Long term development plan- HH18 Nov 2020 13:05
Horse Hill Granted Long-term Production Consent
Wed, 11th Sep 2019 12:36
RNS Number : 9998L
UK Oil & Gas PLC
11 September 2019
UK Oil & Gas PLC
("UKOG" or the "Company")
Horse Hill Oil Field Granted Long-term Production Consent by Surrey County Council
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that, earlier today, Surrey County Council's ("SCC") Planning and Regulatory Committee granted full planning consent for long-term oil production at the Company's flagship Horse Hill oil field near Gatwick Airport. Following yesterday's acquisition of Tellurian's 35% stake in Horse Hill, the Company now holds a significant and controlling 85.635% interest in the field and the highly prospective surrounding PEDL137 and PEDL246 licences. The field is operated by the Company's subsidiary, Horse Hill Developments Ltd (HHDL), in which it holds a 77.9% controlling interest.
Planning Consent Summary
The planning consent gives permission to produce oil over a period of 25 years at up to 3,500 barrels of oil per day from a total of six wells within the Portland and Kimmeridge oil pools, including the existing Horse Hill-1 ("HH-1") and the forthcoming HH-2/2z horizontal well. Consent also includes permission to drill one water reinjection well to help maximise oil recovery. All existing and future wells will be drilled from within the existing 20 x 15 metre concrete pad. No further drilling sites beyond Horse Hill are required.
What Does the Consent Mean to UKOG and Horse Hill?
Critically, this consent means that the field's immediate oil production from HH-1 and HH-2/2z will no longer be limited to existing extended well test planning consents. The ability to produce over the field's economic lifespan also enables the transfer of current and future assigned recoverable resource volumes into the category of Reserves, which, by definition, conveys with more certainty that a known volume of petroleum can be produced commercially over a given time.
The commercial certainty associated with the allocation of Reserves at Horse Hill is therefore a critical step necessary to help facilitate the potential use of debt-based funding for field development and other Company working capital requirements. It is planned to commission a new Competent Persons Report to establish the Company's net Reserves following completion of HH-2z production testing in the Autumn.
The permission also enables the Company to finalise its Field Development Plan and submit it to the Oil and Gas Authority ("OGA") for the necessary regulatory and technical consent. Meetings in this respect have been scheduled with OGA in the coming weeks.
The field's environmental permit application, covering the four new wells and production activities, was submitted to the Environment Agency ("EA") in January and is under review. Drilling of the four new production and reinjection wells will require the usual drilling
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