LONDON (Alliance News) - The companies involved in the Horse Hill project in Surrey, England, Wednesday said the PEDL137 exploration license, where a potential major oil discovery has been made, has been extended by one year by the Oil and Gas Authority, easing concerns about the license expiring before the all important flow test could be conducted.
The exploration PEDL137 license near Gatwick Airport, which was subject to controversy earlier this year over the amount of oil that has been discovered there, was set to expire at the end of September 2015, but the companies said the license has now been extended to September 30, 2016.
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 companies are planning on flow testing the Horse Hill-1 well later in 2015, and subject to the reults, will seek to upgrade the exploration license to a production license by submitting a field development plan for Horse Hill.
The PEDL137 license caused a stir when the companies revealed test results showing that there was 158.0 million barrels per square mile of oil in place over a 653 feet aggregate net pay section, which led to the media such as Sky and the BBC reporting that there was potentially 100.0 billion barrels of oil at the project.
Although the companies never confirmed this 100.0 billion barrel figure in any statements, UK Oil and Gas Chairman David Lenigas was quoted in the Evening Standard newspaper backing the 100.0 billion barrel figure, causing the company to release a second statement that said more work needed to be completed on the project before any official figures could be calculated.
However, on Wednesday the companies released separate statements that said "the PEDL137 licence provides for a potential production period of 19 years".
""There has been some recent speculation as to the status of the Horse Hill licences which has now been clarified by the extension, for one year, by the Oil and Gas Authority whilst a flow test is conducted on the Horse Hill well and a field development plan submitted. We look forward to more news on the timing of the planned HH-1 flow test shortly," said Neil Ritson, chairman of Solo Oil.
In UK Oil and Gas Investment's statement, the company said its wholly owned Markwells Wood license, or PEDL126 has also been extended by a further year to June 30, 2016 whilst the Baxters Copse, or PEDL233 license, in which it has a 50% stake, was extended to the same date.
UK Oil and Gas shares were up 8.8% to 2.80 pence whilst Solo shares rose 0.4% to 0.557p. Alba shares soared 50% to 0.825p, with Evocutis shares increasing 8.1% to 0.233p and Stellar shares were up 10.1% to 0.534p. Doriemus shares were up 8.8% to 0.0870p.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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