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(Alliance News) - UK Oil & Gas PLC and Alba Mineral Resources PLC said on Friday that the UK Oil & Gas Authority has approved the Horse Hill oil field development plan and consented to the start of long-term production.
Shares in UK Oil & Gas were trading 25% higher at 0.47 pence each on Friday morning in London. Alba Mineral shares were trading 24% higher at 0.087p each.
UK Oil & Gas owns an 86% interest in the Horse Hill PEDL 137 and PEDL 246 licenses, located in Surrey, England. Alba Mineral owns 12% interest in the licences.
UK Oil & Gas said the government approval will enable net recoverable reserves to be allocated to the field and allow the company to enter into long-term field operations contracts.
Production of the Horse Hill-1 oil discovery well will now commence, UK Oil & Gas said, with Kimmeridge production expected to be added in late Spring through a conversion of the well to a dual completion. Production at the HH-2Z well near Horley in Surrey is scheduled for after completion of the current extended well testing campaign.
Earlier in March, the company said that work to stop water flowing into the Horse Hill-2z horizontal production well was successful.
"This is an important regulatory milestone, granting governmental production consent. The company can now focus firmly upon maximising stable production, reducing operating costs and generating positive cash flow. The ability to book reserves also opens the way to potential debt funding, a positive step towards both creation and preservation of shareholder value," said UK Oil & Gas Chief Executive Stephen Sanderson.
By Ife Taiwo; ifetaiwo@alliancenews.com
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