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Uk Oil & Gas Regulatory News (UKOG)



Regulatory News for Uk Oil & Gas (UKOG)


Share Price: 1.90Bid: 1.80Ask: 1.90Change: 0.025 (+1.33%)Riser - Uk Oil & Gas
Spread: 0.10Spread as %: 5.56%Open: 1.875High: 1.90Low: 1.90Yesterday’s Close: 1.875





Portland Declared Commercially Viable

Thu, 18th Oct 2018 07:00

RNS Number : 4111E
UK Oil & Gas PLC
18 October 2018

UK Oil & Gas PLC

("UKOG" or the "Company")

Horse Hill Portland Oil Field Declared Commercially Viable

Horse Hill-1 ("HH-1") Portland and Kimmeridge Oil Discovery, Weald Basin, UK

UK Oil & Gas PLC (London AIM: UKOG) announces that Horse Hill Developments ("HHDL"), a UKOG subsidiary company and the operator of the HH-1 Kimmeridge Limestone and conventional Portland Sandstone oil discovery, has informed the Company that, following the successful Portland Extended Well Test ("EWT") programme, it now considers the Portland oil field to be commercially viable.

HHDL now targets the start-up of long term Portland oil production during 2019, subject to the grant of necessary regulatory consents. The first future horizontal production well, HH-2, for which planning and Environment Agency consents are in place, is planned to be drilled in early 2019. HH-1 is located in licence PEDL137 in which UKOG holds a 46.735% beneficial interest. Key points and further details are summarised below:

Key Points:

· Following analysis of EWT results and economic modelling of HHDL's and Xodus Group's ("Xodus") forecast oil production profiles, HHDL now considers the Portland oil field to be commercially viable. Work is now underway towards a targeted long-term production start-up in 2019.

· HHDL currently envisages the Portland field development plan to consist of up to 3 production wells and up to 2 pressure support wells.

· A planning application for Portland and Kimmeridge field development is nearing completion and is targeted for submission to Surrey County Council ("SCC") before year-end.

· Xodus' calculated future Portland oil production profiles, based upon observed pressure and volumetric data from the EWT, show that oil recoveries of up to 45% of connected Oil in Place could be attained if a successful full voidage replacement pressure support scheme is incorporated into the field's development.

· The Portland field's first new horizontal production well, HH-2, which has SCC planning and Environment Agency consents, is planned to spud in early 2019 following completion of the Kimmeridge Limestone 4 EWT.

· As reported on 10 September, the HH-2 horizontal well has a targeted* sustainable daily Portland production rate of 720 to 1,080 bopd, 2 to 3 times the calculated* sustainable vertical well rate of 362 bopd derived from the EWT programme.

· Following submission of the planning application, Xodus' 2018 Portland Competent Persons Report will be updated to include recoverable reserves and net present values of cash flows associated with the envisaged Portland oil field development.

Note: * There can be no absolute guarantee that forecast, targeted or calculated rates of production will be achieved.

Stephen Sanderson, UKOG's Chief Executive, commented:

"HHDL's declaration of Portland commercial viability is a significant milestone for the Company. It transforms Horse Hill from solely exploration into a fully-fledged field development with a full-scale oil production start-up targeted in 2019.

The better than expected EWT results have robustly demonstrated that the Portland has significant daily production potential in its own right, which could see the first planned horizontal producer attain sustained oil rates of 720-1,080 bopd. If realised, these rates could make the Horse Hill Portland oil field one of the UK onshore's top producers.

We also eagerly anticipate the possibility of combined long-term production from both the Portland and Kimmeridge, an exciting and potentially transformational prospect for Horse Hill and the Company."

About Xodus

Xodus is an international, globally recognised consultancy group providing engineering and advisory services to clients in the oil & gas, LNG, renewables and utilities industries worldwide. They are certified as Competent Persons for the purposes of oil and gas resource and reserve assessments. More details can be found at www.xodusgroup.com

Qualified Person's Statement

Matt Cartwright, UKOG's Chief Operating Officer, who has over 35 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Cartwright is a Chartered Engineer and member of the Society of Petroleum Engineers.

For further information, please contact:

UK Oil & Gas PLC

Stephen Sanderson / Kiran Morzaria Tel: 01483 243450

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 243450

Glossary

depletion-drive

a natural mechanism whereby the differential pressure between the wellbore and reservoir permits dissolved solution gas to expand and become an energy support to create oil flow into a well. It is also known as solution gas drive or dissolved gas drive.

connected oil in place

a volume of OIP that is demonstrated by collected pressure and flow data to be directly accessed and drained by a well during production. Only part (or a fraction) of the volume, known as the recoverable volume, will normally be recovered to surface during oil production. The percentage of the recoverable volume compared to the total connected OIP is known as the recovery factor.

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 well 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 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

horizontal well

a well that during drilling is steered so as to be at or close to 90 degrees from the vertical to follow a particular geological stratum or reservoir unit

oil in place ("OIP")

the quantity of oil or petroleum that is estimated to exist in naturally occurring accumulations.

pressure support or voidage replacement

maintenance of reservoir pressure as close to virgin reservoir pressure as possible and above bubble point via injection of saline formation water into the reservoir. The injected water increases oil recovery via maintaining maximum depletion drive energy (see above) and displacing oil from reservoir pores towards the wellbore. The mechanism is also referred to as voidage replacement. Full pressure support or "full voidage replacement" means that the overall volume of saline formation water injected is equal to the volume of oil extracted.

recoverable volumes or resources

those quantities of petroleum (oil 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 categorised 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

UKOG Licence Interests

The Company has interests in the following UK licences:

Asset

Licence

UKOG Interest

Licence Holder

Operator

Area (km2)

Status

Avington 1

PEDL070

5%

UKOG (GB) Limited

IGas Energy Plc

18.3

Field currently shut in

Broadford Bridge 4

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

46.735%

Horse Hill Developments Ltd 6

Horse Hill Developments Ltd 6

99.3

Production tests ongoing, 2 further appraisal wells scheduled for 2018/19

Horse Hill 5

PEDL246

46.735%

Horse Hill Developments Ltd6

Horse Hill Developments Ltd 6

43.6

As above

Isle of Wight (Onshore) 2, 3

PEDL331

65%

UKOG

UKOG

200.0

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

Markwells Wood 2

PEDL126

100%

UKOG (GB) Limited

UKOG (GB) Limited

11.2

Revised drilling and testing planning application underway

Notes:

1. Oil field currently in production.

2. Oil discovery pending development and/or appraisal drilling.

3. Exploration asset with drillable prospects and leads. PEDL234 contains the Broadford Bridge-1 and 1z
oil discovery well, the extension of the Godley Bridge Portland gas discovery plus further exploration
prospects.

4. UKOG has a 100% interest in UKOG (234) Ltd, which has a 100% interest in PEDL234.

5. Oil discovery in 3 zones, EWT ongoing, two further wells HH-1z and HH-2 planned in early 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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DateSourceHeadlineCategory
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
10-Sep-18 12:30RNSEWT Updates, Portland & Kimmeridge Oil DiscoveryResults and Trading Reports
06-Sep-18 18:03RNSExercise of WarrantsCompany Announcement - General
04-Sep-18 11:22RNSUpdate - Holmwood Licence (PEDL 143)Company Announcement - General
03-Sep-18 12:24RNSHigh Court Grants Interim InjunctionCompany Announcement - General
30-Aug-18 07:00RNSAcquisition of Further Interest in Horse HillMergers, Acquisitions and Disposals
29-Aug-18 09:05RNSSecond Price Monitoring ExtnCompany Announcement - General
29-Aug-18 09:00RNSPrice Monitoring ExtensionCompany Announcement - General
24-Aug-18 16:40RNSSecond Price Monitoring ExtnCompany Announcement - General
24-Aug-18 16:35RNSPrice Monitoring ExtensionCompany Announcement - General
20-Aug-18 07:00RNSAcquisition of Further Interest in HHDLMergers, Acquisitions and Disposals
13-Aug-18 14:00RNSExercise of WarrantsCompany Announcement - General
03-Aug-18 11:30RNSPortland high-rate flow test successfully completeCompany Announcement - General
31-Jul-18 14:00RNSSchedule 1 Update - UK Oil & Gas PlcCompany Announcement - General
31-Jul-18 12:34RNSResult of General MeetingResults and Trading Reports
18-Jul-18 14:00RNSPortland Extended Flow Test ("EWT")Company Announcement - General
13-Jul-18 12:36RNSCorporate Update & Notice of GMCompany Announcement - General
12-Jul-18 16:00RNSSchedule 1 - UK Oil & Gas PlcCompany Announcement - General
09-Jul-18 14:05RNSSecond Price Monitoring ExtnCompany Announcement - General
09-Jul-18 14:00RNSPrice Monitoring ExtensionCompany Announcement - General
09-Jul-18 11:05RNSSecond Price Monitoring ExtnCompany Announcement - General
09-Jul-18 11:00RNSPrice Monitoring ExtensionCompany Announcement - General
09-Jul-18 07:00RNSCorporate Update: Change of AIM Trading StatusCompany Announcement - General
04-Jul-18 07:00RNSSuccessful Placing to Raise £2mResults and Trading Reports
03-Jul-18 14:00RNSPrice Monitoring ExtensionCompany Announcement - General
02-Jul-18 16:40RNSSecond Price Monitoring ExtnCompany Announcement - General


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