Industry

UKOG accounts look beyond Weald oil and gas

UK Oil & Gas plc is investigating international oil and gas projects and renewable schemes at home, the company’s annual accounts said today.

UKOG’s Horse Hill site in Surrey, 29 April 2020. Photo: Used with the owner’s consent

The company, which said it has now produced more than 162,000 barrels of oil from Horse Hill in Surrey, is looking at the feasibility of turning part of the site into a geothermal and solar hub.

The scheme aimed to generate and supply more than 200,000 Mwh per year of continuous baseload, mainly as heat energy, UKOG said. It predicted:

“This hub could potentially supply heat energy to a defined significant industrial end-user in the area.”

UKOG also said it was reviewing overseas hydrocarbon projects. Chief executive, Stephen Sanderson, said:

“we have completed the evaluation of potentially lucrative proven oil and gas field opportunities elsewhere in the world, including in the United States, where access to such opportunities has arisen from within the Directors’ extensive business network.

“Should negotiations be successful, there is the realistic prospect of adding significantly to both our reserves and cash flow base in the coming year.”

UKOG is already working in Turkey in the Basur oilfield. It said it was looking for additional projects in the country and had reviewed a further new opportunity to the southeast of the Resan licence.

Stephen Sanderson said the company was “actively evaluating” two sites, in southern England and the north east, for hydrogen generation and storage. This would, he said, “take advantage of the national transition from natural gas to hydrogen for industrial and domestic power and heating demands”.

He said:

“The Company hopes to bring at least one new oil and gas opportunity and one or more geothermal-hub and hydrogen-hub projects to fruition in the coming year.”

Hybrid energy sites would focus on subsurface gas and/or hydrogen storage, the company said.

The sites would test UKOG’s hydrogen battery concept to provide peak-shaver power generation and green hydrogen generation from geothermal and other renewable sources, he said.

(Peak shaving is about levelling out peaks in electricity use for all consumers. During high demand, energy produces will reduce the amount of power consumption at small increments to avoid peak loads).

UKOG said it had raised £7.7m between October 2020 and July 2021 to fund drilling and seismic survey costs in Turkey. Raising funds from equity remained a necessary part of UKOG’s strategy, the company said.

  • UKOG also announced it had decided not to appeal against refusal of planning permission for oil exploration at Arreton on the Isle of Wight. DrillOrDrop report

Key figures

UKOG’s revenue from oil sales were up in the year to September 2021 and losses were down sharply.

Revenue from oil sales: £1.56m (2020: £0.91m)

Oil sale volume: 36,664 barrels from Horse Hill and Horndean at average price of £43 per barrel

Depletion, depreciation and amortisation costs: £0.69m (2020 £1.37m)

Costs of sales: £1.07m (2020 £1.17m)

Gross loss for year: £0.19m (2020 £1.63m)

Admin expenses: £2.10m (2020 £1.76m)

Operating loss: £3.81m (2020 £14.1m)

Finance costs: £0.89mm (2020 £0.29m) – unwinding of discounts of decommissioning provisions

Retained loss for the year: £4.89m (2020 £20.94m)

Non-current assets: £37.68m (2020 £37.78m)

Cash and cash equivalents: £4.73m (2020 £1.63m)

Current assets: £5.36m (2020 £2.38mm)

Net assets: £37.50m (2020 34.01m)

Production: 140 barrels of oil per day (2020 128 bopd)

Operating costs: £29/barrel (2020 £28/barrel

Payments to Stephen Sanderson: £287,000 (2020 £301,000)

Total directors’ salary: £468,000 (2020 £515,000)

Loss before tax: £4.84m (2020 £20.93m)

3 replies »

  1. Good morning folks, It’s Sunday 27th March, and it’s Spring Daylight saving hour today. I hope you all woke up one hour early this morning?

    And, no, that’s not a “conspiracy theory”, however. Spring is apparently one of the few things, or perhaps even the only thing, that isn’t a “conspiracy theory” according to some?

    Maybe that obsession with all too commonly regurgitated fake labels, reveals that some think and write, as if everything that threatens to disagree with them or even points out that they have incriminated themselves in an accusation claiming a “conspiracy theory” against others. Is a “conspiracy theory”? But perhaps all that does, is to “indicate” the words of a “conspiracy theorist” all by itself? Stranger claims have been forthcoming from that direction, haven’t they?

    However. Back to the Real World. It’s beautiful spring weather for these last few days, too. I’ve been out and about already, enjoying the warm sunshine. So I thought that there ought to be something today about spring to sing along to. There are many to choose from, but this one came up in the songs that brings back sunny days walking with my friends way back then.

    It is of course:
    the Beatles: “Here Comes The Sun”

    It has its own lyrics, so you can sit back and enjoy, or maybe take it out and play it on whatever comes in handy.

    Have a great Sunday with family and friends, and like everything else in life, spring is something deeper than just the year-long rotation of the Earths tilt towards the sun, it’s something of the heart and the effects of sunshine and blue skies how everyone feels better after the long cold winter of greed and profiteering.

    HAND.

    • Just a quickie, before lunchtime, (time is an illusion, lunchtime doubly so). The next song on the list was:

      Johnny Nash – I Can See Clearly Now

      I can see clearly now, the rain is gone,
      I can see all obstacles in my way
      Gone are the dark clouds that had me blind
      It’s gonna be a bright (bright), bright (bright)
      Sun-Shiny day.
      .
      I think I can make it now, the pain is gone
      All of the bad feelings have disappeared
      Here is the rainbow I’ve been prayin for
      It’s gonna be a bright (bright), bright (bright)
      Sun-Shiny day.
      .
      Look all around, there’s nothin but blue skies
      Look straight ahead, nothin but blue skies
      .
      I can see clearly now, the rain is gone,
      I can see all obstacles in my way
      Gone are the dark clouds that had me blind
      It’s gonna be a bright (bright), bright (bright)
      Sun-Shiny day.

      Enjoy!

      Enjoy!

  2. Hmm.

    Looks as if UKOG may be a candidate for a change in name if their re-focus outside the UK continues and their re-focus on non fossil fuel energy continues. Perhaps, like the Liberals, just add a bit each time?

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