HOG - Hawkley Oil and Gas
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MMM Condog, did u get the impression the answers would be good or bad?. What questions did u ask??
Our little piggy has not bounced much, if it stays subdued and others continue to recover, it coud become an exciting proposition depending on the imminent announcment of choke size and flow details etc.
BGG I wanted to know about choke size, cash flow, intended spud time sand expected well completion times etc. No i didnt get any incling whatsoever about whether announcments would be positive or negative. Simply a response that an annnouncment would be out soon, that would answer most my questions.
Id almost put money on it being mainly relating to current choke setting, flow data and then a plan or something bringing forward either Chets or Well 2 at Syra.
Imo if the announcment says they are still on the 6mm choke i think it might present a buying opportunity as the market over reacts. If they are on an 8mm or 9mm it should defintiely imo help the sp head North, especially if the declines are insignificant.
Condog, haven't actually contacted the company myself however the whispers seem to be that they are still on the 6mm choke currently and as previously stated looking to move on to the 9mm at some stage.
I see the 9mm as icing, and think the real guts of a good announcement would be confirmation of cash flows (reveune / profit and confirmation of forecasts) as well as indication of progression for the next well.
The addition of another well has the potential to significantly de-risk this further and provide additional cash flows. I see this as what could deliver the real gains with adjusting choke a secondary to this but something that could be achieved in the meantime. I'd like to see them follow the stages of de-risk project through other succesful wells, solidify cashflows and then expand cashflows. Expanding is a secondary effect of de-risking.
Good times ahead imo and as you sat condog, if the market over-reacts to an announcement stating the 6mm choke is still being used, could present a great buying opp.
I see the 9mm as icing, and think the real guts of a good announcement would be confirmation of cash flows (reveune / profit and confirmation of forecasts) as well as indication of progression for the next well.
The addition of another well has the potential to significantly de-risk this further and provide additional cash flows. I see this as what could deliver the real gains with adjusting choke a secondary to this but something that could be achieved in the meantime. I'd like to see them follow the stages of de-risk project through other succesful wells, solidify cashflows and then expand cashflows. Expanding is a secondary effect of de-risking.
Good times ahead imo and as you sat condog, if the market over-reacts to an announcement stating the 6mm choke is still being used, could present a great buying opp.
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What did you mean by declines are insignificant, what declines were you talking about?
Just wondering because I didn't understand what you meant, Thanks.
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Decline in flow rates.
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Ok thanks.
So where it is between from current 5.29 mcfpd and if it reaches 10 mcfpd or above with the 9mm choke from Sorochynska 201 well, I wouldn't mind seeing 12 mcfpd.
But at end of day cash flow is already there to keep things good.
Performed good today so i suspect volatility one way or the other when they announce it. I wouldn't mind seeing them go hard and fast but maybe they will take a long term approach.
Great to watch the story unfold when you see such big forecast revenue and low operating costs, and hardly anyone notices it.
So where it is between from current 5.29 mcfpd and if it reaches 10 mcfpd or above with the 9mm choke from Sorochynska 201 well, I wouldn't mind seeing 12 mcfpd.
But at end of day cash flow is already there to keep things good.
Performed good today so i suspect volatility one way or the other when they announce it. I wouldn't mind seeing them go hard and fast but maybe they will take a long term approach.
Great to watch the story unfold when you see such big forecast revenue and low operating costs, and hardly anyone notices it.
From memory, the broadcast posted by Assassin on 8th March spoke about the company's intention to take time to surround themselves with the best people and to not rush their projects which I found to be a positive sign for lthe long term future of this company.
Every new well once flowing has well characteristics, one of those characteristics is the dry gas to condensate ratio. another is the decline profile. Lots of wells on reasonably small reservoirs will decline in the forst 30-120 days by anywhere up to 70,80% or so.
Newer drilling technologies and better targeting of the location of the wells, allow for better well charecteristics, which is exactly why HOG is able ot make these wells commercial, where as the previous Ukrain wells became uncommercial in the same reservoir.
Declines - means how much the well flow declines. Its generally measured in terms of 30 day declines, 60 day declines and 90 day declines. What we want is minimal declines. Some times if you let the wells flow too fast, you simply damage the well and create maintainance issues or permanent damage to the well.
For me the fact its still on a 6mm choke proves these operators are careful and know what they are doing. Your far better to flow it on a smaller choke and get to know the well characteristics, before just opening it up.
For example if they run it on a 6mm choke and get a specific decline in 30 days, they will learn a lot about the well. If they then throw it on a 9mm choke and 5 days later it begins declining, then they will know that they are damaging the well. they will quickly return to a smaller choke to preserve the integrity of the well.
Its common practice to learn a lot about your well and reservoir before opening it up. especially if its your first well into a reservoir. Good on them. Dont regard the 6mm as a problem.
They also need to play around with thier choke settings to experiment with thier liquids ratios, and see which size gives them the best EUR's (estimated ultimate recoveries) from the well. Theres no point gushig it on an open choke if its going to leave half the condnsate in the well.
Sure it will lower immediate cash flow, but in the grand scheme of things it is necesary practice to learn about the well and reservoir without causing damage. The will be hopefull and keen to get it on a 9mm choke, but not at the expenses of well dmage or not learning about their reservoir.
Take AUt for an example in the Eagleford, they have almost 20 wells on tap now with Hilcorp. They are also involved in an information sharing arrangment with all the other operators in the eagleford, which between them have hundreds of wells. Yet they are still experimenting with choke sizes, frac techniques and still getting better results all across the Eagle ford. So the fact these guys want to leave this on a smaller choke which is safest for the well till they learn a bit about it is good practice.
Newer drilling technologies and better targeting of the location of the wells, allow for better well charecteristics, which is exactly why HOG is able ot make these wells commercial, where as the previous Ukrain wells became uncommercial in the same reservoir.
Declines - means how much the well flow declines. Its generally measured in terms of 30 day declines, 60 day declines and 90 day declines. What we want is minimal declines. Some times if you let the wells flow too fast, you simply damage the well and create maintainance issues or permanent damage to the well.
For me the fact its still on a 6mm choke proves these operators are careful and know what they are doing. Your far better to flow it on a smaller choke and get to know the well characteristics, before just opening it up.
For example if they run it on a 6mm choke and get a specific decline in 30 days, they will learn a lot about the well. If they then throw it on a 9mm choke and 5 days later it begins declining, then they will know that they are damaging the well. they will quickly return to a smaller choke to preserve the integrity of the well.
Its common practice to learn a lot about your well and reservoir before opening it up. especially if its your first well into a reservoir. Good on them. Dont regard the 6mm as a problem.
They also need to play around with thier choke settings to experiment with thier liquids ratios, and see which size gives them the best EUR's (estimated ultimate recoveries) from the well. Theres no point gushig it on an open choke if its going to leave half the condnsate in the well.
Sure it will lower immediate cash flow, but in the grand scheme of things it is necesary practice to learn about the well and reservoir without causing damage. The will be hopefull and keen to get it on a 9mm choke, but not at the expenses of well dmage or not learning about their reservoir.
Take AUt for an example in the Eagleford, they have almost 20 wells on tap now with Hilcorp. They are also involved in an information sharing arrangment with all the other operators in the eagleford, which between them have hundreds of wells. Yet they are still experimenting with choke sizes, frac techniques and still getting better results all across the Eagle ford. So the fact these guys want to leave this on a smaller choke which is safest for the well till they learn a bit about it is good practice.
Gas price for Ukraine to go up 31% in 4th quarter of 2011
The price of Russian natural gas for Ukraine will increase 31 percent to 347 USD per 1 000 cubic meters in the fourth quarter compared to the first quarter, Ukrainian Energy and Coal Industry Minister Yury Boyko announced on Monday, according to RosBusinessConsulting.
According to him, Ukraine was paying 264 USD for 1 000 cubic meters of Russian natural gas in the first quarter of this year. The price will rise to 293 USD in Q2 and to 313 USD in Q3 on the back of higher oil prices.
"To deal with the situation, Ukraine purchased the maximum amount of gas in the first quarter at a relatively low price and intends to balance gas supplies during the entire year in order to prevent sharp gas price hikes for households and companies," he said. Such gas prices, which include a $100 discount, are still high for Ukraine, Boyko noted.
Ukraine intends to buy around 40 billion cubic meters (bcm) of Russian gas in 2011, up from 36.5bcm in 2010.
From : http://www.russia-media.ru/mainmore.php?tpl=Energy+News&iditem=384
Ukraine to Raise Natural Gas Prices for Households by 30 Percent
Ukraine’s government will raise the price of natural gas for households by 30 percent this year as the country seeks to qualify for an International Monetary Fund bailout loan, Prime Minister Mykola Azarov said.
The increase will help cut the budget deficit of state-run energy company NAK Naftogaz Ukrainy to 8.5 billion hryvnia ($1.07 billion), Azarov said yesterday in remarks broadcast by private TV channel Inter. Naftogaz’s budget will be balanced next year, Azarov said.
The country first turned to the IMF in 2008 after the global recession cut demand for its exports and the budget deficit swelled. The nation received $10.6 billion before payments were frozen when the government declined to cut spending before presidential elections at the start of 2010. The IMF approved a second lending program in July after Ukraine agreed to trim the shortfall and raise gas prices.
Ukraine raised the price of natural gas for households by 50 percent on Aug. 1, and said it would increase it more, according to the agreement.
Households now pay an average of 725 hryvnia per 1,000 cubic meters, compared with an average of $264 the country paid for imported Russian gas in the first quarter.
From: http://www.bloomberg.com/news/2011-...-gas-prices-for-households-by-30-percent.html
Price for RF gas for Ukraine to be at $347 per 1,000 cm by end of 2011
KIEV, March 14 (Itar-Tass) -- The price for Russia’s gas for Ukraine will be at 347 U.S. dollars per 1,000 cubic metres in October-December 2011, Ukrainian Minister of Energy and Coal Industry Yuri Boiko told a TV program on Monday.
“Proceeding from the formula, the gas price is 264 U.S. dollars per 1,000 cubic metres in January-March 2011; 293 U.S. dollars per 1,000 cubic metres in April-June; 313 U.S. dollars per 1,000 cubic metres in July-September and 347 U.S. dollars per 1,000 cubic metres in the fourth three months of the year,” he said, adding, “This is too big price, even with due account the 100-percent preference.”
In his words, the government will increase gas reserves in order to balance gas prices and prevent their skyrocketing for the population and enterprises.
“In order to prevent such a situation, we bought the maximum of natural gas in the first three months of the year, when the prices are lowest, in order to prevent the hike of gas prices for the public sector and plants,” the minister said.
On March 10, Deputy Minister of Energy and Coal Industry Vladimir Makukha said that the year’s average price for Russia’s gas for Ukraine may exceed 300 U.S. dollars per 1,000 cubic metres.
In his words, in the middle of April the national commission on energy regulation can made a decision to raise gas prices for the population.
Earlier, Head of Gazprom Sbyt Ukraine Anatoly Podmyshalsky said that the price for Russia’s gas for Ukraine will be at about 275 U.S. dollars per 1,000 cubic metres in April-June 2011.
In his words, the indicator stands at 264 U.S. dollars per 1,000 cubic metres in the first three months of the current year. By the end of the year, the price will amount to 280 U.S. dollars per 1,000 cubic metres.
Besides, Russia’s gas monopoly Gazprom will pay about 2.7 billion U.S. dollars for the transit of natural gas via Ukraine in 2011, as compared to 2.6 billion U.S. dollars in 2010, Prime Tass said, reaffirming that the gas transit cost 2.2 billion U.S. dollars in 2009.
According to Podmyshalsky, Ukraine’s investments in its own gas transportation network was at 212 million U.S. dollars in 2009, and the indicator grew a bit in 2010. In 2011, the country plans to investment in the project 300 million U.S. dollars.
Ukraine’s gas demand has dropped by ten percent over the recent five years, he said, adding that the supplies of Russia’s gas to Ukrainian consumers are planned at 40 billion cubic metres in 2011.
Proceeding from the Ukrainian government’s data, 36.473 billion cubic metres of Russia’s natural gas were used for the needs of Ukraine in 2010, Podmyshalksy said.
Gazprom Sbyt Ukraine is a subsidiary of Russia’s gas giant Gazprom. It is in charge of direct gas supplies to Ukraine’s industrial consumers.
From: http://www.itar-tass.com/eng/level2.html?NewsID=16045117&PageNum=0
The price of Russian natural gas for Ukraine will increase 31 percent to 347 USD per 1 000 cubic meters in the fourth quarter compared to the first quarter, Ukrainian Energy and Coal Industry Minister Yury Boyko announced on Monday, according to RosBusinessConsulting.
According to him, Ukraine was paying 264 USD for 1 000 cubic meters of Russian natural gas in the first quarter of this year. The price will rise to 293 USD in Q2 and to 313 USD in Q3 on the back of higher oil prices.
"To deal with the situation, Ukraine purchased the maximum amount of gas in the first quarter at a relatively low price and intends to balance gas supplies during the entire year in order to prevent sharp gas price hikes for households and companies," he said. Such gas prices, which include a $100 discount, are still high for Ukraine, Boyko noted.
Ukraine intends to buy around 40 billion cubic meters (bcm) of Russian gas in 2011, up from 36.5bcm in 2010.
From : http://www.russia-media.ru/mainmore.php?tpl=Energy+News&iditem=384
Ukraine to Raise Natural Gas Prices for Households by 30 Percent
Ukraine’s government will raise the price of natural gas for households by 30 percent this year as the country seeks to qualify for an International Monetary Fund bailout loan, Prime Minister Mykola Azarov said.
The increase will help cut the budget deficit of state-run energy company NAK Naftogaz Ukrainy to 8.5 billion hryvnia ($1.07 billion), Azarov said yesterday in remarks broadcast by private TV channel Inter. Naftogaz’s budget will be balanced next year, Azarov said.
The country first turned to the IMF in 2008 after the global recession cut demand for its exports and the budget deficit swelled. The nation received $10.6 billion before payments were frozen when the government declined to cut spending before presidential elections at the start of 2010. The IMF approved a second lending program in July after Ukraine agreed to trim the shortfall and raise gas prices.
Ukraine raised the price of natural gas for households by 50 percent on Aug. 1, and said it would increase it more, according to the agreement.
Households now pay an average of 725 hryvnia per 1,000 cubic meters, compared with an average of $264 the country paid for imported Russian gas in the first quarter.
From: http://www.bloomberg.com/news/2011-...-gas-prices-for-households-by-30-percent.html
Price for RF gas for Ukraine to be at $347 per 1,000 cm by end of 2011
KIEV, March 14 (Itar-Tass) -- The price for Russia’s gas for Ukraine will be at 347 U.S. dollars per 1,000 cubic metres in October-December 2011, Ukrainian Minister of Energy and Coal Industry Yuri Boiko told a TV program on Monday.
“Proceeding from the formula, the gas price is 264 U.S. dollars per 1,000 cubic metres in January-March 2011; 293 U.S. dollars per 1,000 cubic metres in April-June; 313 U.S. dollars per 1,000 cubic metres in July-September and 347 U.S. dollars per 1,000 cubic metres in the fourth three months of the year,” he said, adding, “This is too big price, even with due account the 100-percent preference.”
In his words, the government will increase gas reserves in order to balance gas prices and prevent their skyrocketing for the population and enterprises.
“In order to prevent such a situation, we bought the maximum of natural gas in the first three months of the year, when the prices are lowest, in order to prevent the hike of gas prices for the public sector and plants,” the minister said.
On March 10, Deputy Minister of Energy and Coal Industry Vladimir Makukha said that the year’s average price for Russia’s gas for Ukraine may exceed 300 U.S. dollars per 1,000 cubic metres.
In his words, in the middle of April the national commission on energy regulation can made a decision to raise gas prices for the population.
Earlier, Head of Gazprom Sbyt Ukraine Anatoly Podmyshalsky said that the price for Russia’s gas for Ukraine will be at about 275 U.S. dollars per 1,000 cubic metres in April-June 2011.
In his words, the indicator stands at 264 U.S. dollars per 1,000 cubic metres in the first three months of the current year. By the end of the year, the price will amount to 280 U.S. dollars per 1,000 cubic metres.
Besides, Russia’s gas monopoly Gazprom will pay about 2.7 billion U.S. dollars for the transit of natural gas via Ukraine in 2011, as compared to 2.6 billion U.S. dollars in 2010, Prime Tass said, reaffirming that the gas transit cost 2.2 billion U.S. dollars in 2009.
According to Podmyshalsky, Ukraine’s investments in its own gas transportation network was at 212 million U.S. dollars in 2009, and the indicator grew a bit in 2010. In 2011, the country plans to investment in the project 300 million U.S. dollars.
Ukraine’s gas demand has dropped by ten percent over the recent five years, he said, adding that the supplies of Russia’s gas to Ukrainian consumers are planned at 40 billion cubic metres in 2011.
Proceeding from the Ukrainian government’s data, 36.473 billion cubic metres of Russia’s natural gas were used for the needs of Ukraine in 2010, Podmyshalksy said.
Gazprom Sbyt Ukraine is a subsidiary of Russia’s gas giant Gazprom. It is in charge of direct gas supplies to Ukraine’s industrial consumers.
From: http://www.itar-tass.com/eng/level2.html?NewsID=16045117&PageNum=0
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What are the major risks for a company like HOG? They're already cashflow positive, I guess their future wells and projects could come up failures, which leave HOG stagnating, 'spending' it's revenue as it earns it on failed schemes. But what could send the SP plummeting to the floor? An accident at the first well? Explosion? Earthquake? Sabotage?
This is not a downramp as I'm very positive on HOG, just general thoughts about possible worse case scenarios in these small energy companies I'm seeking out to invest in, not even HOG specific I know
This is not a downramp as I'm very positive on HOG, just general thoughts about possible worse case scenarios in these small energy companies I'm seeking out to invest in, not even HOG specific I know
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A couple of great posts there Condog.
Thanks
Thanks
Meteor hits the site. SP -> 0 in one dayWhat are the major risks for a company like HOG? They're already cashflow positive, I guess their future wells and projects could come up failures, which leave HOG stagnating, 'spending' it's revenue as it earns it on failed schemes. But what could send the SP plummeting to the floor? An accident at the first well? Explosion? Earthquake? Sabotage?
This is not a downramp as I'm very positive on HOG, just general thoughts about possible worse case scenarios in these small energy companies I'm seeking out to invest in, not even HOG specific I know
.As the Fukushima incident has proven for any guy who was unlucky enough to be long a uranium exploration stock, you simply cannot factor these things into your individual stock purchase decisions. You can only factor the chance of these 'freak accidents' into whether you choose to buy stock at all, and how diversified you choose to make your asset portfolio. No one can predict a specific type of earthquake, a riot, a tsunami, a flood etc, only the risk of that general occurrence given the location.
Other than that, yes the new wells could turn out to be duds, and the Ukraine is not as politically safe as Aus or US,
6mm vs 9 or 12 mm choke
Initial testing of Well #201 showed they were able to run the well on a higher choke but if they run the well at a rate that is too high, they will be at risk of coning around the wellbore. This effectively means the upward movement of water and the down movement of gas –if the gas rate is high enough, the gas may pull water production from an underlying zone. Coning can seriously impact the well productivity and influence the degree of depletion and the overall recovery of the gas. They are aiming for full field drainage so they need to carefully control the gas flow to achieve this. So i see no problem @ all they are carefully trying to increase the producting without accidents.
We might take out 50 cents next week on possitive news.
Thats my vision on the story. Cheers from The Netherlands.
Initial testing of Well #201 showed they were able to run the well on a higher choke but if they run the well at a rate that is too high, they will be at risk of coning around the wellbore. This effectively means the upward movement of water and the down movement of gas –if the gas rate is high enough, the gas may pull water production from an underlying zone. Coning can seriously impact the well productivity and influence the degree of depletion and the overall recovery of the gas. They are aiming for full field drainage so they need to carefully control the gas flow to achieve this. So i see no problem @ all they are carefully trying to increase the producting without accidents.
We might take out 50 cents next week on possitive news.
Thats my vision on the story. Cheers from The Netherlands.
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Should be in the next day or 2 then I suppose.
I am not expecting much difference as predicted just confirmation of the flow rates with the bigger choke.
This will increase confidence and would expect to push the sp through 50 cents quite quick.
If the second and third well go alright by later in year with similar results it may go exponential.
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Announcement confirms 40mill p/a revenue. Can this piggy fly now?
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Again, you have been detected as a goose, read the announcement.
I thought the announcement was great. Dismissed concerns about the 6mm choke still being used and also any worries about flows dropping from using the greater choke.
Spudding next month at Chernetska (think thats spelt right) so hopefully more revenue to come on board later this year.
Its sounding great at the moment, lets hope management can keep it up.
Spudding next month at Chernetska (think thats spelt right) so hopefully more revenue to come on board later this year.
Its sounding great at the moment, lets hope management can keep it up.
Production commenced on February 17 with the well running on a 6mm choke producing flow rates of 5.29 million cubic feet per day (mmcfpd) and 176 barrels of condensate per day. The process of integrating the Company’s new production facilities with the existing infrastructure at the local plant has progressed well. The choke size has been progressively increased as bottlenecks in the production facilities have been fixed. Over the weekend, the choke size was increased to 8mm and the well is now producing flow rates of 7.51 million cubic feet of gas per day (mmcfpd) and 300 barrels of condensate per day. The buffer pressure at the wellhead has remained constant at 3,400 psi and the inlet pressure at the gas plant has also remained constant at 1,200 psi. The Company expects the choke size to increase again once the gas plant is running at its optimum level.
I'm not going to pretend I understand this completely. However, based on your previous posts condog i'm assuming this is a very positive announcement? Choke size has been increased. Flow of gas and condensate has increased despite the larger choke? Im new to all this so please correct me if i'm wrong.
I'm not going to pretend I understand this completely. However, based on your previous posts condog i'm assuming this is a very positive announcement? Choke size has been increased. Flow of gas and condensate has increased despite the larger choke? Im new to all this so please correct me if i'm wrong.
