LONDON (Alliance News) - The companies participating in the Horse Hill licence in the UK on Monday said the latest test to be carried out on the initial well on the licence has flowed at a stable rate of 323 barrels of oil per day, double the the previously reported rate.
The latest test was carried out on the Upper Portland sandstone interval, which only produced a flow rate of 168 barrels per day earlier this month. The increase was the result of the previous pump, which only had a 7-foot stroke capacity, being replaced by a 26-foot stroke pump.
Importantly, the flow rate was still restricted by that new pump, suggesting rates could be higher.
"It is likely that the rate can be further increased using a higher capacity downhole pump during the next planned test," said the companies.
Despite the improved flow rate, the Upper Portland interval has still yielded the worst result of the three intervals.
The first flow test at Horse Hill was conducted on the Lower Kimmeridge limestone and resulted in the first ever flow of oil from that rock unit in the Weald Basin and onshore the UK.
Taking the new flow rate into account, the three intervals within the Horse Hill-1 well have produced a final aggregate flow rate of 1,688 barrels of oil per day compared to the previous flow rate of 1,528 barrels.
The combined aggregate flow rate from all three intervals is "likely the highest aggregate stable dry-oil flow from any onshore UK new field wildcat discovery well," the companies said, and the rate from all three intervals could be considerably higher once development and production wells are drilled.
The other two intervals in addition to the Upper Portland are the Lower Kimmeridge limestone and the Upper Kimmeridge limestone, which yielded stable flow rates of 901 and 464 barrels of oil per day, respectively.
The companies said there was "no clear indication" of any reservoir pressure depletion during any of the flowtests, but said further analysis is being carried out.
"Given these exceptional results, the company has commissioned Nutech to investigate a possible upgrade to the oil in place calculated within all three test zones together with engineering studies to examine possible flow rates from a horizontal well," said UK Oil & Gas Investment PLC, one of the companies involved in the project.
"Reservoir engineering analyses by Nutech and Xodus are also underway, and will likely result in an estimation of potential recoverable volumes," UK Oil & Gas added.
Establishing the amount of oil that could potentially be recovered from the well will be a significant milestone for the project and will finally give investors some idea of the scale of a commercial operation.
Independent reports in 2015 indicated that a mean estimated total of between 9.97 and 10.99 billion barrels of oil existed under the Horse Hill licence, but that is contained in the shales and limestones of the Kimmeridge, Oxford Clay and Lias and should not be taken as the recoverable figure.
Preparation is now underway to obtain regulatory permissions to conduct extended production tests from all three zones at the site, followed by a horizontal sidetrack in the Kimmeridge and a possible new Portland development well.
"The flow test results are outstanding, demonstrating North Sea-like oil rates from an onshore well. This simple vertical well has achieved an impressive aggregate oil rate equivalent to 8.5% of total UK onshore daily oil production," said Stephen Sanderson, chairman of UK Oil & Gas.
"This discovery has the serious prospect of being a meaningful addition to the UK's own supply of oil in a period where North Sea production is declining more rapidly than expected," he added.
Horse Hill Developments owns a 65% stake in the project, with the rest held by Magellan Petroleum Corp.
UK Oil & Gas holds a 30% stake in Horse Hill Developments, Alba Mineral Resources PLC holds a 15% interest whilst Stellar Resources PLC and Solo Oil PLC each hold 10% stakes in Horse Hill Developments. Regency Mines PLC holds a 5% stake and Evocutis PLC holds a smaller a 2% stake.
UK Oil & Gas shares were down 5.6% on Monday, whilst Alba shares were down 6.5%. Solo Oil shares were down 2.4%, Regency shares were down 4.8%, Evocutis shares were down 3.5% and Stellar shares were down 2.1%.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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