LONDON (Alliance News) - UK Oil & Gas Investments PLC on Tuesday said the Portland oil resources that form part of the Horse Hill discovery have been upgraded, with estimates that each well pumping from the sandstone could produce around 350 barrels per day.
UK Oil & Gas holds the largest stake of the string of London-listed companies involved in the Horse Hill project near Gatwick Airport in Southern England, with a 31.2% stake. Solo Oil PLC and Primorus Investments PLC both hold a 6.5% working interest each, Regency Mines PLC has 3.25%, Alba Mineral Resources PLC has 9.75% and Gunsynd PLC has 1.3%.
A third party has calculated that the Portland sandstone has P50 oil-in-place of 32 million barrels, 53% higher than the 21 million barrels previously reported in May 2015, before the Horse Hill-1 well was flow tested in 2016.
"As previously stated by the company, oil-in-place should not be misconstrued as recoverable contingent resources or reserves, which are detailed below," said UK Oil & Gas.
The well flowed at a rate of 323 barrels of oil per day when tested last year, but output was constrained by the pump's mechanical capacity.
The gross recoverable 2C contingent resources - or the best estimate - have been calculated at 1.5 million barrels, and UK Oil & Gas said the "base case" is that each well drilled on Portland could initially produce 350 barrels of oil each day.
"The report also details that, for a shallow but permeable reservoir, such as the Portland, should a water re-injection scheme be undertaken to provide pressure support in the field's early productive life, it is reasonable to expect a material increment in overall oil recovery," said UK Oil & Gas.
If pursued, that could potentially allow an additional 8% to 14% of the oil-in-place to be recovered, equivalent to a further 1.7 million to 6.6 million barrels of gross recoverable oil.
As previously reported in October 2016, the joint venture submitted a planning application to Surrey County Council for an extensive Horse Hill-1 appraisal programme. That includes long-term production testing of Horse Hill-1 and a new deviated well, Horse Hill-2, designed to access the Portland in both the Horse Hill-1 and Collendean Farm-1 proven oil-bearing fault blocks.
"Our aim is to move towards a declaration of commerciality and stable long-term production from the Portland and Kimmeridge Limestones by the end of 2018," said UK Oil & Gas Executive Chairman Stephen Sanderson.
UK Oil & Gas shares were up 2.8% on Tuesday morning, Solo shares were up 2.4%, Regency shares were up 1.6%, Primorus shares were trading flat, Gunsynd shares were down 2.6% to 0.0414 pence and Alba shares were trading 2.8% higher.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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