LONDON (Alliance News) - The companies involved in the Horse Hill project in Surrey, England, on Monday said the upper portland sandstone reservoir could contain up to 21.0 million barrels of oil, considerably higher than original estimates, but once again the amount that can be recovered is unknown.
The stock-tank oil initially in place (STOIIP), which estimates the volume of oil in a reservoir prior to production, is separate from previous announcements concerning the oil in place at the project and does not include the Kimmeridge, Oxford and Lias oil-saturated limestones and rock sections.
The estimate was provided by Xodus Group, which updated the estimate after evaluating new petrophysical evaluations of both the Horse Hill-1 discovery and the older Collendean Farm-1 well, plus an updated interpretation of 2D seismic data across the entire license.
"The Xodus Report supports the company's view that the Horse Hill and Collendean Farm oil pool constitutes a significant conventional Upper Portland sandstone oil discovery in the Weald basin," said UK Oil and Gas Investments PLC Chief Executive Stephen Sanderson.
Horse Hill Developments Ltd owns a 65% stake in the Horse Hill prospect and the remaining 35% of the prospect is held by Magellan Petroleum Corp.
UK Oil and Gas Investments holds a 30% stake in Horse Hill Developments, whilst Doriemus PLC, Stellar Resources PLC, Solo Oil PLC and Alba Mineral Resources PLC each hold 10% stakes in Horse Hill Developments, with Evocutis PLC holding a 2% stake and the balance is owned by Angus Energy, in which UK Oil & Gas has a 6% stake.
The "best estimate" gross stock-tank oil initially in place has been reported as 21.0 million barrels of oil, which is "slightly more" than UK Oil and Gas Investment's latest revised estimates of 20.0 million barrels and significantly higher than the 8.2 million barrel estimate reported in December because of the new data that has been analysed, said the companies.
However, the companies stressed that these figures should not be construed as recoverable or classed as reserves. Until flow testing has been completed on the Horse Hill-1 well, no "meaningful estimates" can be made, and the companies said "a significant proportion will not be recovered during any future production regime".
Subject to approval by the relevant authorities, the companies intend to flow test the conventional sandstone zone as part of a wider test programme of the Horse Hill-1 well later in 2015. A successful test would be followed by a full technical resource assessment, and the identification of potentially recoverable resource volumes.
Following that, the companies would seek to move the PEDL 137 license into production "as soon as practicable". The current exploration license on the project is set to expire on September 30, 2016.
UK Oil and Gas Investments have previously made statements regarding the oil in place at the Horse Hill project. In April, the companies said they had made an oil discovery at the Horse Hill-1 well stating there was 158.0 million barrels per square mile of oil in place over a 653 feet aggregate net pay section.
Although the companies only confirmed the 158.0 million barrel per square mile figure in there statements, the media, including Sky News and the BBC, reported that the oil in place could be around 100.0 billion barrels of oil, causing UK Oil and Gas to clarify that only 3% to 5% of that was recoverable and that the figure should not be taken as a reserve.
At the beginning of May, UK Oil and Gas Chairman David Lenigas was quoted in the Evening Standard newspaper backing the 100.0 billion barrel figure, once again causing the company to release a statement that said more work needed to be completed on the project before any official figures could be calculated.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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