Uk Oil & Gas Share Discussion Threads

[thegrumpster] 03/3/2016 18:18

At least it isn't "sludge" thinned with condensate........refiners should be pleased.


17 Feb RNS

".....light, 40-degree API, sweet oil has continued to flow naturally to surface from an 80-foot zone within the Lower Kimmeridge limestone...."

"..... flow consisted of dry oil with zero water."

May have been posted.



"Sunday, January 17, 2016
The great condensate con: Is the oil glut just about oil?

My favorite Texas oilman Jeffrey Brown is at it again. In a recent email he's pointing out to everyone who will listen that the supposed oversupply of crude oil isn't quite what it seems. Yes, there is a large overhang of excess oil in the market. But how much of that oversupply is honest-to-god oil and how much is so-called lease condensate which gets carelessly lumped in with crude oil? And, why is this important to understanding the true state of world oil supplies?

In order to answer these questions we need to get some preliminaries out of the way.

Lease condensate consists of very light hydrocarbons which condense from gaseous into liquid form when they leave the high pressure of oil reservoirs and exit through the top of an oil well. This condensate is less dense than oil and can interfere with optimal refining if too much is mixed with actual crude oil. The oil industry's own engineers classify oil as hydrocarbons having an API gravity of less than 45--the higher the number, the lower the density and the "lighter" the substance. Lease condensate is defined as hydrocarbons having an API gravity between 45 and 70. (For a good discussion about condensates and their place in the marketplace, read "Neither Fish nor Fowl – Condensates Muscle in on NGL and Crude Markets.")

Refiners are already complaining that so-called "blended crudes" contain too much lease condensate, and they are seeking out better crudes straight from the wellhead. Brown has dubbed all of this the great condensate con.

Brown points out that U.S. net crude oil imports for December 2015 grew from the previous December, according to the U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy. U.S. statistics for crude oil imports include condensate, but don't break out condensate separately. Brown believes that with America already awash in condensate, almost all of those imports must have been crude oil proper.

Brown asks, "Why would refiners continue to import large--and increasing--volumes of actual crude oil, if they didn’t have to--even as we saw a huge build in [U.S.] C+C [crude oil plus condensate] inventories?"

Part of the answer is that U.S. production of crude oil has been declining since mid-2015. But another part of the answer is that what the EIA calls crude oil is actually crude plus lease condensate. With huge new amounts of lease condensate coming from America's condensate-rich tight oil fields--the ones tapped by hydraulic fracturing or fracking--the United States isn't producing quite as much actual crude oil as the raw numbers would lead us to believe. This EIA chart breaking down the API gravity of U.S. crude production supports this view.

Exactly how much of America's and the world's presumed crude oil production is actually condensate remains a mystery. The data just aren't sufficient to separate condensate production from crude oil in most instances.

Brown explains: "My premise is that U.S. (and probably global) refiners hit in late 2014 the upper limit of the volume of condensate that they could process" and still maintain the product mix they want to produce. That would imply that condensate inventories have been building faster than crude inventories and that the condensate is looking for an outlet.

That outlet has been in blended crudes, that is heavier crude oil that is blended with condensates to make it lighter and therefore something that fits the definition of light crude. Light crude is generally easier to refine and thus more valuable.

Trouble is, the blends lack the characteristics of nonblended crudes of comparable density (that is, the same API gravity), and refiners are discovering to their chagrin that the mix of products they can get out of blended crudes isn't what they expect.

So, now we can try to answer our questions. Brown believes that worldwide production of condensate "accounts for virtually all of the post-2005 increase in C+C [crude plus condensate] production." What this implies is that almost all of the 4 million-barrel-per-day increase in world "oil" production from 2005 through 2014 may actually be lease condensate. And that would mean crude oil production proper has been nearly flat during this period--a conjecture supported by record and near record average daily prices for crude oil from 2011 through 2014. Only when demand softened in late 2014 did prices begin to drop.

Here it is worth mentioning that when oil companies talk about the price of oil, they are referring to the price quoted on popular futures exchanges--prices which reflect only the price of crude oil itself. The exchanges do not allow other products such as condensates to be mixed with the oil that is delivered to holders of exchange contracts. But when oil companies (and governments) talk about oil supply, they include all sorts of things that cannot be sold as oil on the world market including biofuels, refinery gains and natural gas plant liquids as well as lease condensate. Which leads to a simple rule coined by Brown: If what you're selling cannot be sold on the world market as crude oil, then it's not crude oil.

The glut that developed in 2015 may ultimately be tied to some increases in actual, honest-to-god crude oil production. The accepted story from 2005 through 2014 has been that crude oil production has been growing, albeit at a significantly slower rate than the previous nine-year period--15.7 percent from 1996 through 2005 versus 5.4 percent from 2005 through 2014 according to the EIA. If Brown is right, we have all been victims of the great condensate con which has lulled the world into a sense of complacency with regard to actual oil supplies--supplies he believes have been barely growing or stagnant since 2005.

"Oil traders are acting on fundamentally flawed data," Brown told me by phone. Often a contrarian, Brown added: "The time to invest is when there's blood in the streets. And, there's blood in the streets."

He explained: "Who of us in January of 2014 believed that prices would be below $30 in January of 2016? If the conventional wisdom was wrong in 2014, maybe it's similarly wrong in 2016" that prices will remain low for a long time.

Brown points out that it took trillions of dollars of investment from 2005 through today just to maintain what he believes is almost flat production in oil. With oil companies slashing exploration budgets in the face of low oil prices and production declining at an estimated 4.5 and 6.7 percent per year for existing wells worldwide, a recovery in oil demand might push oil prices much higher very quickly.

That possibility is being obscured by the supposed rise in crude oil production in recent years that may just turn out to be an artifact of the great condensate con.

Kurt Cobb"

[clickon] 03/3/2016 18:07

I've bought on occasions and seen it reported late. I bought some UKOG recently and it came up as a red mmbuy when it was a clear mm sell to me. Not the first time that's happened!

[clickon] 03/3/2016 17:57

It might look like a late trade it was actually at 8.33 this morning, just reported late

[woggles] 03/3/2016 17:21

There's the big late trade again 9,127,132 @ 2.75p

[ibug] 03/3/2016 16:39

I recall that TW said QPP would drop to 0p the next day, a Thursday QPP shot up at the open to 245p and there are many more TW got very wrong----Shareflops.con have a terrible reputation but they have an influence,,,albeit very negative all the time.

[forwood] 03/3/2016 16:33

Some folk are scared enough by this incessant deramping of a placing that they're selling. How misguided is that? Last time they raised 5m, the share price actually went up! Although I do not beleive that one is imminent, it's not that bad a deal.

[ibug] 03/3/2016 16:26

READ THIS AND UNDERSTAND---NO PLACING FOLKS


David Lenigas ‏@DavidLenigas Mar 1

I think bloggers saying UKOG doing a placing are blowing smoke out their backsides!

[ibug] 03/3/2016 16:22

Whilst observing the site from a distance there looks to be water tanker movements; this suggests that zone 2 has been plugged and zone 1 perforated.

Once the flood water has been removed then flow testing proper of Zone 1 will begin followed by news which can be considered to be imminent.

[ibug] 03/3/2016 16:21

They should release these reports fairly soon:

a) Zone 1 flow results

b) Consolidated well flow results with wellhead pressure measurements.

c) Xodus analysis

d) E&Y valuation analysis.


UKOG HAS EXCELLENT PLANS imo:


I think people should understand that a horizontal well generally results in quite a significant increase in flow rate and recovery, the rule of thumb as a minimum, it’s about a 3 times multiplier on the flow rate that you get from a vertical well so I think for us the future of this year is going to be heads down, doing a lot of field development planning and submitting plans to local authorities and the other regulatory bodies in the UK.

[ibug] 03/3/2016 16:14

wELL SAID mm HAVING BOTH PUT UP WITH THAT LOT FOR MONTHS.

[moneymunch] 03/3/2016 15:59

Lol, or maybe this week, now at £37.30......Onwards and Up!!! ;-)))

[moneymunch] 03/3/2016 15:50

Brent has just made a dash from $36.4 to $37 plus in the last half hour......$40 plus this month imho....gla ;-)

[ibug] 03/3/2016 14:56

FORWOOD---NEVER MIND ---- HAD MY FUN at WD'S EXPENSE....LOL @ HIS THREAD haha

[forwood] 03/3/2016 14:34

which particular rubbish was that?

[ibug] 03/3/2016 14:23

Consolidated well flow results may yield 2000 bopd+....whatever they are it will show very interesting results for investors.

Forwood try deleting that rubbish please.

[forwood] 03/3/2016 14:23

Posted on wetdreams new thread:

You accuse me of being a baby and only on the rampers side. I'm actually a near 64 year old early retired from a distinguished career as a Big 6 consultant, Health service chairman and charity founder. I have been investing and trading shares for over 25 years.

What I dislike intensely is people who lie and post false information to try to influence the share price either up or down. I have moderated you because you have repeated claims that are undeniably aimed at creating a false impression.

Your post above for instance was posted several days ago before the results on the 2nd flow test. It contains a number of falsehoods including this one:

'News from the site is being tightly managed but we think the Upper Kimmeridge will not flow at Lower Kimmeridge levels. Educated guess possibly up to 150bopd. We did hear that 80-100 bopd had flowed but could not confirm this. Looks to me like they are trying to get the Upper Kimmeridge up as high as possible to keep the good news story going, hence the delay in news. Once they announce phase2 and phase3 they will seek to place.'

Flow was actually well over 800bd. There has been no placing. There have been some warrants cashed which have raised a little money but they haven't affected the share price one bit.

The clear reason why I think a placing is extremely unlikely at the present time is simply that they already raised sufficient cash for present needs before the flow tests, when the share price was not much higher than it is now. They have £4.5m in cash and a line of credit that is $10m. More than enough for the next year or more.

Finally, your little outburst and own petulant request that I ban you was perhaps the easiest decision I have made today, alongside having soup for lunch!

You were given a long leash to post your views and far from only moderating detractors and trolls, I have on occasion also moderated repeated ramps. You only have yourself to blame.

[ibug] 03/3/2016 14:22

They should release:

a) Zone 1 flow results

b) Consolidated well flow results with wellhead pressure measurements.

c) Xodus analysis

d) E&Y valuation analysis.

[datait] 03/3/2016 14:20

One think for sure is these Tankers are consistantly coming and going so I neednt worry at all.

[datait] 03/3/2016 14:19

pmsl cant see there being a placing for another few months yet they will want to get more news out and then woooosh the share price rockets then they might and only might if not taken over by then.

What further news do you think we shall get first ?

[c31161] 03/3/2016 14:12

If some believe there will be a placing they should short it, easy money, if anyone knew there was to be a placing they would exploit it not share it