having worked for one (British Gas), which meant we were forced to use another (British Steel) and having to use a third to commute to work (British Rail), any time someone says we should nationalise such-and-such an industry, it takes all my willpower to not instantly slap them into the middle of next week....

While what we have now in some areas is by no means perfect (cough - railways), it is light years better than what we had to endure when most large scale industries were nationalised.

BTW, if you want to see what a modern incarnation of a nationalised industry looks like, I give you Network Rail. Or, as they are commonly known, Notwork Rail. While several franchises were getting it in the neck for poor adherence to time-tables, Network Rail were quietly hiding the fact that they were responsible for some 60% of train delays.

Right, I've wittered on long enough.

I wish you and your families a safe, happy and prosperous 2022 (while hoping that the Mayan chap who calculated the calendar didn't forget to carry

What's going to hurt more is the time and investment needed to make up for the investment in new production that didn't happen during the oil price crash from 2016 - 2019.

It's generally accepted that over $1 Trillion of projects were cancelled or delayed indefinitely.

The industry was just getting back on it's feet when Covid hit and kicked us in the nuts again.

In the meantime, there is no credible estimate that sees oil demand dropping before the late 2030's and even then, demand won't fall off a cliff as many eco-warriors seem to think.

I can see oil hovering in the $90 - $110 range for a considerable period of time, but not much higher than that apart from the odd temporary spike as it tends to be self regulating.

The oil price climbs, the worlds economy slows down and brings the oil price down again.

I've seen some hedge funds have taken out spreads that oil could reach $250/bbl, but I believe that this is just a rank outside gamble that costs them little to put in place.

If oil were to go above $120/bbl for any period of time, the effects on the world economy would be catastrophic.

On the other hand, the UK & Europe are currently paying the equivalent of over $150/bbl for gas and the spot price has reached over $250/bbl in the last couple of weeks.

It appears that I have become the new target for a certain fool and his mate(s), having had 8 posts removed in the last day.

I think I'll wear that as a badge of honour, as clearly the truth hurts them....

Adrian / FOTH / Munrow (this weeks incarnation),

Why do you bother?

You fool nobody.

Every week you come on this board with a different user name, posting nonsense.
You never answer any direct questions, instead spouting the same old accusations about 'deramping' and 'shorters' over and over again, eventually degenerating into personal insults and getting tossed by Admin.

So, seriously, why do you bother?

Ocelot,

Correct, they don't have to retain 100%, they can try and farm down.

But with UKOG's track record and the historical results of drilling in the Loxley area, the chances of them persuading anyone to join in are effectively zero.

Good grief!

A post where Insidious hasn't mentioned 2p/5p??!!

He can't be feeling well...

Instead of posting a dodgy quote from several years ago, why not post what HH is actually producing now?

I'll wait..

I'd scrap the 'golden hello' too.

If you believe the person you are offering the job is the best thing since sliced bread and they believe they can improve the results of the Company, then their first two years salary should be split - cash equivalent to the average UK salary and the rest in shares.

75% of the shares have to be held for a minimum of three years.

So the poor darlings have enough spending money to keep them in red trousers and G&T's, while whether or not they sell the 25% of shares they are allowed to gives an indication of where they feel the share price might be going in the short term.

JustBe - exactly why I have never filtered Ocelot.

While I feel his (or her) boundless optimism is misplaced, it has to be admired, he never makes it personal and does occasionally post some good points.

A lot of people in the oil industry have been warning about this for several years, but we were just called 'fossil fuel apologists'.

The simple fact is that demand for O&G is not going to disappear overnight, or even in the next decade, or the decade after that and investment in new production has just not kept up after the last oil price recession - it was just beginning to recover when Covid came along and shut down many projects.

HM Govt's own forecasts out to 2035 show that UK oil demand will drop by less than 10% and gas demand will be flat in that period.

The demand from eco-warriors for Western Banks & Govts to stop investing in fossil fuel production will, predictably, drive Countries who need the investment into the arms of the Chinese and Russians - neither of which are known for their adherence to the basic principles of HSE (or ESG as the phrase appears to be these days).

This sort of short term virtue signalling will just lead to long term dependence on sources of O&G that are controlled by Countries who have shown in the past that they are very willing to use it as a weapon against the West.

In the meantime, our own indigenous sources of O&G will be starved of funds and the decline curve will be much steeper than previously forecast, thus reducing our energy security, the loss of highly skilled jobs, increasing our balance of payments deficit and increasing CO2 emissions.

Nomlungu; it wasn't free money in the first place - the UK was a nett contributor, so it was always our money..

I thought I'd filtered you too Insidious, and yet...

Adrian,

If you'd read the RNS's, you would know that Basur was halted suddenly because they admitted that they were drilling in the wrong place. You'd also know that the cash raised from the recent confetti shower is fully committed to meeting their obligations in Turkey.

As for HH-2z being 'oven ready' - far from it.

I have posted before (twice) the considerable workscope required to convert HH-2z into a water injector, presuming they get OGA & EA approval.

I challenged you to post a cogent rebuttal to what I was saying, instead of which you chose to bury your head in the sand and resorted to cheap name calling.

So I challenge you again, and await your reasoned, well thought out response with interest.

IBug,

A better perspective might be that the effort to get rid of the BoD attracted more shares committed than voted for any of the AGM resolutions.

So to use the AGM results say that 90+% of shareholders support UKOG, and therefore this message board is wholly unrepresentative of the feelings towards UKOG, would be incorrect.

Adrian,
You stated "I disagree flow rates and maximizing oil recovery go hand in hand in fact."
No, they don't.
Take an example when you are producing an oil leg above a water leg (sound familiar?).
If you maximise the flow rate, that increases the pressure drawdown across the perforations. By doing that, the increased pressure drop encourages water coning to occur, which can lead to early water breakthrough which REDUCES oil flow rates and recovery (sound familiar?).

You also stated "Imo the water reinjector Should vastly improve pressure down hole."
No, it won't. UKOG are only reinjecting produced water. All that will do is slow down the current pressure decline. To increase downhole pressure, they have to inject more than they are producing (i.e more than combined oil & water production).
Basic physics.
And, BTW, that presumes that the injection water goes where they want it to - far from a given in HH.

You stated "It needs people like me to post the positive side of the coun or the bashers on here just flood the board."
It needs people like us (who actually know what they are talking about..) to counter evangelical ramping from the uninformed who makes themselves look like fool(OTH)s by opening their mouths and spouting drivel.

https://www.worldoil.com/news/2021/10/25/frigid-winter-forecast-for-asia-threatens-to-worsen-energy-crisis

This article expands a bit on some snippets that Ocelot posted yesterday;
https://www.worldoil.com/news/2021/10/22/wall-street-projects-a-higher-for-longer-era-for-oil-prices

This article goes into some more detail about the potential problems facing Europe this Winter;
https://www.worldoil.com/news/2021/10/22/europe-faces-possible-energy-blockades-as-winter-gas-crisis-worsens

Generally speaking, under NORMAL circumstances I don't think the last paragraph is correct.

For example, we don't get any gas from the EU (our imports are from Norway and Qatar, with around 2% from Russia) and what electricity we do import can easily be replaced by gas or coal fired power stations.

However, all bets are off if the jet stream stalls and a regional high sits over Europe (including the UK) for several days.
In that scenario (which has happened several times in the recent past), wind power production will drop to negligible levels and Europe (again, including the UK) as a whole will really struggle to meet electricity demand.

If that happens, then the most vulnerable people are in Eastern Europe (because it gets friggin' COLD) and the Channel Islands - because the French Govt would love to use any excuse to cut off power to the Channel Islands, irrespective of what the agreement between the EU and the UK says..

Hi Ocelot,

I don't know.

It is a distinct possibility, as US Shale is not coming back and other sources generally take 2 - 4 years to start ramping up, of which there isn't much sign yet.

The real problem with high oil prices is it tends to push the world economy into recession - this is why in the past there has usually been a boom & bust cycle as far as oil goes in that a supply glut pushes the price down, the world economy expands due to cheap energy, thus driving up demand for oil, which increases the oil price and so on.

With recovery weak due to Covid and logistics issues (i.e. shipping, which it is thought will take another 9 - 12 months to get sorted out), high energy costs may be enough to stop any recovery dead in it's tracks - which will obviously not be good for any number of reasons.

Anyway, a bit simplistic, but you get the drift.

The true cost of renewable energy is only just beginning to be recognised (never mind the shortage of key materials to make it happen), so as the developing world expands, they are going to need more energy and that will not come from renewables.

It will have to come from coal, oil or gas.

Coal is really only acceptable in conjunction with CCUS technology, which apparently is still in the early stages of development w.r.t. coal fired power stations (it also is expensive and takes c. 15% of the energy output of the power station to run), so that leaves oil or gas - of which, as we have seen, there is not quite enough to go around at the moment.

As far as I know, it didn't get mentioned in the main press but OPEC actually didn't meet their own quota last month - they fell about 750k BOPD short.

Don't forget that in a lot of developing Countries power is provided by banks of generators, rather than 'conventional' power stations. In many cases they are dual fuel (can use Gas or diesel) and that is why - unusually - the high gas price has had a knock on effect on the oil price as it is now cheaper for them to run on diesel.

So there are more than a few reasons why the oil price could remain high for at least a couple of years, plus one big reason why it might drop.

My personal feeling is that we will see $100/bbl oil in the next six weeks or so, and that it will last until perhaps Feb next year.

If one of Europe, Asia or North America has a colder than normal Winter, then gas (and therefore oil) prices will remain high until Q3 next year.

If two of them have a cold Winter, I think all bets are off on what the oil & gas prices will do and how long for - while OPEC and Russia will be laughing all the way to the bank.

If all three of them have a cold Winter.... I really don't want to think about the effects of that.....

All credible forecasts show that peak oil will not occur until the mid 2030's, and any decline will be vey slow and spread out over several decades.

HM Govt's own predictions for the UK out to 2035 show gas demand to be flat and oil consumption to drop by less than 10%.

It's only the eco-warriors who mistakenly think that if we all switch to EV's, all will be well with the World and oil consumption will fall off a cliff.

And if you doubt that, look at the reaction of the West to the current oil price increase - they have collectively gone on bended knee to OPEC and Russia (both paragons of virtue...) to increase production.

Awww, geee, thanks (blushes furiously...)

BTW, in case anyone missed it the world price of coal is now at a record high, so it's apparently not just the oil industry that is struggling to meet demand.

IMHO, the only way we (i.e. the human race) are going to get close to meeting climate change goals is to switch from battery powered EV's to those using hydrogen fuel cells, combined with massively increasing investment in nuclear power and CCUS technology.