Uk Oil & Gas Share Discussion Threads

[datait] 12/9/2018 12:55

It looks to me the Government is getting involve and making sure UKOG gets the backing it needs.

It's about time. PM making sure the country gets what it needs.

[25wbh] 12/9/2018 12:53

It was very brief Gismo , a labour MP brought up a question re fracking etc and asked the PM if she still held her previous views.(what ever those were)
She replied that all councils decisions can be appealed against and all will then be reviewed by government if reqired

[whattheduce] 12/9/2018 12:47

The country needs a proper functioning AIM market first!

[gismo] 12/9/2018 12:41

Good find 25, thanks for that

[25wbh] 12/9/2018 12:35

OIl /fracking and exploration /and locals councils decisions. came up in todays "Prime Ministers Question" time,
The PM said that all appeals against councils decisions will attract Government scrutiny

She made it quite clear that local councils can be overruled
The country needs diversified energy supplies

[hans christian andersen] 12/9/2018 12:28

And yes. It really is that boring. If I get 5 thumbs up I will edit it down to a hyperlink.

[hans christian andersen] 12/9/2018 12:26

Oil and gas shares are event-driven trading. Here are the key triggers for putting pounds into petroleum

London's oil and gas sectors presents investors with a rotation of opportunities to take risks in return for rewards - here's a comprehensive look at the possible trading catalysts oil and gas operations Exploration well drilling is arguably the most significant single value trigger Unless you’re simply queued in behind the pension funds and unit trust managers picking up quarterly dividends from BP and Shell, the preferred way to play the oil and gas is event-driven trading.

The sector offers a fairly well-defined chain of tradable events as successful projects transform from their unexplored beginnings into producing and profitable fields.

For brave investors, there are several major value-adding opportunities to take risks in return for rewards along the way.

Inherently, every risky value catalyst has the opposite potential - to leave speculators out of pocket.

In the oil and gas sector, success is far from guaranteed, but, well-timed investments in the right companies nonetheless open up significant opportunities for capital growth.

Small but often ambitious beginnings
Most exploration projects essentially start with a big idea and some form of unchartered territory.

All the ‘easy’ discoveries have supposedly all been made. The task of finding tomorrow’s oil reserves most often than not falls to small exploration firms run directly by teams of geologists. They are set-up to risk their very existence in the pursuit of new discoveries.

These hardy explorers often look where the larger companies don't, or won't. They take land positions in areas either discarded by ‘big oil’ or entirely untested or operationally riskier frontier areas.

New projects are typically picked up at a low cost or are awarded by government agencies in return for investment commitments designed to advance the localised oil and gas industry.

This approach essentially outsources the nascent phases of the oil industry for unproven jurisdictions. It creates activity and interest where the blue-chips would have none.

In more mature provinces, it provides stimulus to reinvigorate activity. For example, in the North Sea, the UK’s 30th Offshore Licensing round saw 123 exploration areas handed to a total of 61 oil companies which promised to carry out specific work programmes.

Seismic, desktop evaluation and modelling
With exploration land now in the bag, explorers move on to preliminary exploration.

Frequently, the first step in exploring for oil and gas is through seismic exploration programmes.

Simplifying what is a complex technique, the process allows scientists to get a picture of sub-surface geology. Explosives are fired in specified positions, resulting movements across the ground are captured in the form of seismic data. And, because the pulse of energy moves differently through the different strata below ground, analysis of the data can be used to indicate potential geological features.

The data is pored over by experts, and, is used to model exploration prospects.

Seismic programmes come in two forms: 2D (meaning two-dimensional), which captures data along straight lines, and the more advanced and more expensive 3D seismic. Typically, unless other information is known about the area, the latter is needed if a well is to follow.

Other ‘geotechnical’ studies can also be undertaken for projects at this pre-drill phase.

Prospect inventories & resource estimation
With seismic data evidently providing a degree of de-risking, (hopefully) backing up the initial exploration concept, the project is now at a point where the company can start giving the market an idea of what the company thinks it might have.

This is, often, the stage where a broader investor audience starts to pay more attention.

Companies will often begin giving investors information about specific potential targets; they may even give indicative ‘in-house̵7; estimate of scale.

Be warned, these are highly speculative estimates at best. Nothing has been ‘discovered217; yet, and, the millions or billions of barrels of crude estimated to exist below the surface have a habit of disappearing quickly if future exploration programmes don’t work out.

Third-party estimates carry more credibility, albeit they are still (and unavoidably) conceptual.

Explorers will hire industry consultants to analyse project data, inspect or create their own models and come to their own estimates of the project.

This is a crucial step for what comes next. It rubber stamps the prospective resources and gives outsiders more confidence in the project’s potential.

Funding
Nobody gets this far without spending money, and, frankly, a capital raise is always a possibility for exploration stocks.

Nonetheless, at this point, we’re reaching the thicker end of the wedge.

Budgets of just a couple of million dollars can be stretched through the preliminary exploration phases, especially if the project comes with pre-existing data or insight.

Drilling a well will usually cost a multiple of that. The rule of thumb is offshore drilling is more expensive than offshore exploration. The shallow wells of Texas might come in at a couple of million dollars a pop, while at the height of the last boom, deep water rates were around US$1mln a day. Today? Well, it might cost anywhere between US$20mln and US$60mln probe beneath the waves. That's cheaper than it used to be, but it's still a big boy's play.

Sometimes a junior can get creative to cut out some costs. For example, old wells can be re-opened to test new exploration targets or, alternatively, novel partnership deals can be done with drill rig operators.

But, most successful early-stage explorers will reach a point where they’ll have to find the budget to drill new wells.

Securing funding can be a positive or a negative for the share price. On one hand, it creates the wherewithal to drill a possible discovery well, the biggest single value catalyst of them all. But, it can also introduce substantial equity dilution.

The threat of dilution is among the reasons smaller explorers will look to strike partnerships with more established operators, trading off project equity in return for funding commitments.

Whilst ‘farm-out̵7; deal-making can be valuable, protracted negotiations can sometimes see projects become frozen in time.

Exploration drilling
Arguably, this is the most straightforward part of the whole project - from an investor’s point of view at least. Obviously, there’s a great deal of engineering, project management and operations work involved.

But, for investors, the process can be boiled down to a simple process. A hole is drilled down into the ground until it reaches the targeted depth.

The hope is that everything has gone to plan and the reservoir is present as the geologists predicted.

If the hydrocarbons are found in sufficient volume, if the reservoir is viable and if the oil or gas flows to surface … in all likelihood, the shares will be off to the races. If one or all fail to materialise, expect to see an equally sharp fall in the share price.

Proving up with appraisal drilling
A discovery well proves the hydrocarbons are there and are viable; further appraisal wells are usually needed to confirm the extent of the discovery.

Ongoing programmes are about fact-finding for the planning of field development.

Exploration and appraisal data also firms up the pre-drill models and resources estimates.

All in all, it can be a phase of significant value creation.

Project financing
Assuming the project has continued to achieve success over success, it will reach a point where the oil resources have been suitably proven / de-risked, that operationally attentions will turn toward the major engineering undertaking that is field development.

Here, the capital requirements are now much more substantial.

Onshore, proximity to existing infrastructure and end markets can make things easier and cheaper.

But, offshore; well this is where projects become very expensive.

Capital requirements for North Sea field developments (with only a few wells) will cost developers hundreds of millions of dollars.

Deep-water projects can cost substantially more than that, and, major ‘world class’ frontier projects can easily run into the billions.

By this point, all other things being equal, what was a tiny exploration team has most likely grown substantially. The business itself is now probably worth anywhere between £300mln to £1bn, depending on the size of its undeveloped resource.

Even so, the company will need to secure some form of project finance.

Traditionally, it would come mostly via the issue of debt financing, supplemented with some more shareholder equity for good measure.

Alternatively, it could come in the form of another farm-out, selling more project equity for development capital.

Once the funds and the project planning are together, the discovery reaches project sanction.

Field development: the slow-burn to real value creation
Getting the green light to take a project into development is undoubtedly an exciting catalyst that will give most stocks a good lift, but, it also puts into motion what usually ends up being a quieter phase for investors.

Although the company and its operational teams have never been busier, the stock market speculators that have backed management’s every move to this point are now running out of opportunities for immediate upside.

Development work, spanning at least a 12-18 month offshore, brings the project to ‘first oil’ and will establish revenue generating production.

It is a watershed moment for the company, it marks an undeniable and value-creating milestone.

But, it also represents something significant for a certain kind of investor.

Valuations of the company become progressively less about potential and what could be.

The premise for investment and the purpose of holding shares is changing. It is now about the material facts of a production business: it is about output volumes, sales prices, margins and cash flow.

And, importantly, investors are now eyeing the pace at which that project financing debt can be repaid so that they can start milking dividends.

Congratulations, the dynamic exploration minnow is now an income paying buy-to-hold portfolio share!

Exit or evolution
The evolution of stock market-listed companies is, of course, never so simple. This linear narrative suits this author’s purpose. In reality, there are a great number of divergent moments and there the potential pitfalls along the way are plentiful.

Even if a company was so successful that they could achieve each of the above milestones so effortlessly, in the competitive and fast-moving oil and gas sector, good projects are always sought after.

That may come in the form of a big money premium cash takeover, although recent history suggests it may be more complicated than that.

Perhaps, a farm-out partner takes up a large working majority of the project and the small-cap explorer becomes the minority passenger, towed along for the remainder of the project's lifespan.

Quality assets have, meanwhile, been lost to creditors because farm-out transactions never emerged (go ask any Xcite Energy investor about such pitfalls).

At some point or another, the company or the project is likely to become the subject of some form of merger and acquisition activity or consolidation.

So there it is, in a nutshell, the A-Z, of oil exploration and development. In the next instalment, we'll get into the real nitty gritty of oil investment.Oil and gas shares are event-driven trading. Here are the key triggers for putting pounds into petroleum

London's oil and gas sectors presents investors with a rotation of opportunities to take risks in return for rewards - here's a comprehensive look at the possible trading catalysts oil and gas operations Exploration well drilling is arguably the most significant single value trigger Unless you’re simply queued in behind the pension funds and unit trust managers picking up quarterly dividends from BP and Shell, the preferred way to play the oil and gas is event-driven trading.

The sector offers a fairly well-defined chain of tradable events as successful projects transform from their unexplored beginnings into producing and profitable fields.

For brave investors, there are several major value-adding opportunities to take risks in return for rewards along the way.

Inherently, every risky value catalyst has the opposite potential - to leave speculators out of pocket.

In the oil and gas sector, success is far from guaranteed, but, well-timed investments in the right companies nonetheless open up significant opportunities for capital growth.

Small but often ambitious beginnings
Most exploration projects essentially start with a big idea and some form of unchartered territory.

All the ‘easy’ discoveries have supposedly all been made. The task of finding tomorrow’s oil reserves most often than not falls to small exploration firms run directly by teams of geologists. They are set-up to risk their very existence in the pursuit of new discoveries.

These hardy explorers often look where the larger companies don't, or won't. They take land positions in areas either discarded by ‘big oil’ or entirely untested or operationally riskier frontier areas.

New projects are typically picked up at a low cost or are awarded by government agencies in return for investment commitments designed to advance the localised oil and gas industry.

This approach essentially outsources the nascent phases of the oil industry for unproven jurisdictions. It creates activity and interest where the blue-chips would have none.

In more mature provinces, it provides stimulus to reinvigorate activity. For example, in the North Sea, the UK’s 30th Offshore Licensing round saw 123 exploration areas handed to a total of 61 oil companies which promised to carry out specific work programmes.

Seismic, desktop evaluation and modelling
With exploration land now in the bag, explorers move on to preliminary exploration.

Frequently, the first step in exploring for oil and gas is through seismic exploration programmes.

Simplifying what is a complex technique, the process allows scientists to get a picture of sub-surface geology. Explosives are fired in specified positions, resulting movements across the ground are captured in the form of seismic data. And, because the pulse of energy moves differently through the different strata below ground, analysis of the data can be used to indicate potential geological features.

The data is pored over by experts, and, is used to model exploration prospects.

Seismic programmes come in two forms: 2D (meaning two-dimensional), which captures data along straight lines, and the more advanced and more expensive 3D seismic. Typically, unless other information is known about the area, the latter is needed if a well is to follow.

Other ‘geotechnical’ studies can also be undertaken for projects at this pre-drill phase.

Prospect inventories & resource estimation
With seismic data evidently providing a degree of de-risking, (hopefully) backing up the initial exploration concept, the project is now at a point where the company can start giving the market an idea of what the company thinks it might have.

This is, often, the stage where a broader investor audience starts to pay more attention.

Companies will often begin giving investors information about specific potential targets; they may even give indicative ‘in-house̵7; estimate of scale.

Be warned, these are highly speculative estimates at best. Nothing has been ‘discovered217; yet, and, the millions or billions of barrels of crude estimated to exist below the surface have a habit of disappearing quickly if future exploration programmes don’t work out.

Third-party estimates carry more credibility, albeit they are still (and unavoidably) conceptual.

Explorers will hire industry consultants to analyse project data, inspect or create their own models and come to their own estimates of the project.

This is a crucial step for what comes next. It rubber stamps the prospective resources and gives outsiders more confidence in the project’s potential.

Funding
Nobody gets this far without spending money, and, frankly, a capital raise is always a possibility for exploration stocks.

Nonetheless, at this point, we’re reaching the thicker end of the wedge.

Budgets of just a couple of million dollars can be stretched through the preliminary exploration phases, especially if the project comes with pre-existing data or insight.

Drilling a well will usually cost a multiple of that. The rule of thumb is offshore drilling is more expensive than offshore exploration. The shallow wells of Texas might come in at a couple of million dollars a pop, while at the height of the last boom, deep water rates were around US$1mln a day. Today? Well, it might cost anywhere between US$20mln and US$60mln probe beneath the waves. That's cheaper than it used to be, but it's still a big boy's play.

Sometimes a junior can get creative to cut out some costs. For example, old wells can be re-opened to test new exploration targets or, alternatively, novel partnership deals can be done with drill rig operators.

But, most successful early-stage explorers will reach a point where they’ll have to find the budget to drill new wells.

Securing funding can be a positive or a negative for the share price. On one hand, it creates the wherewithal to drill a possible discovery well, the biggest single value catalyst of them all. But, it can also introduce substantial equity dilution.

The threat of dilution is among the reasons smaller explorers will look to strike partnerships with more established operators, trading off project equity in return for funding commitments.

Whilst ‘farm-out̵7; deal-making can be valuable, protracted negotiations can sometimes see projects become frozen in time.

Exploration drilling
Arguably, this is the most straightforward part of the whole project - from an investor’s point of view at least. Obviously, there’s a great deal of engineering, project management and operations work involved.

But, for investors, the process can be boiled down to a simple process. A hole is drilled down into the ground until it reaches the targeted depth.

The hope is that everything has gone to plan and the reservoir is present as the geologists predicted.

If the hydrocarbons are found in sufficient volume, if the reservoir is viable and if the oil or gas flows to surface … in all likelihood, the shares will be off to the races. If one or all fail to materialise, expect to see an equally sharp fall in the share price.

Proving up with appraisal drilling
A discovery well proves the hydrocarbons are there and are viable; further appraisal wells are usually needed to confirm the extent of the discovery.

Ongoing programmes are about fact-finding for the planning of field development.

Exploration and appraisal data also firms up the pre-drill models and resources estimates.

All in all, it can be a phase of significant value creation.

Project financing
Assuming the project has continued to achieve success over success, it will reach a point where the oil resources have been suitably proven / de-risked, that operationally attentions will turn toward the major engineering undertaking that is field development.

Here, the capital requirements are now much more substantial.

Onshore, proximity to existing infrastructure and end markets can make things easier and cheaper.

But, offshore; well this is where projects become very expensive.

Capital requirements for North Sea field developments (with only a few wells) will cost developers hundreds of millions of dollars.

Deep-water projects can cost substantially more than that, and, major ‘world class’ frontier projects can easily run into the billions.

By this point, all other things being equal, what was a tiny exploration team has most likely grown substantially. The business itself is now probably worth anywhere between £300mln to £1bn, depending on the size of its undeveloped resource.

Even so, the company will need to secure some form of project finance.

Traditionally, it would come mostly via the issue of debt financing, supplemented with some more shareholder equity for good measure.

Alternatively, it could come in the form of another farm-out, selling more project equity for development capital.

Once the funds and the project planning are together, the discovery reaches project sanction.

Field development: the slow-burn to real value creation
Getting the green light to take a project into development is undoubtedly an exciting catalyst that will give most stocks a good lift, but, it also puts into motion what usually ends up being a quieter phase for investors.

Although the company and its operational teams have never been busier, the stock market speculators that have backed management’s every move to this point are now running out of opportunities for immediate upside.

Development work, spanning at least a 12-18 month offshore, brings the project to ‘first oil’ and will establish revenue generating production.

It is a watershed moment for the company, it marks an undeniable and value-creating milestone.

But, it also represents something significant for a certain kind of investor.

Valuations of the company become progressively less about potential and what could be.

The premise for investment and the purpose of holding shares is changing. It is now about the material facts of a production business: it is about output volumes, sales prices, margins and cash flow.

And, importantly, investors are now eyeing the pace at which that project financing debt can be repaid so that they can start milking dividends.

Congratulations, the dynamic exploration minnow is now an income paying buy-to-hold portfolio share!

Exit or evolution
The evolution of stock market-listed companies is, of course, never so simple. This linear narrative suits this author’s purpose. In reality, there are a great number of divergent moments and there the potential pitfalls along the way are plentiful.

Even if a company was so successful that they could achieve each of the above milestones so effortlessly, in the competitive and fast-moving oil and gas sector, good projects are always sought after.

That may come in the form of a big money premium cash takeover, although recent history suggests it may be more complicated than that.

Perhaps, a farm-out partner takes up a large working majority of the project and the small-cap explorer becomes the minority passenger, towed along for the remainder of the project's lifespan.

Quality assets have, meanwhile, been lost to creditors because farm-out transactions never emerged (go ask any Xcite Energy investor about such pitfalls).

At some point or another, the company or the project is likely to become the subject of some form of merger and acquisition activity or consolidation.

So there it is, in a nutshell, the A-Z, of oil exploration and development. In the next instalment, we'll get into the real nitty gritty of oil investment.

[bionicdog] 12/9/2018 12:22

Alas , you are too thick WTD.

[whattheduce] 12/9/2018 12:21

Is there a new block on posting web links or something, will try and fool the system again

hxxp://www.proactiveinvestors.co.uk/companies/news/197736/oil-and-gas-shares-are-

event-driven-trading-here-are-the-key-triggers-for-putting-pounds-into-petroleum-

197736.html

[bionicdog] 12/9/2018 12:21

gizmogizmo
12 Sep '18 - 11:04 - 103244 of 103279
Another waste TANKER in.good good good.
Once commercial is officially done.
Up we will start to go.
SO many DERAMPERS on here today WHY ??.
GOODLUCK LTH.

DATAIT
12 Sep '18 - 11:05 - 103245 of 103279
market makers not letting you buy wonder why lol

[whattheduce] 12/9/2018 12:20

Won't let me post link, reconstruct the link from these three lines

[...]

event-driven-trading-here-are-the-key-triggers-for-putting-pounds-into-petroleum-

197736.html

[whattheduce] 12/9/2018 12:19

Published yesterday, a useful read. Can you see where UKOG is in the life-cycle? Can you gauge what kind of value we should be? Can you see the future?

[...]

[sb888] 12/9/2018 12:17

Seems that is the way to silence da tit.!

[25wbh] 12/9/2018 12:14

thanks Henchard

[henchard] 12/9/2018 12:05

Good on you 25wbh, I'll edit your entry into the list in my previous post ....... now done.

[hans christian andersen] 12/9/2018 12:03

Tanker 13 out

[tomgun70] 12/9/2018 12:02

Anyone follow my tip on MYSL 9 hours ago on here? Well done if you listened,still got plenty of legs before results.

[von trap2] 12/9/2018 12:00

A phantom blacked out 3 wheeler has been spotted entering the site.a short guy with sunglasses and sporting lots of gold exited.House of Saudi?
One day Rodders... pmsl

[whattheduce] 12/9/2018 11:59

Reading around other forums, there is shell shocked disbelief at the share price following the Portland RNS and other news. There is a very angry head of steam building up, FCA simply can not bury it's head in the sand on this.

[25wbh] 12/9/2018 11:58

Hi Henchard Thanks for offer mine is 1777
many thanks, B

[whattheduce] 12/9/2018 11:55

Fag break over!