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UK Oil & Gas Prepares For Busy 2017 In Portfolio As Annual Loss Widens

Tue, 28th Feb 2017 14:25

LONDON (Alliance News) - UK Oil & Gas Investments PLC on Tuesday said its pretax loss was wider in 2016 as a result of higher administrative costs, as it gears up for a busy 2017 that will see a swathe of activity undertaken across its large portfolio.

UK Oil & Gas reported a pretax loss of GBP2.0 million in 2016 versus a GBP1.7 million loss in 2015, after administrative costs increased to GBP2.1 million from GBP1.2 million.

The company's flagship Horse Hill operation, which is in partnership with a group of other AIM-listed companies, will undergo long-term production testing this year, followed by two further appraisal or development wells being drilled in 2018.

"The planned production tests are specifically designed to prove access to a commercial volume of oil in place. Consequently, we expect to be able to make a declaration of commerciality for the Kimmeridge and Portland following these test results," said UK Oil & Gas.

At Broadford Bridge onshore the UK, the company said the Broadford Bridge-1 well is planned for 2017, with drilling to start in the second quarter to penetrate the entire Kimmeridge section.

"Our planning permission also includes the ability to flow test the well for up to 14 weeks. If successful, and provided the tests are encouraging, [the subsidiary] would aim to apply for permanent production status from BB-1 by the end of 2018," UK Oil & Gas said.

"Due to our 100% ownership, if BB-1 is a discovery of similar nature to Horse Hill-1, it could result in three times the overall net oil production impact to the company compared to Horse Hill. Furthermore, should BB-1 ultimately prove our hypothesis that Kimmeridge limestone oil lies within a wider resource deposit, the licence's 300 km squared area could hold around three times the recoverable resources of the Horse Hill licences," the company added.

At the onshore UK Godley Bridge licence, UK Oil & Gas said it has started to look for a drill location and will submit a planning application to drill a well in the first half of 2018.

At the onshore UK Holmwood licence, in partnership with Europa Oil & Gas (Holdings) PLC, UK Oil said: "The Holmwood-1 well is an important part of our Kimmeridge oil strategy. It is one of our three planned new wells designed to demonstrate that the results of Horse Hill can be replicated across the Weald and that the Kimmeridge contains a laterally extensive oil deposit. The planned deviated well will also test a shallower Portland sandstone objective in a look-alike geological setting to the Horse Hill and Collendean Farm Portland discovery."

UK Oil & Gas's other fields are Markwells Wood, Baxters Copse, Horndean, Avington, Brockham, Lidsey and its Isle of Wight operations.

The stock was trading down 1.5% on Tuesday at 1.33 pence per share.

By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance

Copyright 2017 Alliance News Limited. All Rights Reserved. 

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