RE: UK Oil & Gas30 Jan 2015 10:16
[UKOG] Has signed an alliance and consulting services agreement with US-based NUTECH Energy Alliance Ltd. ("NUTECH"), one of the world's leading companies in petrophysical analysis and reservoir Intelligence. NUTECH will work with UKOG to maximise the potential value of the Horse Hill area licences after the success of the Company's recent Horse Hill-1 ("HH-1") discovery in the UK's Weald Basin and assist UKOG with its other key UK hydrocarbon assets.
Headquartered and operating in Houston, Texas, NUTECH (www.nutechenergy.com) is a global oil services company specialising in reservoir evaluation and optimisation at all stages of the exploration and production life-cycle. NUTECH have analysed nearly 100,000 wells globally, for supermajors to small independents in 80 countries, containing many of the world's major conventional and unconventional hydrocarbon plays. NUTECH has been a technical leader in global conventional missed hydrocarbon pay analysis and, over the last 13 years, in the analysis of over 20,000 wells from within all identified unconventional plays in North America.
In 2014, prior to the UK Landward 14th Licence Round, NUTECH completed the detailed analysis of the conventional and unconventional potential of 381 UK onshore released wells, situated within key hydrocarbon play fairways in seven basins across the UK. The study included 133 wells in the Weald and Wessex basins, currently UKOG's prime areas of interest.
NUTECH will immediately assist UKOG in the assessment of reservoir parameters, including oil in place volumes and rock mechanical properties, encountered in the HH-1 discovery. The analysis will encompass the conventional Portland Sandstone oil pay and the full 1,496 ft thick gross, highly organically rich and thermally mature, Upper Jurassic Kimmeridge Clay ("KC") Formation source rock section, which includes an oil saturated conventional Upper KC limestone reservoir. Additional analysis will be undertaken in the Middle and Lower Jurassic source rock sections to help the company understand hydrocarbon charge mechanisms and related potential in this part of the Weald basin. UKOG will obtain advice on testing and completion design for the HH-1 discovery and for future wells.
As part of the alliance agreement, UKOG will also obtain Nutech's 2014 analyses of key wells surrounding PEDL137 and PEDL246 licences, which cover 140 km2 (34,600 acres). These analyses will be used to further define the likely semi-regional extent and size of the KC micrite and related plays encountered in the HH-1 well.
As reported by the Company on 17 December 2014, the overall Upper Portland sandstone conventional reservoir in the HH-1 and Collendean Farm-1 structure is currently interpreted to contain a range of gross oil initially in place ("OIIP") of between a low case (P90) of 5.7 million barrels ("mmbbls") and a high (P10) case of 12.1 mmbbls. The most likely case OIIP (P50) is currently calculated at 8.2 mmbbls. Current electric log interpretation of HH-1 also shows that the uppermost KC limestone encountered at 2,510.4 ft TVDss, contains a 20 ft continuous oil saturated zone within a 37 ft net pay zone, with no observable oil water contact, and an oil down to at 2,570 ft TVDss. The KC limestone lies between thermally mature, world-class oil source rocks within the KC Formation between 2,224 ft and 3,720 ft TVDss. Samples from the KC show the HH-1 well penetrated a sweet spot with total organic carbon ("TOC") of up to 9.4%, generative potentials (S2) of between 45-103 kg of hydrocarbons per tonne, hydrogen indices (HI) ranging from 759-1,098 and with measured vitrinite reflectance ("Ro") exceeding 0.81% at the base of the formation.
UKOG will also obtain NUTECH's analyses of the Arreton-2 well, an undeveloped potential Portland missed oil-pay discovery onshore Isle of Wight, drilled by British Gas in 1974. The Arreton-2 well is located within UKOG's 14th round application area, which lies adjacent to its P1916 offshore Isle of Wight acreage. In addition to the missed pay potential the Company will utilise its learning from HH-1 to investigate the hydrocarbon potential not only within the KC Formation but also in the Osmington Oolite limestone and Middle and Lower Jurassic hot shale sequences in the Isle of Wight area.
Stephen Sanderson, UKOG's CEO, commented:
"I am delighted that the Company will gain access to NUTECH's proven global technical expertise, unrivalled experience and extensive industry network in this specialist field, to help us fully understand the potential of the HH-1 discovery and its implications for our appraisal and wider exploration objectives. NUTECH brings to the Company, and to the UK, proven knowledge of how to assess and exploit cutting-edge plays, such as the KC micrite, from their vast experience, particularly in the onshore unconventional USA arena. The alliance is thus