TIDMUKOG
RNS Number : 4581B
UK Oil & Gas Investments PLC
04 April 2017
UK Oil & Gas Investments PLC
("UKOG" or the "Company")
OGA Agrees Work Programme and Extends Retention Area Periods for
Horse Hill Licences, Weald Basin, SE UK
UK Oil & Gas Investments PLC (London AIM & NEX: UKOG)
announces that it has been informed by the operator, Horse Hill
Developments Ltd ("HHDL"), that the Oil and Gas Authority ("OGA")
has consented to extend the current PEDL137 and PEDL246 Retention
Areas ("RAs") until 2021. The PEDL137 and PEDL246 RAs, which cover
the entirety of the licences, will now expire on 30(th) September
and 30(th) June 2021, respectively. The Company holds a 31.2% net
interest in the licences via its 48% ownership of the licence's
operator HHDL.
The RA work programmes, now agreed with OGA, comprise; the
planned Horse Hill-1 ("HH-1") Kimmeridge and Portland production
tests, HH-1z Kimmeridge Limestone ("KL") and HH-2 Portland
appraisal wells, 50 km(2) of 3D seismic, 25 km of 2D seismic and a
PEDL246 exploration step-out well. The RAs for each licence can be
further extended or modified subject to an ongoing minimum work
programme agreed by the OGA.
Stephen Sanderson, UKOG's Executive Chairman, commented:
"The revised RA expiry dates ensure that the knowledge gained
from the Company's forthcoming extensive 2017 Broadford Bridge,
Horse Hill and Holmwood drilling and test campaign, can be fully
incorporated into future Kimmeridge Limestone step-out wells in
PEDL246 and PEDL137. 2017 is set to become a pivotal year for the
Company."
HH-1 Oil Discovery (UKOG interest 31.2%)
The HH-1 Kimmeridge Limestone and Portland oil discovery well is
located within onshore exploration Licence PEDL137, on the northern
side of the Weald Basin, 3 km north of Gatwick Airport. As
previously reported in February and March 2016, two
naturally-fractured limestone members within the Kimmeridge
section, known as KL3 and KL4, flowed dry, 40-degree API oil, at an
aggregate stabilised natural flow rate of 1,365 barrels per day
("bopd") with no clear indication of depletion. The overlying
Portland flowed dry, 35-degree API gravity oil at a stable pumped
rate of 323 bopd. The Portland oil was produced at the rod-pump's
maximum achievable rate and thus flow was constrained by the pump's
mechanical capacity.
As previously reported in October 2016 and February 2017, an
application for long term production testing and further appraisal
drilling was submitted to Surrey County Council in October 2016,
and is now scheduled to be decided at the Council's planning
committee meeting in July 2017. The Company therefore envisages
that these operations will commence in the second half of 2017 upon
grant of the necessary remaining regulatory permissions.
Broadford Bridge-1 Exploration well (UKOG interest 100%)
The Broadford Bridge-1 ("BB-1"), planned to commence in Q2 2017,
will be a deviated or "slant" well, drilled to a true-vertical
depth of approximately 1,300 metres. The well is designed to
penetrate four naturally-fractured Kimmeridge Limestone reservoirs
(KL1-KL4) on the southern flank of the Weald Basin, within a
mirror-image of the Horse Hill fault block. The Kimmeridge section
is planned to be drilled at an angle of approximately 50 degrees to
vertical and approximately orthogonal to the predicted direction of
open natural fractures within the Kimmeridge Limestones.
Operations will include the acquisition of an extensive coring,
electric log and borehole imaging data set to provide further key
information on the limestone reservoirs and natural fracturing. All
pre-drill tenders have been received and a drilling rig chosen. The
civil construction works necessary to commence drilling have been
completed. Planning permission to drill the well was granted by
West Sussex County Council in 2013 and includes the ability to flow
test the well for up to 14 weeks.
The well will use safe, tried and tested conventional oil field
techniques, approved by the Environment Agency and Health and
Safety Directorate, and as used at Horse Hill in Surrey in 2014 and
2016 and by 84 legacy wells. As previously reported in March 2017,
BB-1 will be drilled utilising a British manufactured, natural,
biodegradable drilling fluid. This zero-hazard drilling fluid (or
"mud") will ensure that there can be zero contamination of any
groundwater via the drilling process.
The drilling fluid, also used by water well drilling companies
in the UK, is registered with the Centre for Environment, Fisheries
and Aquaculture Science (CEFAS). It is also the only drilling fluid
to be formally approved by the Department for the Environment, Food
and Rural Affairs for use in drilling wells for public water
supply.
Holmwood-1 Exploration Well (UKOG interest 30%)
The Holmwood-1 well, scheduled to be drilled in the second half
of 2017, is located in PEDL143, approximately 8 km to the west of
HH-1. The well is designed to test a further geological look-alike
of Horse Hill with reservoir objectives in the Portland, Kimmeridge
Limestones and Corallian.
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
Cenkos Securities PLC (Joint Broker)
Nick Tulloch / Neil McDonald Tel: 0131 220 6939
Square 1 Consulting (Public Relations)
Brian Alexander / David Bick Tel: 020 7929 5599
Glossary:
degree API a measure of the density of crude
oil, as defined by the American
Petroleum Institute
-------------- ------------------------------------------
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
-------------- ------------------------------------------
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
-------------- ------------------------------------------
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
-------------- ------------------------------------------
Retention An area covering all or part of
Area ("RA") an onshore UK "14(th) Round New
Model" Licence that can be retained
until the expiry date without any
relinquishment and subject to a
work programme agreed by the OGA.
Usually, as in the case of PEDL137
and PEDL246, the Retention Area
covers the entire Licenced area
-------------- ------------------------------------------
seismic use of reflected and refracted
sound waves generated at the surface
to ascertain the nature of subsurface
geological structure. 2D seismic
records a two-dimensional cross-section
through the subsurface collected
using the two-dimensional common
mid-point method. 3D seismic records
a three-dimensional image through
the subsurface using the common
depth-point method.
-------------- ------------------------------------------
step-out well a well designed to determine the
lateral extent of a discovered
hydrocarbon accumulation or play
-------------- ------------------------------------------
UKOG Licence Interests
The Company has interests in the following UK licences:
Asset Licence UKOG's Licence Holder Operator Area (km(2) ) Status
Interest
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
UKOG (GB) IGas Energy Field in stable
Avington (1) PEDL070 5% Limited Plc 18.3 production
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Baxters Copse PEDL233 50% UKOG Weald IGas Energy 89.6 appraisal/development
(2) Limited Plc well planned; licence
extended to 2018
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Broadford Bridge PEDL234 100% Kimmeridge Oil Kimmeridge Oil 300.0 BB-1 well permitted,
(3) & Gas Limited & Gas Limited drilling planned in
(4) (4) 2017
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Angus Energy Angus Energy Well intervention
Brockham PL235 1.11% (6) (6) 8.9 programme ongoing
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Holmwood (3) PEDL143 30% UKOG Europa Oil & 91.8 Holmwood-1
Gas (Holdings) exploration well
plc planned in 2017
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
UKOG (GB) IGas Energy Field in stable
Horndean (1) PL211 10% Limited Plc 27.3 production
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Horse Hill (5) PEDL137 31.2% Horse Hill Horse Hill 99.3 Submitted planning
Developments Developments application for long
Ltd (7) Ltd (7) term production tests
and drilling of two
wells
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Horse Hill Horse Hill
Developments Developments
Horse Hill (5) PEDL246 31.2% Ltd (7) Ltd (7) 43.6 As above
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Isle of Wight UKOG Solent UKOG Solent Preparing drilling
(Offshore) (3) P1916 100% Limited Limited 46.7 planning submission
----------------
Isle of Wight
(Onshore) (2, Preparing drilling
3) PEDL331 65% UKOG TBA 200.0 planning submission
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Lidsey PL241 0.85% Angus Energy Angus Energy 5.3 Drilling of infill
(6) (6) well being considered
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Markwells Wood PEDL126 100% UKOG (GB) UKOG (GB) 11.2 Submitted planning
(2) Limited Limited application for
appraisal and field
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.
Contains the extension of the Godley Bridge Portland gas discovery
and the site of the forthcoming Broadford Bridge-1 well.
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 1.71% interest in Angus Energy, which has a 50%
interest in Lidsey and a 65% interest in Brockham; Angus hold an
option to increase their Lidsey interest by a further 10% to
60%.
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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