Iog Share Discussion Threads

[xxnjr] 30/8/2022 13:59

just been reading p162 of


"The development plan for the Blythe field consists of drilling a trilateral production well targeting the A4 reservoir in the anticlinal area mapped to the North East of the current well control. The planned well will intersect the Weissliegend, A1, A2, A3 and, most importantly, the A4 reservoir horizons. Two additional, 1000 ft long side laterals are planned to encounter the Weissliegend to maximise reservoir coverage. In order to allow the accurate placement of this well into the better quality, A4 layer of the Rotliegend the Operator plans to drill a pilot hole to confirm the Top Rotliegend pick and finalise the profile of the production boreholes. The current development well plan and P50 resource estimates are based on encountering the crest of the A4 reservoir mapped from the O , Pre-STM generated Top Rotliegend map (Figure 4.5).

The initial plan is to drill the main bore horizontally in the A4 layer 100 ft above the GWC. However, when this trajectory was inserted into the P90 and P10 GIIP models, in the case of the P90 model the A4 layer was not penetrated and in the case of the P10 model the crest is further to the south east such that the trajectory stays in the A3 layer.

In mitigation of this outcome the landing point of the horizontal section has been adjusted downwards to be 50 ft above the GWC. The effect of this is to ensure the well encounters the crest of the A4 layer in the P90 map and the flank of the A4 in the P10 map. Whilst these cases produce more water than the base case they both maintain the deliverability from the expected higher A4 quality reservoir and so can reach and maintain the desired 30 MMscf/day initial rate. The ability to adjust the positioning of the horizontal well is vital and, therefore, a pilot hole is considered essential for the success of the project."

Not sure if the above was the actual development as carried out. Maybe just a horizontal without the multi-lateral bits? But anyway, afaics IOG hasn't bothered drilling a pilot well although they may have a reason for not doing so (other than cost).

[bountyhunter] 30/8/2022 12:13

Exactly DH re the "high salinity fluids".

I'd like to see their risk assessment - probably a cut & paste job with a few customisations lol!

What surprises me as a non oilman is that they don't seem to be able to measure the water content at the well heads?
Also thinking outside the box I am assuming that the gas pressure inside the pipeline exceeds that of the sea water pressure at the pipeline depth and that anyway the high salinity of the fluids rules out possible sea water ingress? Any residual sea water in the re-used pipeline would surely have been flushed by now and in any case decreasing. Which leaves the supposition that the water is coming from at least one of the wells. The sooner they get the source identified the better, as I said previously it can't be rocket science, hurricane knew which well the water was prevalent in much quicker that this crowd. Nobody mention perch btw!

[dunderheed] 30/8/2022 11:27

Mitigation plans should be long done prior to the issue occurring in the relevant risk assessment BH. Especially for the fluid losses etc.
Re salinity - is it water cut is it "other" "saline" ingress - who knows (?!) - there should also be plans with regard to the mitigation of these issues as again it is a known "unknown" (or possibly a known "known"). Let's just hope it isn't (excessive) "O"WC already as that will have limited mitigation?
Let's hope we hear something soon.
All IMHO and best of luck all.

[bountyhunter] 30/8/2022 11:05

Added a few more O&G share prices to the header.
Nothing much looks likely to happen here until the next RNS when we will hopefully get some clarification of the issues and a plan to resolve / mitigate them.

[bountyhunter] 30/8/2022 07:50

Coal, no thanks, spammed everywhere!

[aimmafia] 30/8/2022 07:14

If you havent looked at #CGO then you really should, 200-300 percent upside very near termCurrent Share Price: 7.5pTarget Share Price: 30p in Q4 when 2nd offtake agreement lands and we are earning $10million a year from 1st offtake.Offtake 1: 10,000 tonnes per month of washed coking coalSale Price: $120 Per TonneRevenue: $14.4 MillionEBITDA: $9.6 MillionReserves: 1.6 Billion tonnes Met Coal / Thermal Coal ( company can run for centuries )Offtake 2: in discussionAlso CGO has its Initial Modular coke Battery due to be installed in Q4 which will create even more revenue and expecting another offtake agreement to land for this also! Production will be up to 40,000 tonnes per year of raw coke with huge margins creating the below figures but I am expecting coke prices to go up even further.Modular coke battery will produce once installedMargin: $300 per tonneEbitda 2022 with module coke battery- $19.5 millionPE of 5: $100m Market Cap aprxPE of 7: $140m Market Cap aprxIn 2023 a further large battery will be installed and adding a further $45million Ebitda per year creating rough market caps of:PE5 $285 million Market Cap 2023PE7 $399 million Market Cap 2023This is obviously excluding value of gold asset and also hugely increased coking coal and coke prices.

[maxidi] 29/8/2022 13:20

Glad I sold on the morning of the 25th or I would have been down "BIG TIME". As it is now, I can take the loss without having a breakdown!!! :o(

[xxnjr] 29/8/2022 13:19

NSTA Production Data for months 3/4/5/6 doesn't shed any light. Both field profiles basically mirroring each other.

Blythe
mmscfd: 4,13,10,24
cond, tonnes: 0, 617, 375, 1319

Elgood
mmscfd: 16,25,11,21
cond, tonnes: 0, 2358, 890, 2552

Gross Total
mmscfd: 20,38,21,45
cond, tonnes: 0, 2975, 1265, 3871



Good news there is about 5,500 tonnes of unsold condensate somewhere. Worth about $4.25m gross?

[bountyhunter] 29/8/2022 12:59

Yes that's a stretch I know but given I'm left holding the baby here must try to be optimistic! Even if they can narrow down the water to just one well which shouldn't take rocket science I can see the shareprice recovering given current and future gas prices, if they don't f'up Southwark that is!!!!!

[dunderheed] 29/8/2022 12:03

"Restore credibility", wow.

[bountyhunter] 29/8/2022 10:54

Most important to establish where it's coming from, it's just speculation that they have a pretty good idea already with this crew. I would hope they have some idea of the overall amounts by measuring water received at Bacton.

One thing is for sure, management need to fast-track resolution of this issue or at the very least keep shareholders updated with progress in order to restore credibility and reverse the shareprice decline.

[sigma3333] 29/8/2022 10:52

Pretty good might not be good enough for AH. As I said the unknown is how much water. Hopefully the rates are small.
siggy

[bountyhunter] 29/8/2022 10:46

>> The engineers will have a pretty good idea where the water is coming from - from pressure data & 12 ion water analyses.

One would have hoped so by now but if that is the case why didn't they tell us in the recent RNS?

[sigma3333] 29/8/2022 10:03

Melody
High salinity fluids (MEG/water) being received onshore - Blythe and Elgood wells are being produced individually for periods to establish the source.

In the absence of any more data it looks like either the water is coming directly from the producing formation (suggesting a shallower oil-water-contact or a high permeabilty conduit - e.g. fracture into waterleg) or the cement has failed across the shallower formations. If the former they could choke back the well or just live with it or trial a water shutoff (plug/gel cement squeeze etc).

If a failed cement bond across the shallower formation then options are limited. What we do not know is how much water is being produced. The engineers will have a pretty good idea where the water is coming from - from pressure data & 12 ion water analyses.

The well closures are probably for confirmation. Just another day in the gas patch

siggy

[xxnjr] 28/8/2022 22:34

What surprises is there appears to be no means of measuring the water cut at well heads or on the production platform. Is that standard practise? Do the physics make sensing impossible? Not knowing means alternate phased shut ins of both fields to get the answer. Given it has taken several months from initial production for the aqueous liquids to reach Bacton..... How long will it take an observed variation in water volume/salinity to show up at Bacton following a field shut in?

[bountyhunter] 28/8/2022 13:12

My concern is that we will now get a radio silence until possibly Christmas when I can see it now, "due to technical issues beyond our control Southwark is delayed until Q1"!
I hope I'm wrong and remain invested here as the share price imo is at a very low level considering the latest only modestly reduced production guidance (given the issues) and thanks to the unbelievably high current and forward gas prices. Any good news on a resolution of the water issue will no doubt result in a strong rally but I won't hold my breath then perhaps I will be pleasantly surprised.

[slicethepie] 28/8/2022 12:11

I can't wait to read their defence document !

[dunderheed] 28/8/2022 10:56

Don't agree wskill - you think because of an awful fluke about high gas prices it is ok to accept "poor IOG management" and just move on?

[dunderheed] 28/8/2022 10:53

hpcg - again wtgr it will (should ,lol) have been highlighted on well risk list with mitigations.
Did you not see my earlier post in reply to you highlighting this "issue"?
This is a known - they have alluded to it themselves (in RNS, lol) so why are we suffering from what only looks like poor planning?!

How many other (quite frankly ridiculous avoidable) f-ups, have there been, that we do not know about, that create (all these) adverse budget variances.

It "looks" like well services f up AND then IOG "management" f up for not considering this a risk and challenging? They must have realised after the scouring f up they are weak in this regard - I hope they acted then - surely?!

As ever - all IMHO and DYOR all - I continue to shake my head in disbelief.

[wskill] 28/8/2022 10:50

With a market cap of only £154 m and gas at £6 poor IOG management matters little at the end of the day just get Southwark online .

The Southwark west well only needs fracking why not get it into production if the rig is idle anyway and come back to the East drill later,Yes it will cost more but payback will be fast with present prices.

[hpcg] 28/8/2022 09:20

anley - great link to Offshore Mag, thanks.

melody- my knowledge at the production wellhead doesn't extend sufficiently to this area. From my reading of the article it is not a done deal that it is water cut from one of the reservoirs. So right now we can't say what the mitigation will be, but a pre-processing stage at Bacton is alluded to by both IOG and the article. This would put the run rate cost of production up. Obviously it will cost money to build, and time to build, but with gas prices this high you just pay to have it expedited. Mind you I would have thought there was old kit knocking around the British Isles somewhere, and certainly the world, though I'm not sure if that is practical or done much; the oil industry loves bespoke solutions.

The article is much more precise on Southwark where they have been running out of mud and the rig is idled. This didn't occur to me and is pretty shocking if it happens more than once. Though that said I am ignorant of the supply chain for drilling fluids, their availability costs etc.

[bountyhunter] 27/8/2022 22:12

1) No.
2) Yes.
3) Hopefully.
4) That's the problem! We just don't know at this stage.

[melody9999] 27/8/2022 19:34

I note the headline of the offshore mag article 'Teething issues'

Is there anyone with more technical knowledge / experience than me that can confirm these issues are temporary. Are there cases elsewhere where salinity has been not solvable? Or is this just a case of identifying the source and then taking action to mitigate?

Is it a case of how long it takes to fix, or a case of whether it can be fixed?

[bountyhunter] 27/8/2022 11:34

No neither do I, just greedy at the expense of shareholders through recurrent and overly generous dilution rewarding themselves for poor performance on the dips, hence L for LTIP! I didn't want to spell it out in case they get any crazy ideas while the price is at this deflated level. ;-)

[dunderheed] 27/8/2022 11:26

Well yes but I don't think they are that "stupid".