1 Mar 2016 07:00
1 March 2016
REGENCY MINES PLC
("Regency" or the "Company")
Update on Flow Test at Horse Hill
Horse Hill-1 Oil Discovery Flows 900 barrels per day from second zone
Regency Mines PLC (AIM:RGM) announces that Horse Hill Developments Limited ("HHDL") has informed the Company that 100% dry , 40-degree API, light, sweet oil has flowed naturally to surface at an average stabilised rate in excess of 900 barrels per day from an 88-foot aggregate perforated zone within the Upper Kimmeridge limestone interval at a depth of approximately 840 metres below ground level.
Restricted flow of 100% dry oil, using a 1-inch choke, commenced at around 1345 hrs GMT yesterday at an initial instantaneous rate in excess of 700 barrels per day ("bopd"). At circa 1400 hrs the well started flowing naturally and the pump was stopped. Natural flow rose to over 900 bopd at 1415 hrs. Flow of dry oil then stabilised from 1415 to approximately 1830 hrs in excess of 900 bopd.
Note that as a consequence of flow initialisation via rod pump,, the initial natural flow rates stated above were further restricted by the rods within the 2 and 7/8-inch production tubing.
The well was shut in at approximately 1830 hrs yesterday. The well was opened and free 'natural' oil flow recommenced at 2234 hrs yesterday. The well was flowed to obtain a further stabilised flow period and reservoir engineering data. A further update will be provided once this new data is available.
With this stable Upper Kimmeridge limestone flow, the two Upper Kimmeridge and Lower Kimmeridge limestone intervals have now produced a combined average stable rate of over 1,360 bopd.As previously announced, on completion of this Upper Kimmeridge test, operations will move to the shallower Portland sandstone zone at approximately 615 metres below ground level.
Andrew Bell, Chairman, commented:
"The two Kimmeridge flow tests have not only shown that moveable oil exists within the Kimmeridge, but more importantly, that it can be extracted at high commercial rates from vertical wells without significant stimulation.
The Weald Basin of the UK must now undergo thorough re-evaluation for its commercial significance.
The HHDL consortium now intends, following the final flow test in the overlying Portland, to obtain speedily the necessary permissions to return to the well, drill a horizontal sidetrack and conduct long term production tests."
Background on Horse Hill
The original exploration drilling phase of the HH-1 discovery well was originally completed at the end of 2014. The HH-1 well is located within onshore exploration Licence PEDL137, on the northern side of the Weald Basin near Gatwick Airport. RGM owns a 5% direct interest in HHDL. HHDL is a special purpose company that owns a 65% participating interest and operatorship of Licence PEDL137 and the adjacent Licence PEDL246 in the UK Weald Basin.
Qualified Person's Statement:
The technical information contained in this announcement has, for the purposes of the AIM Guidance Note for Mining, Oil and Gas companies has been reviewed and approved by Jonathan Tidswell-Pretorius, Executive director at HHDL and Chairman of Angus Energy Ltd a UK registered onshore operator who has 15 years of relevant experience in the oil and gas industry. Mr. Tidswell-Pretorius is a member of the Society of Petroleum Engineers and United Kingdom Onshore Oil and Gas (UKOOG) industry bodies.
For further information, please contact:
Andrew Bell 0207 747 9960 Chairman Regency Mines Plc
Scott Kaintz 0207 747 9960 Executive Director Regency Mines Plc
Roland Cornish/Rosalind Hill Abrahams 0207 628 3396 NOMAD Beaumont Cornish Limited
Jason Robertson 0129 351 7744 Broker Dowgate Capital Stockbrokers Ltd.
Christian Pickel 0203 128 8208 Media Relations MHP Communications
Glossary
choke | Device incorporating a fixed or variable orifice that is used to control fluid flow rate during testing of an exploratory discovery |
degree 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 flow test | a flow 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 |
limestone | a sedimentary rock predominantly composed of calcite (a crystalline mineral form of calcium carbonate) of organic, chemical or detrital origin. Minor amounts of dolomite, chert and clay are common in limestones. Chalk is a form of fine-grained limestone |
sandstone | a clastic sedimentary rock whose grains are predominantly sand-sized. The term is commonly used to imply consolidated sand or a rock made of predominantly quartz sand. |
sweet oil or crude | A type of oil that contains less than 0.42% Sulphur |