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15 Nov 2018 07:00
Alba Mineral Resources plc
("Alba" or "the Company")
Extended Well Test ("EWT") Hits Significant Production Milestone, KL3 Exceeds 10,000 Barrels
Horse Hill-1 ("HH-1") Portland and Kimmeridge Oil Discovery, Weald Basin, UK
Alba Mineral Resources plc (AIM: Alba) announces that Horse Hill Developments Ltd, the operator of the HH-1 Kimmeridge Limestone and conventional Portland Sandstone oil discovery ("HHDL" or the "Operator"), has informed the Company that total oil production from the 2018 EWT has reached 13,920 barrels ("bbl"), approximately 2.21 million litres, with gross oil sales of approximately US$1.1 million.
The Operator has advised that:
- 2018 HH-1 oil production comprises 10,248 bbl (1.63 million litres) of 40° API oil from the Kimmeridge Limestone 3 ("KL3") and 3,672 bbl (c. 584,000 litres) of 35° API oil from the Portland;
- No formation water was returned to surface from either the KL3 or Portland; and
- The KL4 EWT programme is planned to commence shortly following the ongoing final KL3 pressure build up test.
HH-1 is located in licence PEDL137 in which Alba holds an 11.765% effective interest.
The Operator has further advised of the achievement of the following 2018 EWT milestones to date:
- Approximately US$1.1 million gross 2018 HH-1 oil sales achieved to date from the KL3 and Portland (this figure excludes the KL4 oil reservoir, which will be tested shortly).
- 13,920 bbl (2.21 million litres) total KL3 and Portland production as of 0700 14 November.
- 10,248 bbl (1.63 million litres) of 40° API produced solely from the KL3 as of 0700 14 November.
- 15,860 bbl (2.52 million litres) aggregate total oil production from the 2016 and 2018 tests.
Finally, the Operator has provided the following KL3 EWT Update:
- 10,248 bbl of KL3 oil was produced over 30 days of sustained daily natural and pumped flow from an 83 ft perforated interval. The programme included 9 days of pressure build-ups (or "shut-ins") and downhole sampling. Production was achieved via a variety of choke sizes whilst maintaining stable bottom hole pressures. No formation water was returned to surface; however, small intermittent slugs of completion brine were recorded.
- KL3 produced at an initial metered sustained natural flow rate of 771 barrels of oil per day ("bopd"), with a maximum recorded half hourly rate of 902 bopd. The average sustained daily rate over the full test period was 342 bopd. Prior to the final shut-in period the well was producing oil at a stable bottom hole pressure of around 800 psi.
- Total KL3 gas production to date is 3.5 million cubic feet ("cu ft"), with daily produced amounts through the enclosed flare falling within the Environment Agency's permitted limits and parameters.
- EWT results to date indicate that the KL3 oil pool "seen" by HH-1 is commercially viable.* Consequently, following completion of the KL4 EWT, continued test production of a commingled KL3 and KL4 oil stream is planned.
- Other than at weekends, when planning restrictions apply, over 40 road tankers (of 220 barrels crude oil capacity) have exported KL3 crude oil to BP's Hamble oil terminal, with around 500 barrels of stock tank oil remaining at the site for subsequent export. The KL3's Brent quality crude has been sold at prevailing Brent crude oil prices less a small deduction for handling.
- KL4, which flowed at a reported stable dry oil rate of 901 barrels of oil per day over a 4-hour period in 2016, will be flow tested after completion of the current KL3 pressure build-up.
George Frangeskides, Alba's Executive Chairman, commented:
"It is very encouraging to Alba, as a significant stakeholder in the Horse Hill project, to learn that the 2018 EWT's total test production has now reached almost 14,000 barrels of oil, with over 10,000 barrels to date from the single Kimmeridge KL3 horizon. These production figures mark a significant milestone in the history of the Project."
"We now look forward to the forthcoming KL4 EWT programme and the prospect of KL3 and KL4 commingled test production."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
*NB: Alba awaits the Operator's definitive analysis of the commercial viability of the Kimmeridge limestones following the completion of the current testing programme.
Qualified Person's Statement
The technical information contained in this announcement has been reviewed and approved by Feroz Sultan (B.Sc (Hons) Geology, M.Sc, Petroleum and Structural Geology, Karachi and M.Sc Petroleum Geology, Imperial College London), a petroleum geologist with over 45 years' experience in the management, exploration, development and production of oil and gas.
For further information please contact:
Alba Mineral Resources plc
George Frangeskides, Executive Chairman +44 20 7264 4366
Cairn Financial Advisers LLP (Nomad)
James Caithie / Liam Murray +44 20 7213 0880
First Equity Limited (Broker)
Jason Robertson +44 20 7374 2212
Yellow Jersey PR (Financial PR/ IR)
Tim Thompson / Harriet Jackson / Henry Wilkinson +44 77 1071 8649
alba@yellowjerseypr.com
Glossary
°API | a measure of the density of crude oil, as defined by the American Petroleum Institute |
discovery | a discovery is a petroleum accumulation for which one or several exploratory wells have established through testing, sampling and/or logging the existence of a significant quantity of potentially moveable hydrocarbons |
extended well test | a well test, as per the permission granted by the Oil and Gas Authority, with an aggregate flow period duration over all zones of greater than 96 hours and up to 90 days maximum |
flow test | a flow test or well test involves testing a well by flowing hydrocarbons to surface, typically through a test separator. Key measured parameters are oil and gas flow rates, downhole pressure and surface pressure. The overall objective is to identify the well's capacity to produce hydrocarbons at a commercial flow rate |
Alba's Project & Investment Portfolio
Mining
Amitsoq (Graphite, Greenland): Alba owns a 90 per cent interest in the Amitsoq Graphite Project in Southern Greenland and has an option over the remaining 10 per cent.
Clogau (Gold, Wales): Alba owns a 90 per cent interest in Gold Mines of Wales Limited ("GMOW"), the ultimate owner of the Clogau Gold project situated in the Dolgellau Gold Belt in Wales.
Inglefield Land (Copper, Cobalt, Gold): Alba owns 100 per cent of mineral exploration licence 2017/40 in north-west Greenland.
Limerick (Base Metals, Ireland): Alba owns 100 per cent of the Limerick base metal project in the Republic of Ireland.
Melville Bay (Iron Ore, Greenland): Alba is entitled to a 51 per cent interest in mineral exploration licence 2017/41 in Melville Bay, north-west Greenland. The licence area benefits from an existing inferred JORC resource of 67 Mt @ 31.4% Fe.
Thule Black Sands (Ilmenite, Greenland): Alba owns 100 per cent of mineral exploration licences 2017/29 and 2017/39 in the Thule region, north-west Greenland.
Oil & Gas
Brockham (Oil & Gas, UK): Alba has a direct 5 per cent interest in Production Licence 235, which comprises the previously producing onshore Brockham Oil Field.
Horse Hill (Oil & Gas, UK): Alba holds a 18.1 per cent interest in Horse Hill Developments Limited, the company which has a 65 per cent participating interest and operatorship of the Horse Hill oil and gas project (licences PEDL 137 and PEDL 246 covering a total area of 142.9 km²) in the UK Weald Basin.
Web: www.albamineralresources.com
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