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Uk Oil & Gas Regulatory News (UKOG)



Regulatory News for Uk Oil & Gas (UKOG)


Share Price: 1.025Bid: 0.00Ask: 0.00Change: 0.00 (0.00%)No Movement on Uk Oil & Gas
Spread: 0.00Spread as %: 0.00%Open: 1.125High: 0.00Low: 0.00Yesterday’s Close: 1.025





Portland Oil Production Resumes at Horse Hill

Mon, 18th Feb 2019 07:00

RNS Number : 2877Q
UK Oil & Gas PLC
18 February 2019

UK Oil & Gas PLC

("UKOG" or the "Company")

Portland Oil Production Resumes at Horse Hill Oil Field

UK Oil & Gas PLC (London AIM: UKOG), is pleased to announce that its subsidiary company, Horse Hill Developments Ltd has re-established Portland oil production from the Horse Hill-1 ("HH-1") well in which the Company has a 50.635% majority interest. The resumption of continuous Portland dry oil flow (i.e. oil with zero water content), at a stable daily rate of between 208 to 218 barrels per day ("bopd"), forms a key part of the schedule of works required to finalise the Portland field development plan and to the targeted establishment of permanent long-term Portland production, planned by end 2019.

Further details of extended well test ("EWT") results to date are summarised below.

Horse Hill 2018-19 EWT Oil Production Milestones:

· Over 30,200 barrels ("bbl") aggregate Kimmeridge and Portland oil production to date.

· Over 25,000 bbl total Kimmeridge oil production.

· Over 5,100 bbl total Portland production to date, flow continues.

· 142 tankers of crude successfully exported primarily to Perenco's Hamble oil terminal. The KL's 40° API Brent quality crude containing no produced water, continues to be sold at prevailing Brent crude oil prices, less a small deduction for handling and marketing.

Portland Test Production and Future Plans

For prudent reservoir management purposes, the average test production rate from the 114 ft vertical perforated Portland section has been maintained below the previously reported 362 bopd calculated optimised sustainable rate. HH-1 test production is planned to continue until the completion of the new HH-2 Portland horizontal well, scheduled to start in spring 2019, and for which planning and environmental permits are in place. Portland test production will then be switched over to HH-2.

As detailed in UKOG's 23 January 2019 Strategic Review, the HH-2 Portland flow rate target of 720-1,080 bopd from the HH-2 horizontal well, which has been externally verified as a realistic and viable expectation by Xodus Group Ltd ("Xodus"), is designed to position Horse Hill as the Weald Basin's leading oil producing field by year end. Subsequent planned horizontal wells in 2020 are designed to further boost gross Portland production and to position UKOG as one of the current top three oil producing companies in the UK onshore sector.

Kimmeridge Future Test Production Plans

In tandem with Portland operations, the Kimmeridge oil pool was shut-in to conduct a further long-term pressure build up test. Pressure gauges, set within the Kimmeridge reservoir, will monitor the Kimmeridge reservoir whilst the Portland is flowed.

Resumption of continuous Kimmeridge test production is now planned to follow directly after the drilling of HH-2. Initially via a short flow test period from HH-1, then by further long term production testing of the new HH-1z Kimmeridge sidetrack, for which planning and environmental consent are in place. As the HH-1z Kimmeridge horizontal has similar flow rate targets as the Portland, there is significant potential to increase aggregate production towards the 3,500 bopd envisaged maximum detailed in the recent planning application.

Stephen Sanderson, UKOG's Chief Executive, commented:

" After a 6-month shut in period, the continued good flow performance from the Portland further reinforces the viability of Xodus' and the Company's 720-1,080 bopd horizontal well production targets. We remain on course to commence the first two horizontals in Spring, with long term production testing of both wells planned to follow directly afterwards. The flow test results to date, combined with the prospect of further near term drilling, place Horse Hill in a strong position to deliver positive "free" cash flow to UKOG in the near and foreseeable future."

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

°API

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 test (EWT) or production test

a well 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 generally up to 90 days maximum flowing time per productive horizon. The objective being to establish whether a discovery is commercially viable and the best methods of future production and recovery

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 follow and remain within a particular geological stratum or reservoir unit having a trajectory that runs approximately parallel to the top and or base of the target horizon

positive "free" cash flow

Revenues that have paid back the full capital cost of the activity, in this case the cost of the well. If the prognosed target rates are met, and at current oil prices, the planned horizontal wells are expected to pay-back capital costs in under 6 months.

sidetrack

re-entry of a well from the well's surface location with drilling equipment for deviating from the existing well bore to achieve production or well data from an alternative zone or bottom hole location

UKOG Licence Interests

The Company has interests in the following UK licences:

Asset

Licence

UKOG's Interest

Licence Holder

Operator

Area (km2)

Status

Avington 1

PEDL070

5%

UKOG (GB) Limited

IGas Energy Plc

18.3

Field currently temporarily shut in

Broadford Bridge 3

PEDL234

100%

UKOG (234) Ltd 4

UKOG (234) Ltd 4

300.0

BB-1 & 1z oil discovery, planning application approved

Holmwood 3

PEDL143

40%

UKOG

Europa Oil & Gas (Holdings) plc

91.8

Seeking alternate sites to drill Holmwood and other Kimmeridge prospects

Horndean 1

PL211

10%

UKOG (GB) Limited

IGas Energy Plc

27.3

Field in stable production

Horse Hill 5

PEDL137

50.635%

Horse Hill Developments Ltd 6

Horse Hill Developments Ltd 6

99.3

Production tests ongoing, two further appraisal wells scheduled for 2019

Horse Hill 5

PEDL246

50.635%

Horse Hill Developments Ltd6

Horse Hill Developments Ltd 6

43.6

As above

Isle of Wight (Onshore) 2, 3

PEDL331

95%

UKOG

UKOG

200.0

Preparing planning submission for Arreton-3 oil appraisal well and Arreton South exploration well

Markwells Wood

PEDL126

100%

UKOG (GB) Limited

UKOG (GB) Limited

11.2

MW-1 P&A

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 in Q2 2019, development underway subject to grant of planning consent, expected in Q3 2019.

6. UKOG has a direct 77.9% 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
DRLUBVKRKVAUAAR






DateSourceHeadlineCategory
17-May-19 07:00RNSHorse Hill-1 Production Test UpdateCompany Announcement - General
16-Apr-19 07:00RNSAcquisition of Further Interest in PEDL143Mergers, Acquisitions and Disposals
11-Apr-19 14:46RNSResult of Annual General MeetingResults and Trading Reports
11-Apr-19 07:00RNSOil Production Test UpdateResults and Trading Reports
27-Mar-19 07:00RNSSuccessful Placing to Raise £3.5 MillionCompany Announcement - General
19-Mar-19 12:26RNSPosting of Annual Report and Accounts & AGM NoticeCompany Announcement - General
15-Mar-19 07:10RNSOil Production UpdateResults and Trading Reports
15-Mar-19 07:00RNSFinal Results for the year ended 30 September 2018Results and Trading Reports
12-Mar-19 16:41RNSSecond Price Monitoring ExtnCompany Announcement - General
12-Mar-19 16:35RNSPrice Monitoring ExtensionCompany Announcement - General
21-Feb-19 07:00RNSCompletion of Acquisition in Horse HillMergers, Acquisitions and Disposals
18-Feb-19 07:00RNSPortland Oil Production Resumes at Horse HillResults and Trading Reports
14-Feb-19 07:00RNSAcquisition of Further Interest in Horse HillMergers, Acquisitions and Disposals
11-Feb-19 09:05RNSSecond Price Monitoring ExtnCompany Announcement - General
11-Feb-19 09:00RNSPrice Monitoring ExtensionCompany Announcement - General
08-Feb-19 14:05RNSSecond Price Monitoring ExtnCompany Announcement - General
08-Feb-19 14:00RNSPrice Monitoring ExtensionCompany Announcement - General
08-Feb-19 11:05RNSSecond Price Monitoring ExtnCompany Announcement - General
08-Feb-19 11:00RNSPrice Monitoring ExtensionCompany Announcement - General
01-Feb-19 15:28RNSRelated Party Contractor AgreementCompany Announcement - General
23-Jan-19 11:01RNS2019-2020 Strategy and Drilling PlansResults and Trading Reports
22-Jan-19 09:00RNSCompletion of Arreton Oil Discovery AcquisitionCompany Announcement - General
16-Jan-19 07:00RNSKimmeridge Oil Production Continues at HH-1Results and Trading Reports
12-Dec-18 07:00RNSAcquisition of Interest in Arreton Oil DiscoveryMergers, Acquisitions and Disposals
15-Nov-18 07:00RNSEWT Update, Portland & Kimmeridge Oil DiscoveryResults and Trading Reports
18-Oct-18 07:00RNSPortland Declared Commercially ViableResults and Trading Reports
10-Oct-18 13:55RNSEWT Update: Horse Hill-1Results and Trading Reports
05-Oct-18 11:30RNSExtended Well Test and Regulatory UpdateCompany Announcement - General
25-Sep-18 07:00RNSCompletion of Further Interest in HHDLCompany Announcement - General
11-Sep-18 16:24RNS18-month Planning Extension ApprovedCompany Announcement - General


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