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LONDON (Alliance News) - UK Oil & Gas PLC said Monday it has taken a majority position in the Horse Hill project, the so-called 'Gatwick Gusher', after buying out two partners.
UK Oil & Gas raised its ownership of the operator of Horse Hill to 56.9% from 49.9%, having bought Gunsynd PLC's 2% holding in Horse Hill Developments Ltd for GBP550,000 and Primorus Investments PLC's 5% interest for GBP1.4 million.
Horse Hill Developments has a 65% interest in the Horse-Hill 1 project and also operates the Kimmeridge Limestone 3 (KL3), KL4, and Portland oil discoveries.
UKOG's Chief Executive Stephen Sanderson commented: "Although modest in overall size, these acquisitions, the first under the company's new AIM operating company status, are highly strategic in that they deliver to UKOG, the driving force behind the HH-1 Portland and Kimmeridge oil discovery, a majority 56.9% shareholding in HHDL."
He continued: "Importantly, the resultant 36.98% beneficial licence interest also makes UKOG the largest single party in the HH-1 discovery and licences. In cooperation with the remaining co-venturers, the company can now effectively steer the project directly towards planned permanent production and potentially significant cash flow in 2019."
Horse Hill in Surrey was nicknamed the 'Gatwick Gusher' in 2015 after it was announced the site is a potential 100 billion barrel find.
However, results from a competent persons report carried out by Xodus Group Ltd released in June gave a contingent resource at Horse Hill of just 3.6 million barrels of oil in the measured, indicated, and inferred categories, and 35.7 million barrels in total across all of its assets.
In June, UKOG starting flow-testing the site, after getting permission from the UK Oil & Gas Authority to do so. Results came in ahead of expectations at an hourly-metered rate of 352 barrels of oil.
Last December, UKOG had said there was just one hurdle to starting drilling at Horse Hill, being pre-commencement planning conditions from Surrey County Council, and this was granted in March.
On Monday, UKOG said results so far from the well testing on the Portland oil pool at Horse Hill have been "very positive", with short-term, high-rate tests reaching implied daily rates of 401 and 414 barrels a day over period of six and two hours, respectively.
Once the Portland pool has been testing, UKOG will move two test two deposits in the Kimmeridge limestone.
UKOG shares were 2.1% higher Monday at 1.94 pence each, while Gunsynd's were 12% lower at 0.031p. Primorus shares were 2.1% up at 0.14p.
