TIDMUKOG
RNS Number : 8908Q
UK Oil & Gas Investments PLC
05 December 2016
5 December 2016
UK Oil & Gas Investments PLC
("UKOG" or the "Company")
PEDL234 Licence, Drilling Plans & Oil in Place Update,
Central Weald Basin, UK
Highlights
-- Kimmeridge Oil & Gas Limited plans first-half 2017
Broadford Bridge-1 exploratory well to test naturally-fractured
Kimmeridge Limestone reservoirs as proven at Horse Hill-1
-- Within PEDL234, Nutech calculates a P50 Kimmeridge Clay
Formation ("KCF") oil in place ("OIP") of 7.12 billion barrels
("BBO"), of which 1.71 BBO lies within Kimmeridge Limestones
-- PEDL234 increases gross attributable P50 KCF OIP within
UKOG's licence interests in the Weald by 72%, from 9.95 BBO to
17.10 BBO, representing approximately 21% of Nutech's calculated
Weald Basin-wide P50 KCF OIP of 81.95 BBO as announced in October
2015
-- PEDL234 significantly increases net attributable P50
Kimmeridge Limestone OIP within UKOG's licence interests in the
Weald Basin by 348%, from 0.54 BBO to 2.41 BB
UK Oil & Gas Investments PLC (LSE AIM/ISDX: UKOG) announces
that Kimmeridge Oil & Gas Limited ("KOGL"), has informed the
Company that analysis by US petrophysical specialists Nutech,
calculates that a most likely or P50 OIP value of 1.713 BBO lies
within the Kimmeridge Limestone ("KL") reservoirs underlying its
300 sq km Weald Basin licence PEDL234 ("Licence"). As previously
reported, these naturally-fractured limestones flowed oil at an
aggregate stabilised flow rate of 1,365 barrels per day ("bopd")
from the Horse Hill-1 ("HH-1") well, in which the Company has a
31.2% interest. HH-1 is located 17 km to the north-west of the
Licence. The entire KCF within the Licence is calculated to contain
a total gross P50 OIP of 7.120 BBO. The Company, via its ownership
of KOGL, holds a 100% interest in the Licence.
With the acquisition of the Licence, together with the purchase
of increased ownership in Horse Hill (PEDL137 & PEDL246) and
Holmwood (PEDL143), the Company's estimated net attributable P50
total KL OIP within its licence interests in the Weald Basin, has
increased by 348% since October 2015, from 0.539 BBO to 2.414 BBO.
Similarly, the Company's estimated net attributable P50 KF OIP has
increased by 315% from 2.368 BBO reported in October 2015 to 9.831
BBO.
The gross P50 KL OIP contained within the Company's licence
interests in the Weald Basin increased by 82%, from 2.098 BBO
reported in October 2015 to 3.811 BBO. Similarly the gross KCF OIP
increases by 72%, from 9.952 BBO reported in October 2015 to 17.072
BBO. As illustrated in Table 2, below, this gross P50 KCF
represents approximately 21% of Nutech's Weald Basin-wide KCF P50
of 81.915 BBO as estimated and announced on 21 October 2015.
The results of Nutech's analysis are illustrated in Tables 1 and
2 below.
Nutech's OIP numbers should be regarded as Total
Petroleum-Initially-in-Place, as defined by the Society of
Petroleum Engineer's Petroleum Resource Management System of
resource reporting (see glossary).
As previously stated by the Company, it is emphasised that the
above estimated OIP volumes should not be construed as recoverable
resources, contingent or prospective resources, or reserves.
Table 1: PEDL234 Kimmeridge OIP in Billions of Barrels
Geological P90 OIP P50 OIP (BBO) P10 OIP (BBO)
Unit (BBO)
------------------ -------- -------------- --------------
Kimmeridge
Limestones 0.710 1.713 3.382
------------------ -------- -------------- --------------
Kimmeridge
Shales 2.448 5.406 10.335
------------------ -------- -------------- --------------
TOTAL KIMMERIDGE
CLAY FM 3.158 7.120 13.717
------------------ -------- -------------- --------------
Table 2: Company Licence interests in the Weald Basin,
Kimmeridge Oil in Place in Billions of Barrels
Geological Company Net Company Gross Total
Unit Attributable Licence Holding Weald
Licence holding OIP (1) BBO Basin-wide
OIP (2) BBO OIP (3)
BBO
------------------ ----------------------- ------------------------ ------------
P90 P50 P10 P90 P50 P10 P50
------------------ ------ ------ ------- ------ ------- ------- ------------
Kimmeridge
Limestones 1.078 2.414 4.555 1.811 3.811 6.918 19.476
------------------ ------ ------ ------- ------ ------- ------- ------------
Kimmeridge
Shales 3.155 7.417 12.529 6.252 13.261 23.439 62.439
------------------ ------ ------ ------- ------ ------- ------- ------------
TOTAL KIMMERIDGE
CLAY FM 4.233 9.831 17.084 8.063 17.072 30.357 81.915
------------------ ------ ------ ------- ------ ------- ------- ------------
Notes:
(1) total aggregate OIP within 9 UKOG interest Weald Basin
licences covering 672 sq km, namely: PEDL137, PEDL246, PEDL234,
PEDL143, PEDL233, PEDL126, PEDL070, PL235, PL211, within which UKOG
has varying economic interests (see notes to editors for details).
These 9 licences represent the Company's total licence and economic
interests within the AOI detailed in note (3) below. Note that with
the exception of PEDL234, the gross OIP utilised is as calculated
and reported by Nutech in October 2015
(2) net attributable equals the calculated gross OIP in each
licence multiplied by % working interest in that licence and
aggregated over the 9 Licences specified in note (1) above.
(3) as calculated by Nutech and reported in October 2015
covering a 1261 sq mile Weald-wide Area of Interest (AOI) which
includes the 9 licences detailed in (1) above and areas in which
the Company has no licence or economic interests
Nutech Analysis
The calculated OIP values, shown in the tables above, were
derived and extracted from a comprehensive revision to the Weald
Basin-wide regional petrophysical and OIP model previously reported
in October 2015. The model, utilising 85 wells over 1,261 sq miles
of the Weald Basin, now incorporates a seismic-derived geological
framework, plus a revised petrophysical analysis of key wells. Key
learnings from the successful Horse Hill Portland and KL flow
tests, reported in February and March 2016, have been
incorporated.
PEDL234 Drilling Plans
KOGL now plan to drill the BB-1 well, located in the southern
sector of the Licence during the first half of 2017. BB-1 is a
deviated well designed to test naturally fractured conventional KL
reservoirs within a "mirror-image" of the geological feature
containing the proven Horse Hill Kimmeridge oil accumulation. As
previously reported, the well site is constructed and the necessary
planning and Environment Agency consents to drill are in place.
A further well is also planned, subject to normal regulatory
approvals, before mid-2018, to test the eastern extension of the
Godley Bridge Portland Sandstone gas discovery and an underlying KL
oil prospect which is geologically analogous to the Company's
Holmwood prospect, due to be drilled in 2017.
KOGL and the Licence
KOGL, a wholly owned subsidiary of UKOG, is the operator and
100% working interest holder of the Licence. As reported in June
and August 2016, the Licence, the drilling site and regulatory
permissions to drill, were acquired by the Company via the
acquisition of the interests of Celtique Energie Weald Limited and
Magellan Petroleum (UK) Limited.
The Licence straddles the Weald's Upper Jurassic basin centre
and contains a thicker overall Kimmeridge section than seen
underlying the Horse Hill licences. Numerous undrilled structural
closures at Portland, Kimmeridge, Great Oolite and Triassic
reservoir levels are mapped within the Licence.
The BB-1 target is, in UKOG's view, a lookalike to both the HH-1
oil discovery and the nearby Balcombe-1 oil discovery ("BC-1"),
following the same overall structural trends. The BC-1, drilled in
1986, recovered 48 barrels of oil in one day from what the Company
interprets to be the same naturally fractured KL reservoir unit
which, as reported in February 2015, flowed at a stable rate of 901
bopd from HH-1. The recovered BC-1 KL oil was typed to a KCF shale
source rock by Burwood et al in 1991 .
KOGL also map an extension into PEDL234 of the 1983 Godley
Bridge-1 Portland sandstone gas discovery. Nutech's analysis of
GB-1 indicates that the KL underlying the Portland gas accumulation
are naturally fractured and contain a calculated OIP of the same
magnitude as HH-1. As previously stated, KOGL now plans to commence
drilling an exploration well prior to mid-2018 to test both the KL
and further appraise the Portland gas discovery.
The results of Xodus' evaluation of the Godley Bridge Portland
gas in place and recoverable resources are expected in due
course.
Stephen Sanderson, UKOG's Executive Chairman, commented:
"The Nutech analysis securely underpins our rationale for the
Licence acquisition and BB-1 drilling plans in 2017. This study,
and the resultant four-fold increase in the Company's net
Kimmeridge oil in the ground, clearly highlights PEDL234 as a
potential flagship asset to sit alongside Horse Hill.
The BB-1 well is designed not only to test a geological
mirror-image of the Horse Hill Kimmeridge oil discovery, but, more
significantly, to also seek to establish whether Kimmeridge
Limestone oil is truly an extensive resource play. If so proven,
given the sheer size of the PEDL234 Licence, our 100% interest, and
the existence of further multiple identified drilling targets, the
impact of BB-1 success would likely be transformational.
Our wider strategy over the forthcoming 18-24 months aims to
de-risk the overall Kimmeridge Limestone oil play, both
commercially and geographically. Through the planned extended
production testing, sidetrack and new well at Horse Hill, the goal
is to establish that the Kimmeridge can be brought into commercial
production. In parallel, our three-well exploration programme of
BB-1, Holmwood-1 and an additional PEDL234 well, also aims to
demonstrate that Horse Hill success can be replicated over the
central "sweet-spot" of the Weald Basin. We look forward to this
journey and eagerly await the start of BB-1 in the first half of
2017."
Qualified Person's Statement:
Stephen Sanderson, UKOG's Executive Chairman, who has over 35
years of relevant experience in the oil industry, has approved the
information contained in this announcement. Mr Sanderson is a
Fellow of the Geological Society of London and is an active member
of the American Association of Petroleum Geologists.
For further information, please contact:
UK Oil & Gas Investments PLC
Stephen Sanderson / Kiran Morzaria Tel: 020 7440 0640
WH Ireland (Nominated Adviser and Broker)
James Joyce / James Bavister Tel: 020 7220 1666
Square 1 Consulting (Public Relations)
Brian Alexander / David Bick Tel: 020 7929 5599
Glossary:
deviated well a well that during drilling is steered
away from the vertical
----------------------------------- --------------------------------------------------------
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 production a flow test, or extended well test,
test as per the permission granted by
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
----------------------------------- --------------------------------------------------------
gas in place the quantity of gas that is estimated
to exist originally in naturally
occurring accumulations in the ground
before any extraction or production
----------------------------------- --------------------------------------------------------
gross oil 100% of oil in place, without taking
in place into account the Company's ownership
interest
----------------------------------- --------------------------------------------------------
limestone a sedimentary rock predominantly
composed of calcite (a crystalline
mineral form of calcium carbonate)
of organic, chemical or detrital
origin. Minor amounts of dolomite,
chert and clay are common in limestones.
Chalk is a form of fine-grained
limestone
----------------------------------- --------------------------------------------------------
naturally a petroleum reservoir rock containing
fractured tectonically induced open fractures,
reservoirs joints and fissures which are filled
with petroleum. The petroleum filled
fractures can provide essential
reservoir porosity and permeability,
essential permeability only, or
provide a permeability enhancement
alone. Such reservoirs have been
created over geological time by
nature, not man-made via hydraulic
fracturing
----------------------------------- --------------------------------------------------------
oil (or petroleum) the quantity of oil (or petroleum)
in the ground that is estimated to exist originally
or oil (or in naturally occurring accumulations
petroleum) in the ground before any extraction
in place or production
----------------------------------- --------------------------------------------------------
P10 (high a 10% probability that a stated
estimate) volume will be equalled or exceeded
----------------------------------- --------------------------------------------------------
P50 (best a 50% probability that a stated
estimate) volume will be equalled or exceeded
----------------------------------- --------------------------------------------------------
P90 (low estimate) a 90% probability that a stated
volume will be equalled or exceeded
----------------------------------- --------------------------------------------------------
petrophysics the study of physical and chemical
rock properties and their interactions
with fluids utilising electric logs,
physical rock and fluid measurements
----------------------------------- --------------------------------------------------------
play a set of known or postulated oil
and or gas accumulations sharing
similar
geologic, geographic, and temporal
properties, such as source rock,
migration pathways, timing, trapping
mechanism, and hydrocarbon type
----------------------------------- --------------------------------------------------------
prospect a project associated with a potential
accumulation that is sufficiently
well defined to represent a viable
drilling target
----------------------------------- --------------------------------------------------------
recoverable those quantities of petroleum (oil
resources in this case) 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 categorized
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
----------------------------------- --------------------------------------------------------
resource play a play where trapped petroleum accumulations
are expected to be pervasive throughout
a large area and that are not significantly
affected by hydrodynamic influences
(also called "continuous-type deposits")
----------------------------------- --------------------------------------------------------
sandstone a clastic sedimentary rock whose
grains are predominantly sand-sized.
The term is commonly used to imply
consolidated sand or a rock made
of predominantly quartz sand
----------------------------------- --------------------------------------------------------
seismic a method utilising the common mid-point
technique, by which the reflections
of sound waves transmitted into
the earth are collected and processed
into an image which can be interpreted
into a cross section of the earth's
crust.
----------------------------------- --------------------------------------------------------
shale a laminated and fissile very fine-grained
sedimentary rock, consisting of
compacted silt and clay-size mineral
particles. Can contain high proportions
of organic material, which if subjected
to heat and pressure over geological
time can generate petroleum (a petroleum
source rock)
----------------------------------- --------------------------------------------------------
sidetrack re-entry of a well from the well's
surface location with drilling equipment
for the purpose of deviating from
the existing well bore to achieve
production or well data from an
alternative zone or bottom hole
location, or to remedy an engineering
problem encountered in the existing
well bore.
----------------------------------- --------------------------------------------------------
source rock a laminated and fissile very fine-grained
sedimentary rock, consisting of
compacted silt and clay-size mineral
particles. Can contain high proportions
of organic material, which if subjected
to heat and pressure over geological
time can generate petroleum (a petroleum
source rock).
----------------------------------- --------------------------------------------------------
Total Petroleum-initially-in-place is that quantity of petroleum which
is estimated to exist originally
in naturally occurring accumulations.
Total Petroleum-initially-in-place
is, therefore, that quantity of
petroleum which is estimated, on
a given date, to be contained in
known accumulations, plus those
quantities already produced therefrom,
plus those estimated quantities
in accumulations yet to be discovered.
Total Petroleum-initially-in-place
may be subdivided into Discovered
Petroleum-initially-in-place and
Undiscovered Petroleum-initially-in-place,
with Discovered Petroleum-initially-in-place
being limited to known accumulations.
It is recognized that all Petroleum-initially-in-place
quantities may constitute potentially
recoverable resources since the
estimation of the proportion which
may be recoverable can be subject
to significant uncertainty and will
change with variations in commercial
circumstances, technological developments
and data availability. A portion
of those quantities classified as
Unrecoverable may become recoverable
resources in the future as commercial
circumstances change, technological
developments occur, or additional
data are acquired.
----------------------------------- --------------------------------------------------------
Notes to Editors:
R. Burwood, J. Staffurth, L. de Walque and S.M. De Witte 1991.
Petroleum geochemistry of the Weald-Wessex Basin of southern
England: a problem in source-oil correlation.
About Nutech
Nutech (www.nutechenergy.com) is a global oil services company
specialising in petrophysics, reservoir evaluation and reservoir
optimisation at all stages of the exploration and production
life-cycle.
Company Shareholding in Angus Energy
Further to Angus Energy PLC's admission to AIM and the
associated issue of equity the Company's shareholding in Angus is
now 2.79%.
UKOG Licence Interests
The Company has interests in the following UK licences:
Asset Licence UKOG's Licence Operator Area Status
Interest Holder (km(2)
)
------------ --------- ---------- ------------------- ------------------- -------- --------------------------
Avington UKOG (GB) IGas Energy Field in stable
(1) PEDL070 5% Limited Plc 18.3 production
------------ --------- ---------- ------------------- ------------------- -------- --------------------------
Reviewing
economics
of appraisal/development
Baxters well. Licence
Copse UKOG Weald IGas Energy extended to
(2) PEDL233 50% Limited Plc 89.6 2018
------------ --------- ---------- ------------------- ------------------- -------- --------------------------
Kimmeridge Kimmeridge BB-1 well
Broadford Oil & Oil & permitted,
Bridge Gas Limited Gas Limited expected 2017
(3) PEDL234 100% (4) (4) 300.0 spud date.
------------ --------- ---------- ------------------- ------------------- -------- --------------------------
EA permission
obtained to
drill B-4x
Angus Angus sidetrack,
Brockham Energy Energy HSE, OGA approval
(1) PL235 1.5% (6) (6) 8.9 pending
------------ --------- ---------- ------------------- ------------------- -------- --------------------------
Europa Holmwood-1
Oil & exploration
Holmwood Gas (Holdings) well spud
(3) PEDL143 30% UKOG plc 91.8 expected 2017
------------ --------- ---------- ------------------- ------------------- -------- --------------------------
Horndean UKOG (GB) IGas Energy Field in stable
(1) PL211 10% Limited Plc 27.3 production
------------ --------- ---------- ------------------- ------------------- -------- --------------------------
Submitted
planning application
for long term
Horse Horse Horse production
Hill Hill Developments Hill Developments tests and
(5) PEDL137 31.2% Ltd (7) Ltd (7) 99.3 2 wells
-------- --------------------------
Horse Horse Horse
Hill Hill Developments Hill Developments
(5) PEDL246 31.2% Ltd (7) Ltd (7) 43.6 As above
------------ --------- ---------- ------------------- ------------------- -------- --------------------------
Isle
of Wight Preparing
(Offshore) UKOG Solent UKOG Solent drilling planning
(3) P1916 100% Limited Limited 46.7 submission
------------
Isle
of Wight Preparing
(Onshore) drilling planning
(2, 3) PEDL331 65% UKOG TBA 200.0 submission
------------ --------- ---------- ------------------- ------------------- -------- --------------------------
Angus Angus Drilling of
Lidsey Energy Energy infill well
(1) PL241 1.4% (6) (6) 5.3 being considered
------------ --------- ---------- ------------------- ------------------- -------- --------------------------
Submitted
planning application
Markwells for appraisal
Wood UKOG (GB) UKOG (GB) and field
(2) PEDL126 100% Limited Limited 11.2 development
------------ --------- ---------- ------------------- ------------------- -------- --------------------------
Notes:
1. Oil field currently in production.
2. Oil discovery pending development and/or appraisal
drilling.
3. Exploration asset with drillable prospects and leads.
4. UKOG has a 100% interest in Kimmeridge Oil & Gas Limited,
which has a 100% interest in PEDL234.
5. Oil discovery with recently completed flow testing.
6. UKOG has a 2.79% interest in Angus Energy, which has a 50%
interest in Lidsey and a 55% interest in Brockham.
7. UKOG has a direct 48% interest in HHDL, which has a 65%
interest in PEDL137 and PEDL246.
This information is provided by RNS
The company news service from the London Stock Exchange
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