5 Nov 2014 08:00
Regency Mines PLC
("Regency" or the "Company")
Horse Hill-1 Provisional Results at TD, Weald Basin UK
5 November 2014
Regency today announces that the Horse Hill-1 well was successfully completed with a discovery in the Jurassic and has reached total depth ("TD") at 8,770 feet measured depth ("MD") in rocks of pre-Triassic Palaeozoic age, which were prognosed at that depth.
The well has been electrically logged from the previous casing point to TD and a vertical seismic profile ("VSP") has been acquired to correlate the well to the available 2D seismic data. The logs are now being analysed along with all other relevant data from the well and the initial results are set out below.
In addition, the well is currently being prepared for future flow testing in the identified Jurassic age Portland Sandstone discovery.
Portland Discovery
The well is currently being prepared for testing and as a probable future oil production well from the Portland Sandstone oil discovery, where, as announced on 24 October 2014, a preliminary most likely estimate of 3.1 million barrels ("mmbbls") of gross in place oil has been calculated within the upper Portland from a 102-foot gross oil column, with a further most likely unrisked undiscovered gross oil in place volume of 16.8 mmbbls in a separate lower sand in the Portland interval located in an untested fault block immediately to the south.
On completion of the analysis of the electric logs and the VSP, Horse Hill Developments Ltd ("HHDL") as operator, intends to apply to the Department of Energy and Climate Control ("DECC") for permission to carry out a flow test on the Portland Sandstone.
Kimmeridge Limestone Potential
Geochemical studies, to determine oil source rock richness and thermal maturity, are being conducted on rock samples from the Kimmeridge Clay, Oxford Clay and Liassic Shale formations encountered in the well. The geochemical analyses will be integrated with other data in order to evaluate the potential for Horse Hill-1, and the area to the southwest, to have generated hydrocarbons resulting in the trapping of oil in the Portland and other reservoir objectives within the southern area of PEDL 137.
Preliminary analysis of samples from the Kimmeridge Clay immediately below the Portland Sandstones, in a section which also contains oil shows and multiple limestone sections individually up to 105 feet in thickness (refer RNS dated 16 October 2014), have higher than expected oil source potential with a measured total organic carbon content ("TOC") of over 5% by weight. The operator continues to investigate the conventional potential of the Kimmeridge Limestones in a possibly analogous situation to the nearby Balcombe oil discovery.
Triassic Target
The Triassic target, which although previously untested was believed to have potential for gas, was penetrated at 8,054 feet MD and an approximately 380-foot thick interval, interpreted to be equivalent to the Rhaetic and Mercia Mudstone formations, and was drilled without any observable reservoir rocks or moveable gas being encountered.
The Mercia Mudstone overlies and seals the Triassic Sherwood Sandstone oil pool of the Wytch Farm Oil Field in the Wessex Basin. The Horse Hill-1 well results suggest the prognosed Triassic reservoir rocks, equivalent to the Sherwood Sandstone, are not developed this far north in the basin, though they may be developed to the southwest closer to the center of the basin.
The Marriott 50 rig will be demobilised over the coming week from the well site and all equipment will be removed pending a future decision on testing and production.
Andrew Bell, the Company's Chairman, commented:
"Whilst we are naturally disappointed that there was no gas discovery in the Triassic, we remain delighted that the well has made an oil discovery in the Jurassic Portland Sandstone and that further opportunities for additional oil potential have also been revealed by the well, particularly in the Kimmeridge Limestones, both in the licence block and in the wider Weald Basin, and that these are now in the process of being assessed.
"All the data from the well will now be fully analysed and a decision taken on the work necessary to appraise and develop the Portland discovery."
Regency interest in Horse Hill
The Horse Hill-1 well is located on the northern side of the Weald Basin near Gatwick Airport. Regency owns a 5% interest in HHDL, a special purpose company, and the Company also owns an additional 0.47% indirect interest in HHDL by virtue of its 9.39% ownership in Alba Mineral Resources Plc ("Alba"). Alba owns 5% of HHDL. HHDL is a special purpose company that owns a 65% participating interest and operatorship of onshore licences PEDL 137 and the adjacent licence PEDL 246 in the UK Weald Basin. The participants in the Horse Hill-1 well are HHDL with a 65% working interest and Magellan Petroleum Corporation with a 35% interest. Regency's net attributable interest in PEDL 137 and 246 is therefore 3.56%.
Competent 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 Bell0207 747 9960 or 0776 647 4849 Chairman Regency Mines Plc
Roland Cornish/Rosalind Hill Abrahams 0207 628 3396 NOMAD Beaumont Cornish Limited
Jason Robertson0129 351 7744 Broker Dowgate Capital Stockbrokers Ltd.
Rupert Trefgarne0203 128 8817 Media Relations MHP Communications
Glossary:
2D seismic | seismic data collected using the two-dimensional common depth point method |
contingent resources | those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent Resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality |
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 |
electric logs | tools used within the wellbore to measure the rock and fluid properties of surrounding rock formations |
MD | measured depth |
reservoir | a subsurface rock formation containing an individual natural accumulation of moveable petroleum that is confined by impermeable rock/formations |
oil in place | The quantity of oil or petroleum that is estimated to exist originally in naturally occurring accumulations before any extraction or production |
TD | total depth |
TOC | total organic carbon - a measure of hydrocarbon source rock richness |
TVDss | true vertical depth below a subsea datum |
undiscovered | those quantities of petroleum which are estimated, as of a given date, to be contained within accumulations that have not been tested by drilling |
VSP | vertical seismic profile |