Share Name Share Symbol Market Type Share ISIN Share Description
UK Oil & Gas LSE:UKOG London Ordinary Share GB00B9MRZS43 ORD 0.01P
  Price Change % Change Share Price Shares Traded Last Trade
  +0.175p +11.86% 1.65p 72,745,452 13:12:06
Bid Price Offer Price High Price Low Price Open Price
1.60p 1.70p 1.70p 1.475p 1.475p
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Technology Hardware & Equipment 0.21 -2.27 -0.08 91.8

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Date Time Title Posts
19/11/201813:31UKOG strikes oil 2016113,797
19/11/201810:49UK OIL & GAS 2018 - "The Gatwick Gusher"6,864
16/11/201815:08I wonder why?404
16/11/201809:34UKOG - Another 'oil' stock for mug punters477
16/11/201808:44stephen sanderson says horsehill Ј1,000,000 profit each month from 1 well1

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UK Oil & Gas (UKOG) Top Chat Posts

DateSubject
19/11/2018
08:20
UK Oil & Gas Daily Update: UK Oil & Gas is listed in the Technology Hardware & Equipment sector of the London Stock Exchange with ticker UKOG. The last closing price for UK Oil & Gas was 1.48p.
UK Oil & Gas has a 4 week average price of 1.38p and a 12 week average price of 1.38p.
The 1 year high share price is 4.68p while the 1 year low share price is currently 0.93p.
There are currently 5,566,524,206 shares in issue and the average daily traded volume is 108,695,035 shares. The market capitalisation of UK Oil & Gas is £91,847,649.40.
16/11/2018
08:38
temmujin: Savvy investors will be saying to themselves hey I bought into UKOG at say 8p I feel trapped and we are at least a year away from production what is going to happen to my companies share price .... mmm stagnate or decline... not good! If I invest in ANGS what is likely to happen to the share price.... major rerate ...why ?... Well I invested in UKOG because of the Weald potential and now ANGS are about to open a production well specifically designed as a producer and UKOG have already began to demonstrate that the Weald is commercial so this is good. Perhaps I should move out of UKOG in the belief that ANGS will recover some of my value decline in UKOG and revisit them when I can buy 3,4,5 times as many shares with my ANGS profits...!!! Just saying this is an option and a fantastic opportunity to make the most out of the Weald Oiler’s as it stands. GLTA
05/11/2018
18:04
atino: Is it finally time to return to the UKOG share price? Kevin Godbold | Monday, 5th November, 2018 Something momentous happened last month. UK Oil & Gas (LSE: UKOG) declared its Horse Hill Portland oil field – the so-called Gatwick Gusher — commercially viable following an extended well test. The firm even transported several tankers of crude oil to Fawley refinery during the test – this is real oil we are talking about, in Surrey, under the Weald Basin. Amazing. Preparing for field development Are the Home Counties set to become a new Texas? Will we see the gentle English landscape covered with a forest of nodding donkey oil pumps, just as the highlands of Scotland have sprouted acres of wind generators? I hope not, and with a bit of luck, that vision is just me getting carried away with my imagination. In any case, I think technology has moved on since the days of the nodding donkey so that oil wells can be less visually obtrusive. However, the company did say Horse Hill Developments, which is the operating company, plans to begin long-term Portland oil production during 2019, as long as it gets the necessary regulatory consents. The directors’ current vision is to develop three production wells and two pressure support wells. UKOG owns around 47% of the project. UKOG’s chief executive, Stephen Sanderson, said in last month’s update that the declaration of Portland commercial viability “is a significant milestone for the company.” He pointed out that it “transforms” Horse Hill from an exploration endeavour into a “fully-fledged field development.” Indeed, UKOG could become a producing oil firm with significant cash inflows ramping up during 2019 if all goes well. The results of the extended well test were better than the directors expected and they now think the first planned horizontal producer well, HH-2, could deliver sustained oil rates of 720 to 1,080 barrels of oil per day (bopd). The company plans to spud (start drilling) the well in early 2019. Potential long-term production Looking forward, Stephen Sanderson anticipates“the possibility of combined long-term production” from both the Portland and nearby Kimmeridge prospects, which he said would be a “potentially transformational prospect for Horse Hill and the company.” However, the firm noted in the announcement that there is no absolute guarantee that forecast, targeted or calculated rates of production will be achieved. Perhaps that’s why the stock market’s reaction to the news has been so muted. Indeed, the share price has barely budged since the announcement last month, which is a far cry from the big jumps and plunges it has been making over the last few years. But I think there are good reasons for that. Firstly, there’s still a long way to go operationally before oil starts flowing and cash starts rolling in. Secondly, the firm has been back to the market repeatedly for funds with the consequence that long-standing shareholders have been diluted. When I first wrote about the company four years ago, the market capitalisation stood at around £17m. Today it’s at almost £106m, so the stakes are a lot higher. Finally, with UKOG as a producer, will it be valued more like a producer by the market than like an explorer? I think we’ve seen something like that happen with Soco International,for example, where a lower valuation has depressed the share price to a shadow of its former self. In summary, I think UKOG today is interesting, but still highly speculative. https://www.fool.co.uk/investing/2018/11/05/is-it-finally-time-to-return-to-the-ukog-share-price/
24/10/2018
18:34
atino: [Quote] There's something we are on the edge of liking about Angus Energy's recent price movements. At present, they are trading around 11.5p and movement now bettering 12.75p looks capable of a recovery cycle towards an initial 16p. Secondary, if bettered, is at 18p. Shown on the chart is an extremely tentative line, a trend drawn on historical closing prices. At present, it demands the share price actually close above 20p before continued recovery to 27p becomes possible. Price movements certainly provide a little confusion as, to be honest, we have considerable trouble projecting any rise beyond 18p. If experience is anything to rely upon, should the price enjoy some manipulation gaps once above the 12.75p, we'd feel hope exists for life beyond the 18p target on the present cycle. As always, there's another side of the coin. The share price would require to slump below 7p to permit a raised eyebrow as this could easily drive the price down to 4.5p initially with secondary, if broken, at 1.75p. To judge by the feel of price moves, this seems an unlikely proposition. https://www.ii.co.uk/analysis-commentary/angus-energy-shares-are-flying-how-high-can-they-go-ii507007/
18/10/2018
17:50
atino: HOW DARE YOU 😡 ! And now for forfeit against “My Atino” 😲 !...(RUN !) [Quote] “Oil under Surrey? Scepticism 😱🤥raised as Gatwick drillers gush over oil flows“ Surrey’s would-be oil drillers claim that crude flows could gush from the Home Counties at triple the expected rate by next year – although not everyone is convinced. By Jillian Ambrose, energy editor 18 October 2018 Fresh testing of an oil well near Gatwick has revealed that up to 1,000 barrels of oil could flow from Surrey’s sandstone layers every day, according to the company behind the plans. UK Oil and Gas (UKOG) sparked a 6pc share price bounce by telling investors that its plans for the Portland oil licence are “commercially viable”. Stephen Sanderson, UKOG’s chief executive, said by the end of this year it would apply to Surrey County Council for permission to begin commercial drilling in 2019. However, experts have once again poured doubt on the latest round of claims from the company. Ashley Kelty, an analyst with financial services group Cantor Fitzgerald, described the announcement as “spurious” and said it was “extremely unlikely” that UKOG would be able to recover as much of the oil reserves as it claims. “The company has been saying that the Portland well is commercial for a while now, so this is probably more to keep the voracious appetite of the retail punters for news sated,” he said. He added that a flow rate of 1,000 barrels of oil a day “seems a leap of faith” given the testing achieved only 360 barrels of oil a day. UKOG has come under fire in the past for over-stating the potential of its oil plans in the Weald Basin near Gatwick Airport which it claims could hold billions of barrels of oil. Shares in the company can be snapped up on the junior Aim market for as little as 2p, even after a flurry of buying on the market following the announcement. The company is worth a fraction of its value last year when shares climbed to over 8p after the Environment Agency gave the go-ahead to drill the onshore licence to test its oil flows. https://www.share-talk.com/oil-under-surrey-scepticism-raised-as-gatwick-drillers-gush-over-oil-flows/amp/
18/10/2018
17:29
atino: Evening:-) [Quote] "Is the UKOG share price on the brink of a new surge?" | Alan Oscroft | Thursday, 18th October, 2018 🙇‍♂;️ After the "early enthusiasm" 🤦‍♂;️ 😜 and the share price climb subsided 😤, the question has been whether UK Oil & Gas (LSE: UKOG) would ever get oil from the so-called Gatwick Gusher… well, gushing? The UKOG subsidiary and operator at the Weald Basin project, Horse Hill Developments (HHDL), had earlier released short-term flow test results, which had disappointed investors and added to the share price volatility. The shares have swung between less than 1p and more than 2.5p over the past six months, and that’s not my idea of a nerve-calming investment. Early tests were followed by an extended well test (EWT) programme, which concluded this month. And the latest update on Thursday, speaking of the Portland and Kimmeridge targets, tells us that HHDL “now considers the Portland oil field to be commercially viable.” The company aims to begin long-term production during 2019. The project could see the development of up to three production wells, and up to two pressure support wells, but what production volumes should we expect? Flow rates Being understandably cautious, HHDL says its HH-2 horizontal well “has a targeted sustainable daily Portland production rate of 720 to 1,080 bopd“, which is two-to-three times the “calculated sustainable vertical well rate of 362 bopd derived from the EWT programme.” The company (wisely, I think, considering the ebullience that followed the initial news of its discoveries), adds a caution: “There can be no absolute guarantee that forecast, targeted or calculated rates of production will be achieved.” The share price responded with a 3.7% rise by mid-morning, but that needs to be tempered by its penny share nature and the high spread. At the time of writing, we’re looking at a spread of 2.5% between buying and selling prices, which is what you effectively lose the moment you buy the shares. Still positive? When I last looked at UKOG, shortly after the earlier flow test results were in (but before the EWT programme), my conclusion was that “the signs are indeed turning positive for UKOG.” So what’s my take now? This positive move on the commercial viability of the project comes after several updates in the EWT programme progress over the past couple of months, and anything the reduces the uncertainty has to be a good thing. And after a year or so of frustration, I can see how sentiment towards UKOG really could start shifting. And if we do see commercial pumping in 2019, the share price could spike back up again. But for me, UKOG is still very highly speculative and a lot could still go wrong, so I’m really not keen on shares with this level of risk. https://www.fool.co.uk/investing/2018/10/18/is-the-ukog-share-price-on-the-brink-of-a-new-surge/
05/10/2018
12:21
whattheduce: Intersting comments from ALBA, other then UKOG the only other AIM listed company in HHDL, ergo all the others had dropped a full steaming one. Horse Hill-1 (“HH-1”) Portland and Kimmeridge Oil Discovery, Weald Basin, UK George Frangeskides, Alba’s Executive Chairman, commented: “These ambitious plans revealed by the Operator to drill up to a further four wells at the Horse Hill site, on top of the already planned HH-1z side-track well and HH-2 new well, supports our belief in the potential for Horse Hill to provide material production and cash flow returns to Alba in the medium to long-term. In the short-term, meanwhile, we await the results of the current Kimmeridge EWT, which we hope will further underpin the plans to submit a planning application for the commencement of full-scale production.” “On the corporate front, the recently announced disposals by a number of the participants of their stakes in Horse Hill means that Alba is now the sole AIM-quoted participant in the Horse Hill venture aside from UKOG, and the third largest participant in the Project overall, after UKOG and Tellurian Inc (NASDAQ: TELL). Alba remains a committed participant in Horse Hill and we look forward to reporting further news in this fast-developing project as it arises.” Price: 0.42p MCp: £12.6m Tk: ALBA.L Sector: Resources Recommendation: BUY Target Price: 6.0p Horse Hill EWT Update Alba Mineral Resources (ALBA.L) has this morning updated investors with activities on its major onshore oil project at Horse Hill. From the update, we learnt that a detailed long-term production scoping report has been submitted to the local council authority (Surrey County Council), which includes a total of six production wells being drilled over a period of two years, with an assumed maximum daily rate of 3,500 barrels of oil per day. Once feedback on the 25-page report is obtained, a full-scale production planning application will be submitted, before the 2018 EWT programme is completed. Operator HHDL, in which Alba holds a 18.1% stake, confirmed that extended well tests on the Kimmeridge Limestone 4 (KL4) have already commenced. Further updates from these tests will “follow in due course”. Today’s announcement also indicated that other near-term news-flow is likely to be an internal declaration of commerciality from the Portland layer, which will be “made shortly” by the operator. The competent persons report published in July by independent oil and gas consultants Xodus outlined that the single HH-1 well “sees” a connected Portland ‘oil in place’ of around 7 to 11 million barrels of oil gross to the project partners. Comment & Recommendation We are encouraged by the continued advancement of the Horse Hill project and potential it provides to shareholders with near-term high impact news-flow for what could become a significant onshore oil project and asset to the UK resources economy. The comments by the operator on the shallower Portland oil HH-1 well are very upbeat. But of course, the larger potential prize lies below in the Kimmeridge, from which potential high-impact results we await in the coming weeks. Alba’s project positioning at Horse Hill has been strengthened recently, following the consolidation of its listed project partners. Alba is now just one of only two AIM listed participants at Horse Hill and third largest stakeholder overall. AIM listed UKOG plc and NASDAQ listed Tellurian Inc are the other listed HHDL partners. It must be remembered that Alba is more than a one-project company, with a diversified portfolio of interests, that encompass several projects in Greenland, including its Thule Black Sands ilmenite project and the Clogau gold project in Wales, which offers substantial exploration upside, potential production opportunities and ability to produce premium priced ‘Welsh’ branded gold. First Equity continues to rate the shares as a ‘Buy’ with a 6.0p price target, of which 4.0p is currently attributed to the Horse Hill project. The target price is much higher than the prevailing share price, which underlies that the market continues to substantially discount the likelihood of a significant commercial discovery and near-term production. As further news and project validation is revealed, this gap in valuation may narrow very quickly, providing today’s investment opportunity for the astute speculative investor.
04/10/2018
12:09
25wbh: I have posted here in the past to offer some technical insight as a practicing chartered geologist in the UK. The geological arguments have been gone over in fine detail here over many months but I do certainly agree with DLs interview comment in that there is a great misconception regarding flow testing and the formulation of an EWT. In short, there is no set specification for an EWT. Such tests are entirely site-specific based on a technical interpretation of the geology, the geotechnical properties of the strata, the reservoir dynamics and the well construction. EWTs are highly experimental and it is common practice to halt the test multiple times to review test data and to use this information to adapt and modify subsequent stages of the EWT. An EWT is absolutely NOT a linear or binary process but a highly organic process of data collection, iteration, interpretation and adjustment and is best thought of as a series of multiple sub-tests. There will be variations in pumping rate, periods of pump/flare activity/inactivity. Any attempt to deduce the flow rate from the testing by looking at pump stroke rate over time is going to be fraught with error and the longer the EWT the more significant the error. Personally I find it more useful to look at other factors to assess progress. UKOG have systematically and recently pursued a policy of acquisition of interest within HHDL which now stands at some 72%, up 22% in the last few months. Portland commercial is realistically a given now and has been massively de-risked with an official declaration likely to be published soon. The Kimmeridge Fm testing has only just started but available information to date indicates a viable play. In my view UKOG are quietly positioning themselves to be top of the podium for when this really kicks off shortly. SS is highly experienced and knows the importance of getting your ducks in a row BEFORE you need them to be. I have taken advantage of this quiet period and depressed share price to add significantly and an very confident we will see a rise in the share price soon. Don't be fooled by the typical impatience on AIM - it creates some great oppourtinites. Reply | Recommend 26 | ReportWashers Posts: 2,343 Opinion: Strong Buy Price: 1.875 RE: Timely top upToday 12:05I expect to The whole point of investing is to make money. I have two ISA's full now and no rush for an instant return I will take imminent lol GLA Reply | Recommend | Reportdarko Posts: 1,654 Opinion: No Opinion Price: 1.875 imminentToday 11:54Nowt to say just thought i would be first to say it :-) Reply | Recommend 1 | Reportdarko Posts: 1,654 Opinion: No Opinion Price: 1.875 RE: jungernsToday 11:50Guy called Alan seems to know his stuff but might just be good at reading :-). Just because somebody questions good news dont make them a deramper Reply | Recommend | ReportJoe_Watson Posts: 27 Opinion: No Opinion Price: 1.875 KARMAToday 11:48If only we can find as much oil as there is testosterone on this site, the price should go through the roof. Om mani padmi om Chill Reply | Recommend 2 | ReportStarBright Posts: 566 Opinion: No Opinion Price: 1.875 RE: jungernsToday 11:46Iliorla’s post matches precisely one of FOTH’s tweets. Either Iliorla has copied FOTH’s tweet and posted it here for some reason, or Iliorla is FOTH. Pretty pathetic either way. Time to grow up. Reply | Recommend 3 | Reportnhawan Posts: 1,882 Opinion: No Opinion Price: 1.90 RE: Falling share price Today 11:27It has to bounce soon. The share price is currently around the same price as the last HH acquisition from SOLO and it did bounce from this level just 2 months ago. The 1.8p level has been strong support so let's see if it does the same again. Reply | Recommend | Report Dropzone Posts: 6,428 Opinion: No Opinion Price: 1.90 RE: Timely top upToday 11:26I hope they are worth more than washers when you sell themm Reply | Recommend 1 | ReportWashers Posts: 2,343 Opinion: Strong Buy Price: 1.90 Timely top upToday 11:20Just in time for a tick up another 95k shares all adds up. GLA Reply | Recommend 1 | Reportjungerns Posts: 1,610 Opinion: No Opinion Price: 1.90 re Jungerns.....illoriaToday 11:19illoria No idea who you are or what you're claiming but have NEVER quoted you in my life and never heard of you before frankly Nor am I swing trader (not that theres anything wrong with that) Nor do I have multiple LSE accounts sunshine I will happily go on file here and write a cheque for £10,000 to a charity of your choice should that be inaccurate. The problem with people like yourself is that "you're at it 24/7"...as such you assume everybody else must be pulling a fast one as well and you're constantly chasing shadows when none exist £10,000 feel free to contact LSE and when you told you are wrong you put £50 in a charity of MY choice Off you go an that applies to anyone else as well. Am guessing that you're actually the oaf on the hill in disguise as hes banging on about me and morocco being swing traders for days Reply | Recommend 3 | Report spendafew Posts: 97 Opinion: No Opinion Price: 1.90 Solo & MM'sToday 11:17How many more shares do solo have at 1.97p to sell before this share price truly reflects the amount of busy vs sells? I'm annoyed with DL banging on about the MM's controlling the share price to cover there shorts. That may well be true, but the fact is the share price reflects the confidence in ukog. The shares are continually being diluted by paying other debts ie solo & £10m loan, and the pi's are funding this with no reward. Until all the debts are paid this share price is going no where fast imho. Reply | Recommend 2 | ReportDropzone Posts: 6,428 Opinion: No Opinion Price: 1.90 RE: Falling share price Today 11:16Every day we are being shafted. I'm not throwing anymore cash into this until just for a change there is good solid news. Reply | Recommend | ReportWaynesmith Posts: 2,065 Opinion: No Opinion Price: 1.875 Is itToday 11:15150 days yet ? Reply | Recommend 1 | ReportDropzone Posts: 6,428 Opinion: No Opinion Price: 1.90 Falling share price Today 11:13No light in this tunnel so far. Reply | Recommend | ReportIbug Posts: 1,553 Opinion: No Opinion Price: 1.875 From SCOPING REQUEST REPORTToday 10:513. DEVELOPMENT DESCRIPTION The Site size will increase from 2.08 hectares to approximately 2.6 hectares with the additional land take being directly to the east of the existing well site. They are digging to the west so I would put that idea to bed. Reply | Recommend 1 | Report 1234567891011Next Share Chat Page Home | Contact Us | About Us | Advertise with Us | Sitemap | Terms & Conditions | Chat Rules | Cookies | Privacy | Mobile Site Datafeed and UK data supplied by NBTrader and Digital Look. While London South East do their best to maintain the high quality of the information displayed on this site, we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk. The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates. 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18/9/2018
12:17
datait: Oil is moving up nicely but UKOG need to find plenty of oil at the moment its light very light commercial if it was a lot better the price would reflect that but its not. So for now UKOG share price will fall back well over priced.
12/9/2018
11:26
hans christian andersen: 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.
12/9/2018
05:07
sb888: Both bulls and bears know that WTD is an absolute moron that has no connection with reality and his brother AMR is fastly catching him up. WTD does have the much wanted accolade of being moron of the week though, not once but twice....further proof of his lunacy There is manipulation of the share price but it is the exact opposite of what these idiots claim The share price is vastly over priced, and should be 25% of where it is. Why these morons cant read that when seeing the latest mockery of an rns just proves how retarded they are. Share price is only where it is because of moron mug punters buying it without any real understanding of what has happened or is happening
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