TIDMUKOG
RNS Number : 1919N
UK Oil & Gas PLC
16 January 2019
UK Oil & Gas PLC
("UKOG" or the "Company")
Kimmeridge Oil Production Continues at Horse Hill-1 ("HH-1")
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce
that Horse Hill Developments Ltd ("HHDL"), a UKOG subsidiary
company and the operator of the Horse Hill oil field, has informed
the Company that sustained production continues to be maintained
from the HH-1 extended well test ("EWT") programme, achieving a
gross aggregate total of over 25,000 barrels ("bbl") to date, a
significant production milestone. Of the aggregate total, over
21,000 bbl has been produced to date from the Kimmeridge Limestone
("KL") oil pool, more than doubling November's reported Kimmeridge
production total. No formation water has been returned to surface
during the entire EWT. Dry oil and solution gas production
continues from HH-1.
Based on the continued Kimmeridge EWT success and October's
announcement of Portland commercial viability, HHDL plans to
continue HH-1 EWT production until the expiry of current permits in
spring 2019 and then to move directly into the drilling and long
term testing of two new horizontal wells, HH-2 and HH-1z, for which
UKOG's internal funding, planning consent and environmental permits
are in place. HH-1 is located in licence PEDL137 in which UKOG
holds a 46.735% beneficial interest.
Key EWT results to date are summarised below:
Horse Hill 2018-19 EWT Oil Production Milestones:
-- Over 25,000 bbl total aggregate Kimmeridge and Portland oil production since early July.
-- Over 21,000 bbl total Kimmeridge oil production since mid-October.
-- 114 tankers of crude successfully exported to Perenco's
Hamble oil terminal. The KL's 40deg API Brent quality crude
continues to be sold at prevailing Brent crude oil prices, less a
small deduction for handling and marketing.
KL EWT Update:
-- KL4 production from a 103 ft perforated interval commenced
during late November, yielding 2,192 bbl at a maximum half-hourly
metered rate of 584 barrels of oil per day ("bopd") and at an
average sustained daily continuous rate of 300 bopd over the
subsequent week.
-- Fluid and pressure build up data gathered from the KL4 test
demonstrate that the KL3 and KL4 are one single oil pool of 358 ft
vertical extent. As a result, and as previously indicated, a
decision was made to commingle both KL3 and KL4 production (i.e.
produce from both sets of perforations at the same time).
-- Commingled KL3 and KL4 production from an aggregate 187 ft
perforated interval commenced on 4(th) December at a maximum
half-hourly rate of 426 bopd and continued throughout the Christmas
and New Year period, producing 8,829 bbl of 40deg API crude. The
programme included several pressure build-up tests and testing of
different pump configurations, settings and equipment.
-- Following the installation of a new downhole pump and an
optimised surface hydraulic pump unit, stable commingled production
resumed on 7(th) January at an increased initial rate of 525 bopd.
The sustained daily rate over the subsequent week averaged 303
bopd. A de-waxing treatment applied on 14(th) January led to an
increase in hourly rate to 351 bopd. Commingled production
continues.
-- To date, the absence of produced formation water adds
continuing support to the Company's geological concept that KL oil
lies within a significant continuous oil deposit.
-- Planning and environmental permit applications for permanent
oil production via a 7-well development were submitted to Surrey
County Council and the Environment Agency on 7(th) December and
10(th) January, respectively. It is anticipated that all necessary
permits should be in place by Autumn 2019, enabling a transition
from EWT production into permanent production during winter
2019.
Stephen Sanderson, UKOG's Chief Executive, commented:
"The continued EWT success supports the Company's plans to
establish permanent production at Horse Hill in 2019. UKOG aims to
deliver near-continuous oil production throughout 2019 via a
combination of long term testing of HH-1 and two new wells,
followed by a smooth transition into permanent production in the
winter. The potentially transformative effect of a successful
programme is an exciting prospect for 2019."
Qualified Person's Statement
Rob Wallace, UKOG's principal technical advisor, who has over 40
years of relevant experience in the oil industry, has approved the
information contained in this announcement. Mr Wallace is a
Chartered Scientist, Chartered Geologist and Fellow of the
Geological Society of London, an active member of the American
Association of Petroleum Geologists, a member of the Petroleum
Exploration Society of Great Britain and a member of the South
African Geophysical Society.
For further information, please contact:
UKOG
Stephen Sanderson / Kiran Morzaria Tel: 01483 900582
WH Ireland (Nominated Adviser and Broker)
James Joyce / James Sinclair-Ford Tel: 020 7220 1666
Cenkos Securities PLC (Joint Broker)
Joe Nally / Neil McDonald Tel: 0207 397 8919
Novum Securities (Joint Broker)
John Bellis Tel: 020 7399 9400
Public Relations
Brian Alexander / David Bick Tel: 01483 900582
Glossary
degAPI a measure of the density of crude oil, as defined
by the American Petroleum Institute
oil field an accumulation, pool or group of pools of oil
in the subsurface that produces oil to surface.
---------------------------------------------------------
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.
---------------------------------------------------------
UKOG Licence Interests
The Company has interests in the following UK licences:
Asset Licence UKOG's Licence Operator Area Status
Interest Holder (km(2)
)
Field currently
Avington UKOG (GB) IGas Energy temporarily shut
(1) PEDL070 5% Limited Plc 18.3 in
----------------- ---------- -------------- ------------------ -------- -------------------------
Broadford BB-1 & 1z oil discovery,
Bridge UKOG (234) UKOG (234) planning application
(3) PEDL234 100% Ltd (4) Ltd (4) 300.0 approved
----------------- ---------- -------------- ------------------ -------- -------------------------
Seeking alternate
Europa Oil sites to drill
Holmwood & Gas (Holdings) Holmwood and other
(3) PEDL143 40% UKOG plc 91.8 Kimmeridge prospects
----------------- ---------- -------------- ------------------ -------- -------------------------
Horndean UKOG (GB) IGas Energy Field in stable
(1) PL211 10% Limited Plc 27.3 production
----------------- ---------- -------------- ------------------ -------- -------------------------
Production tests
Horse Hill Horse Hill ongoing, two further
Horse Hill Developments Developments appraisal wells
(5) PEDL137 46.735% Ltd Ltd 99.3 scheduled for 2019
----------------- ---------- -------------- ------------------ -------- -------------------------
Horse Hill Horse Hill
Horse Hill Developments Developments
(5) PEDL246 46.735% Ltd Ltd 43.6 As above
----------------- ---------- -------------- ------------------ -------- -------------------------
Preparing planning
submission for
Arreton-3 oil appraisal
Isle of well and Arreton
Wight (Onshore) South exploration
(2, 3) PEDL331 95% UKOG UKOG 200.0 well
----------------- ---------- -------------- ------------------ -------- -------------------------
Markwells UKOG (GB) UKOG (GB)
Wood PEDL126 100% Limited Limited 11.2
----------------- ---------- -------------- ------------------ -------- -------------------------
Notes:
1. Oil field currently in stable production.
2. Oil discovery pending development and/or appraisal
drilling.
3. Exploration asset with drillable prospects and leads.
4. Contains the Broadford Bridge-1 /1z Kimmeridge oil discovery,
the eastern extension of the Godley Bridge Portland gas discovery
plus further undrilled Kimmeridge exploration prospects.
5. Oil field with three productive and commercially viable
zones, EWT ongoing, two further wells HH-1z and HH-2 scheduled Q2
2019, development underway subject to grant of planning consent,
expected Q3 2019.
6. UKOG has a direct 71.9% interest in HHDL, which has a 65%
interest in PEDL137 and PEDL246.
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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