Uk Oil & Gas Share Discussion Threads

[thegrumpster] 23/3/2016 14:14

Shows maps of existing UK pipelines.
Not many crude oil lines.
Possibly only shows pipelines in use.
There was a crude pipeline that was supposed to run from Milford Haven along the south coast of Wales for 96km. Maybe it was planned but never built, or became redundant when the Milford refinery closed.
So there may be more than are shown in the link.

[forwood] 23/3/2016 14:09

you haven't read my post 12bn - 20% of one pad generating 10k bbls a day is 2k. 5 pads is 10k and so on. if you think they're going to be restricted to the flow rate of one vertical well, you're mad!

[12bn] 23/3/2016 14:02

$ net profit on 2k ..........10k ...........20k bbld
5....... £2,468,787 ..... £12,343,937..... £24,687,875
10...... £4,937,575 ..... £24,687,875..... £49,375,749
15...... £7,406,362 ..... £37,031,812..... £74,063,624
25...... £12,343,937 .... £61,719,687.....£123,439,374
35...... £17,281,512 .... £86,407,562.... £172,815,123
45...... £22,219,087 .... £111,095,436... £222,190,8/////// Forwood I wasn't going to post here but your figures are wrong. UKOG only will get 20% of 2000 bopd (initial flow rates are only 1680 bopd as well) but $5 x 400 bopd = $2000 x 365 days = $730k = £500k p/a NOT £2,468,787!!

[funkmasterp12] 23/3/2016 14:01

LGO already has commercial oil and their recent placing struggled despite Lenigas's best efforts (TW as source).

[cupra kid] 23/3/2016 13:59

If and when a placing is required I'll eat my shorts if it's not heavily oversubscribed. Commercial oil, that's what the investors are here for.

[funkmasterp12] 23/3/2016 13:59

moneymunch - I made a lot of money (admittedly a fluke) on STG and ALBA when HH first spudded, so I keep a very active interest in these stocks. I also enjoy discussing them and adding my opinions, which I'm entitled to do.

If you don't like it, please filter me.

[funkmasterp12] 23/3/2016 13:56

Well, AIM companies have a track record of ramping stocks to issue placings and David Lenigas-related companies aren't exactly exempt from this. Allegedly, obviously.

This conversation is over, because neither of us know either way. Let's see what happens though - I claim bragging rights if they do raise ;)

[forwood] 23/3/2016 13:51

funkmaster - if I was running UKOG and didn't need the money at the present time, I would not attempt to raise it. I'd have to be a complete imbecile. Those that give credence to this notion are slightly less than imbeciles.

Go back to the last capital raise, before they found oil. They did it on a reasonable share price high - incidentally quite a lot higher than where we are now!

This conversation is over!

[moneymunch] 23/3/2016 13:44

and why mention it here funky if you don't hold, why aren't you expressing your concerns elsewhere on Aim explorers? ????

[forwood] 23/3/2016 13:43

I have just been crunching some numbers. In one sense the amount of recoverable oil is meaningless. Say it is 2billion barrels, which is almost certain at present. If we were restricted to one well pad, producing 10k barrels a day for 350 days of the year, it would take 571 years to recover the lot! What's more likely to happen, is to ramp up production. At 50-100k a day it's still going to take a lifetime to get it all out.

These are the £cash flows at current exchange £1 = $1.4177 for UKOG's 20% at different profit margins, ie $5 dollar a barrel profit, up to $55. These are very crude figures, and doesn't take account of tax, etc., but will do for the illustration.

$ net profit on 2k ..........10k ...........20k bbld
5....... £2,468,787 ..... £12,343,937..... £24,687,875
10...... £4,937,575 ..... £24,687,875..... £49,375,749
15...... £7,406,362 ..... £37,031,812..... £74,063,624
25...... £12,343,937 .... £61,719,687.....£123,439,374
35...... £17,281,512 .... £86,407,562.... £172,815,123
45...... £22,219,087 .... £111,095,436... £222,190,873
55...... £27,156,662 .... £135,783,311... £271,566,622

Now multiply each of those by 10 which would be a low multiple, suggesting a yield of 10%. Tax etc might reduce that to 7.5% yield but that's still cheap, given the potential to increase production further.

The current mcap of UKOG is just over £40m. So it's being valued on one well pad producing 10k bbld at <$10 bbl profit. Seems rather conservative to me. At $15 bbl profit on 10 well pads we get to a market cap of £0.75bn (36p a share). You figure out the rest....

BTW this doesn't take account of UKOGs other interests, just HH

[moneymunch] 23/3/2016 13:42

Lol, they need one less than most Aim listed explorer's and so why would they do one now if they've got c £5m cash????

[janekane] 23/3/2016 13:35

And the mug punters are drawn in again

[funkmasterp12] 23/3/2016 13:33

moneymunch - they may not need one, but they may still do one anyway...

[funkmasterp12] 23/3/2016 13:32

Cupra Kid - it depends on how much dilution there is. It could create an overhang which becomes very difficult to shift regardless of news. It also may set a nasty precedent that the company will place into any rise.

If you're here indefinitely and believe in the prospects then no, a placing shouldn't bother you - but it would set back your timings somewhat.

Anyway - it's all irrelevant as we don't know for sure if a placing will happen or not.

[moneymunch] 23/3/2016 13:30

Lol they don't need a placing numptie, unless they got some imminent major expenditure, in which case the share price will look after itself on any major development news and any placing would likely be at a premium......Ukog have £4.5m and have just raised another £300k through the warrants. ...gla longs, a sudden and significant re-rate more than likely on continued positive newsflow. :-)

[cupra kid] 23/3/2016 13:24

So what if there is a placing? The money raised will be used to extract millions of barrels of oil! When that day comes the share price will be multiples of today's. Traders need to be wary, investors not quite so!

[funkmasterp12] 23/3/2016 13:19

The company could (and maybe should?) come out with an RNS refuting press allegations about a placing, by the way, or include it within another update. This isn't without precedent.

[daithedeath] 23/3/2016 12:56

Check out the address .

[cupra kid] 23/3/2016 12:37

On the subject of Lenigas, let's not forget that he no longer sits on the UKOG board!!

[forwood] 23/3/2016 12:08

well funkmaster, so you are another doubting thomas. Funny how we've had a series of these doubters tossed against the positive thread!

None of £munch's statements above is incorrect.

In fact, we are looking at several billion barrels here - quite how many will be indicated by the update to the technical expert studies produced before the oil strike - and it's now clear they erred on the side of caution, which is no more than sensible for consultants.

The placing scare - the company has said it has sufficient funds for the foreseeable future. In addition to the £5m cash held at their year end, they have also been raising cash from sales of oil produced during the flow test and the cashing of warrants. This has probably raised c £0.75m. The other reason this is unlikely is the Sp does not lend itself to a successful placing. Over 5p in 18 month's time might be a different matter.

I am an MBA and quite used to valuing companies based on a number of metrics. That the share price here is ludicrously low is astonishing given the potential. Most SPs are based on expectation of future cash flows and net asset value. The header data on value of oil in the ground and likely recoverability is exclusively UKOG and based on the independent experts views prior to the oil find.

At some point there will be a rerating and I can see the value of these shares rising 30 to 40 times their current value (unless taken over before then!). Flow rates are one thing - we have seen probably the highest ever flow rate from a vertical on-shore UK well. Exploiting it will see that increase substantially, quite how much will depend on the configuration of the horizontal well pads. The absolute key though is the overall estimate of how much oil can be extracted over the well's lifetime, together with the future price of oil (PoO). I suspect in due course the estimate of profitability at $40 oil will be revised down to nearer $25, as evidenced by some other metrics on costs. The likely rise of PoO to over $50 oil and in due course to its longer run price range $80 - 100, will be the game changer, and that is what people 'should' be basing their estimate of the current value on.

But this is just Horse Hill. The total of UKOG's interests is significantly more than Horse Hill. I hope I have made the point. Of course there's a measure of optimism here, why the hell not, it's fully justified by the findings to date!

[funkmasterp12] 23/3/2016 11:43

At least you're adding "in my opinion" now - that's a start.

[funkmasterp12] 23/3/2016 11:40

Yeah, but most of the others have placed.

[forwood] 23/3/2016 11:38

When discussing Horse Hill, the derampers forget there is not just one company here. HH is run by a consortium involving 8 companies. Although UKOG has a leading role in the consortium, in my view this limits the capacity to be anything other than totally straight with the findings. In addition, the reputation of independent experts like Nutech, Xodus and Schlumberger is at stake.

With all the publicity and different interest here, you can be sure that all sorts of people will be trying, and would be delighted, to find something wrong - and that would be very big news indeed.


Horse Hill Developments Ltd owns a 65% stake in the Horse Hill prospect and the remaining 35% of the prospect is held by Magellan Petroleum Corp.

UK Oil and Gas Investments holds a 30% stake in Horse Hill Developments, whilst Doriemus PLC, Stellar Resources PLC, Solo Oil PLC and Alba Mineral Resources PLC each hold 10% stakes in Horse Hill Developments, with Evocutis PLC holding a 2% stake and the balance is owned by Angus Energy, in which UK Oil & Gas has a 6% stake.