TIDMALBA
RNS Number : 4086E
Alba Mineral Resources PLC
18 October 2018
Alba Mineral Resources plc
("Alba" or the "Company")
Horse Hill Portland Oil Field Declared Commercially Viable
Horse Hill-1 ("HH-1") Portland and Kimmeridge Oil Discovery,
Weald Basin, UK
Alba (AIM: ALBA), the diversified mineral exploration and
development company, is pleased to announce that it has been
informed by Horse Hill Developments Ltd ("HHDL" or the "Operator"),
the operator of the Horse Hill-1 ("HH-1") Kimmeridge and Portland
oil discovery located in licence PEDL137, that, following the
successful Portland Extended Well Test ("EWT") programme, it now
considers the Portland oil field to be commercially viable.
Alba holds an 11.765% beneficial interest in licence PEDL137 and
adjoining licence PEDL246.
Alba is advised by the Operator that it is now targeting the
start-up of long term Portland oil production during 2019, subject
to the grant of necessary regulatory consents. The first future
horizontal production well, HH-2, for which planning and
Environment Agency consents are in place, is planned to be drilled
in early 2019.
Alba is further advised by the Operator as follows:
-- Following analysis of EWT results and economic modelling of
HHDL's and Xodus Group's ("Xodus") forecast oil production
profiles, HHDL now considers the Portland oil field to be
commercially viable. Work is now underway towards a targeted
long-term production start-up in 2019.
-- HHDL currently envisages the Portland field development plan
to consist of up to 3 production wells and up to 2 pressure support
wells.
-- A planning application for Portland and Kimmeridge field
development is nearing completion and is targeted for submission to
Surrey County Council ("SCC") before year-end.
-- Xodus' calculated future Portland oil production profiles,
based upon observed pressure and volumetric data from the EWT, show
that oil recoveries of up to 45% of connected Oil in Place could be
attained if a successful full voidage replacement pressure support
scheme is incorporated into the field's development.*
-- The Portland field's first new horizontal production well,
HH-2, which has SCC planning and Environment Agency consents, is
planned to spud in early 2019 following completion of the
Kimmeridge Limestone 4 EWT.
-- As reported on 10 September, the HH-2 horizontal well has a
targeted* sustainable daily Portland production rate of two to
three times the forecast potential HH-1 vertical well rate of 362
barrels of oil ("bopd")*.
-- Following submission of the planning application, Xodus' 2018
Portland Competent Persons Report will be updated to include
recoverable reserves and net present values of cash flows
associated with the envisaged Portland oil field development.
Note: * There can be no guarantee that forecast, targeted or
calculated rates of production or oil recoveries will be achieved.
The ultimate recoveries will depend upon actual reservoir
performance over time and the actual efficiency of voidage
replacement.
George Frangeskides, Alba's Executive Chairman, commented:
"The Operator's confidence in the viability of the Portland
sandstone at Horse Hill is demonstrated by its stated objective to
submit a planning application for Portland and Kimmeridge field
development by the end of the year. We look forward to providing
our continued support as HHDL seeks to rapidly progress the Horse
Hill Project out of the exploration phase and into the development
and production phases in the coming year."
Qualified Person's Statement
The technical information contained in this announcement has
been reviewed and approved by Feroz Sultan (B.Sc (Hons) Geology,
M.Sc, Petroleum and Structural Geology, Karachi and M.Sc Petroleum
Geology, Imperial College London), a petroleum geologist with over
45 years' experience in the management, exploration, development
and production of oil and gas.
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014.
For further information please contact:
Alba Mineral Resources plc
George Frangeskides, Executive Chairman +44 20 7264 4366
Cairn Financial Advisers LLP (Nomad)
James Caithie / Liam Murray +44 20 7213 0880
First Equity Limited (Broker)
Jason Robertson +44 20 7374 2212
Yellow Jersey PR (Financial PR/
IR)
Tim Thompson / Harriet Jackson
alba@yellowjerseypr.com +44 77 1071 8649
Glossary
depletion-drive a natural mechanism whereby the differential pressure
between the wellbore and reservoir permits dissolved
solution gas to expand and become an energy support
to create oil flow into a well. It is also known
as solution gas drive or dissolved gas drive.
connected oil a volume of OIP that is demonstrated by collected
in place pressure and flow data to be directly accessed
and drained by a well during production. Only
part (or a fraction) of the volume, known as the
recoverable volume, will normally be recovered
to surface during oil production. The percentage
of the recoverable volume compared to the total
connected OIP is known as the recovery factor.
---------------------------------------------------------
discovery a discovery is a petroleum accumulation for which
one or several exploratory wells have established
through testing, sampling and/or logging the existence
of a significant quantity of potentially moveable
hydrocarbons
---------------------------------------------------------
extended well a well test, as per the permission granted by
test the Oil and Gas Authority, with an aggregate flow
period duration over all zones of greater than
96 hours and up to 90 days maximum
---------------------------------------------------------
flow test a flow test or well test involves testing a well
by flowing hydrocarbons to surface, typically
through a test separator. Key measured parameters
are oil and gas flow rates, downhole pressure
and surface pressure. The overall objective is
to identify the well's capacity to produce hydrocarbons
at a commercial flow rate
---------------------------------------------------------
horizontal well a well that during drilling is steered so as to
be at or close to 90 degrees from the vertical
to follow a particular geological stratum or reservoir
unit
---------------------------------------------------------
oil in place the quantity of oil or petroleum that is estimated
("OIP") to exist in naturally occurring accumulations.
---------------------------------------------------------
pressure support maintenance of reservoir pressure as close to
or voidage replacement virgin reservoir pressure as possible and above
bubble point via injection of saline formation
water into the reservoir. The injected water increases
oil recovery via maintaining maximum depletion
drive energy (see above) and displacing oil from
reservoir pores towards the wellbore. The mechanism
is also referred to as voidage replacement. Full
pressure support or "full voidage replacement"
means that the overall volume of saline formation
water injected is equal to the volume of oil extracted.
---------------------------------------------------------
recoverable those quantities of petroleum (oil in this case)
volumes or resources estimated, as of a given date, to be potentially
recoverable from known accumulations
---------------------------------------------------------
reserves those quantities of petroleum anticipated to be
commercially recoverable by application of development
projects to known accumulations from a given date
forward under defined conditions. Reserves must
further satisfy four criteria: they must be discovered,
recoverable, commercial, and remaining (as of
the evaluation date) based on the development
project(s) applied. Reserves are further categorised
in accordance with the level of certainty associated
with the estimates and may be sub-classified based
on project maturity and/or characterised by development
and production status
---------------------------------------------------------
Alba's Project & Investment Portfolio
Mining
Amitsoq (Graphite, Greenland): Alba owns a 90 per cent interest
in the Amitsoq Graphite Project in Southern Greenland and has an
option over the remaining 10 per cent.
Clogau (Gold, Wales): Alba owns a 90 per cent interest in Gold
Mines of Wales Limited ("GMOW"), the ultimate owner of the Clogau
Gold project situated in the Dolgellau Gold Belt in Wales.
Inglefield Land (Copper, Cobalt, Gold): Alba owns 100 per cent
of mineral exploration licence 2017/40 in north-west Greenland.
Limerick (Base Metals, Ireland): Alba owns 100 per cent of the
Limerick base metal project in the Republic of Ireland.
Melville Bay (Iron Ore, Greenland): Alba is entitled to a 51 per
cent interest in mineral exploration licence 2017/41 in Melville
Bay, north-west Greenland. The licence area benefits from an
existing inferred JORC resource of 67 Mt @ 31.4% Fe.
Thule Black Sands (Ilmenite, Greenland): Alba owns 100 per cent
of mineral exploration licences 2017/29 and 2017/39 in the Thule
region, north-west Greenland.
Oil & Gas
Brockham (Oil & Gas, UK): Alba has a direct 5 per cent
interest in Production Licence 235, which comprises the previously
producing onshore Brockham Oil Field.
Horse Hill (Oil & Gas, UK): Alba holds a 18.1 per cent
interest in Horse Hill Developments Limited, the company which has
a 65 per cent participating interest and operatorship of the Horse
Hill oil and gas project (licences PEDL 137 and PEDL 246 covering a
total area of 142.9 km(2)) in the UK Weald Basin.
Web: www.albamineralresources.com
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END
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