LONDON (Alliance News) - The oil companies behind the Horse Hill project in the Weald Basin in the UK saw their shares drop significantly on Wednesday after they said they failed to find oil in the Triassic target at the Horse Hill-1 well.
There are seven companies with a stake in Horse Hill Developments Ltd, a special-purpose vehicle which owns a 65% participating interest in the Horse Hill licence. The remaining 35% is held by Magellan Petroleum (UK) Ltd, a subsidiary of Magellan Petroleum Corp of the US.
UK Oil & Gas Investments PLC owns a 20% stake in the vehicle, with Doriemus PLC, Stellar Resources PLC and Solo Oil PLC each holding 10% stakes and Regency Mines PLC and Alba Mineral Resources PLC each owning 5% stakes. Angus Energy Ltd, a company in which UK Oil & Gas Investments has a 6% stake, holds the remaining 40% of Horse Hill Developments.
Following the announcement, Alba shares dropped 52.5% to 0.345 pence a share, whilst Stellar shares fell 40.8% to 0.346 pence. Doriemus shares dropped 40.1% to 0.0839 pence and UK Oil shares fell 39% to 0.532 pence. Solo shares traded down 22% to 0.609 pence and Regency fell 12.3% to 0.272 pence.
The Horse Hill-1 well has been drilled to a total depth of 8,770 feet measured depth, reaching its Triassic target at 8,054 feet. Despite reaching the target, no observable reservoir rocks or moveable gas was encountered.
"The Horse Hill-1 well results suggest the prognosed Triassic reservoir rocks, equivalent to the Sherwood Sandstone, are not developed this far north in the basin, though they may be developed to the south-west closer to the centre of the basin," said the companies in separate statements.
The Marriot 50 rig which was used to drill the Triassic formation, is now being demobilised and removed from the site whilst the companies consider a decision about future testing and production from the well.
From the Portland sandstone, which lies in the Jurassic rock above the Triassic formation, the company estimates there is around 3.1 million barrels of gross oil in place, and after analysing electric logs, an application has been made to carry out flow testing on the Portland sandstone.
""Whilst we are naturally disappointed that there was no gas discovery in the Triassic, we remain delighted that the well has made an oil discovery in the Jurassic Portland sandstone," said UK Oil and Gas, Solo Oil and Stellar Resources Chairman David Lenigas
Preliminary results from the Kimmeridge clay formation, which lies beneath the Portland sandstone, have shown potential for a higher than expected oil source with further testing being carried out to determine the potential of the formation.
"Further opportunities for additional oil potential have also been revealed by the well, particularly in the Kimmeridge limestones, both in the licence block and in the wider Weald Basin, and that these are now in the process of being assessed," added Lenigas.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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