Yesterday UKOG requested for voluntary suspension which caught many off guard. During the period of suspension, there were a host of positive and negative speculations offered as reason(s) for the suspension. On the night before, UKOG rose 18%.
Here, I would like to share with you my analysis:
1) Never believe in any speculations. Speculators are NOT privy to the company's reason(s)
2) UKOG's shares went up 18% prior to the suspension. Hence, any news before resumption of trading ought to be good.
3) Prior to the suspension there was no indication of an impending problem or issue which could damage the company's growth or prospects.
That is why it is important to know the company you invested in.
Today, UKOG announced that Schlumberger, a world renowned oil services company, estimated that the Upper Portland holds 16 million barrels of oil in place per sq mile whereas the Kimmeridge Clay holds 255 million barrels of oil in place. This works out to almost 15 billion barrels of oil in place in the licence area vs an earlier estimate by NUTECH which amounted to 8.5 billion barrels of oil in place.
This is indeed a huge upgrade of the resources. Still UKOG needs to conduct a flow test to estimate the amount oil recoverable from the Horse Hill area.
My disclosure: I am long UKOG.
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