LONDON (Alliance News) - The oil and gas companies involved in the Horse Hill project in the Weald Basin, southern England, Thursday said they have received a significantly improved independent estimate for the amount of oil in place within the project, but stressed that the amount that can be recovered is still unknown.
This is the third estimate that has been carried out, which has increased every time and was carried out by Nutech Ltd. The new P50 estimate for the total Jurassic shale plus tight conventional reservoir section in the Horse Hill licenses now stands at 9.24 billion barrels of oil in place, of which 5.23 billion barrels is located in the Kimmeridge section.
"The results, utilising over 114 wells in the basin, confirm the likely presence of significant and potentially extensive hydrocarbon volumes within the licence areas and thus provides a further valuable step towards "proof of concept" for the identified Jurassic resource plays," said UK Oil and Gas Chief Executive Stephen Sanderson.
That is a significant rise from the previous estimate made earlier in June, which was conducted by Schlumberger Ltd. That estimate said there was a total of 255 million barrels gross oil in place situated within the tight limestone and mudstone plays of the Kimmeridge, Oxford Clay and Lias.
The first estimate was made in April and carried out by Nutech, and estimated the total oil in place at 158 million barrels per square mile.
All of those estimates exclude the upper portland sandstone reservoir estimate which was conducted in May by Xodus Group, which said there could be up to 21.0 million barrels of oil initially in place.
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.
All of the companies cautioned the new 9.24 billion barrel estimate "should not be construed as contingent resources, prospective resources or reserves" after the first estimate in April caused controversy, as media such as Sky and the BBC reported that there was potentially 100.0 billion barrels of oil at the project.
None of the companies ever confirmed that figure, but 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, in May, the companies released separate statements that said "the PEDL137 licence provides for a potential production period of 19 years".
On Thursday, the companies reiterated that only between 3% to 15% of the oil in place at Horse Hill is ever likely to be recovered, with a considerable amount of work needed to be completed before the recovery rate of the project can be determined.
"We now look forward to receiving Nutech's advice on the proposed Horse Hill-1 flow test objectives and the integration of the report's wider basin implications to help evaluate the potential of our interests in our other UK licences," said Sanderson.
On Thursday morning, UK Oil and Gas shares were down 0.6% to 2.31 pence, Solo shares were flat at 0.510p, Alba shares were down 0.2% to 0.599p, Doriemus shares were down 5.6% to 0.0755p, Stellar shares were off 3.4% to 0.507p, but Evocutis shares were up 6.3% to 0.218p.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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