3 Aug 2018 11:30
FOR IMMEDIATE RELEASE
3 August 2018
SOLO OIL PLC
("Solo" or the "Company")
Update on Portland Extended Flow Test ("EWT") at Horse Hill-1, PEDL137, Weald Basin, UK
Solo Oil plc (LSE AIM: SOLO) is pleased to note the announcement made today by UK Oil & Gas Investments PLC entitled "Portland high-rate flow test successfully completed Horse Hill-1 ("HH-1") Portland and Kimmeridge oil discovery, Weald Basin, UK" as set out in Appendix 1 below.
The Company holds a 9.75% beneficial interest in licence PEDL137 containing the HH-1 oil discovery.
Neil Ritson, Solo's Chairman, commented:
"The recent high rate test of the Portland Sandstone continues the very positive indications already seen after re-opening the well and re-establishing flow from the Portland oil reservoir previously tested in 2016. It should be stressed, however, that these rates are not the long-term sustainable rates of production from the well on which commerciality will be based and that Portland testing operations are continuing. Tests of the Kimmeridge Limestones are also to follow and the EWT program is expected to continue for a further 4 months during which we anticipate further positive results to be announced. "
For further information:
Solo Oil plc Neil Ritson / Dan Maling | +44 (0) 20 7440 0642 |
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Beaumont Cornish Limited Nominated Adviser Roland Cornish / Rosalind Abrahams | +44 (0) 20 7628 3396 |
Shore Capital Broker Jerry Keen
Buchanan (PR) Ben Romney / Chris Judd / Henry Wilson
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+44 (0) 20 7408 4090
+44 (0) 20 7466 5000 |
UK Oil & Gas PLC
("UKOG" or the "Company")
Portland high-rate flow test successfully completed
Horse Hill-1 ("HH-1") Portland and Kimmeridge oil discovery, Weald Basin, UK
Highlights:
· Portland short-term high rate tests achieve stable implied equivalent daily pumped rates of 401 and 414 barrels of oil per day ("bopd") of dry 36 API oil over two periods of 6 and 2 hours, respectively. Maximum instantaneous half-hourly pumped rates of 441 and 470 bopd.
· The maximum rate recorded was limited by the rod pump's maximum rate capacity of approximately 470 bopd. Higher capacity rod pump sourced and mobilised for use at HH-1.
· Metered daily oil rates and recovered Portland volumes to date exceed 2016 test values.
· Associated solution gas rates of around 41,000 cu ft per day.
· Forward extended well test ("EWT") programme includes flow optimisation necessary to determine the maximum sustainable long-term flow rate and a lengthy stabilised flow period to test if the well accesses a commercially viable oil volume.
· The primary EWT objective, to establish the commerciality of the Kimmeridge Limestone 3 & 4 oil pools, will follow directly after the completion of the Portland test sequence.
UK Oil & Gas PLC (London AIM: UKOG) announces that Horse Hill Developments Ltd, the operator of the HH-1 Kimmeridge and Portland oil discovery, located in licence PEDL137, in which UKOG holds a 32.435% beneficial interest, has informed the Company that the planned high rate Portland test sequence, designed to assess the reservoir's maximum short-term flow capacity, has been successfully completed. Stable implied daily pumped rates of 401 and 414 bopd of dry 36 API oil were recorded over two periods of 6 and 2 hours, respectively, with associated maximum half hourly pumped rates of 441 and 470 bopd. Metered solution gas rates of around 41,000 cu ft per day were recorded through the test separator over the two maximum rate periods.
As maximum initial rates were restricted by the pump's capacity of around 470 bopd, a larger capacity pump has been sourced and has been mobilised to site for possible use during the remainder of the Portland test sequence.
To date, the recorded implied daily oil rates and overall produced Portland oil volumes exceed those reported from the initial short-term test programme of March 2016. The Portland oil exported from HH-1 to date is of Brent Crude quality and exceeds minimum refinery specifications, containing only around 0.2% water content.
It should be noted that the above high rate results are not the long-term sustainable flow rates that will be utilised to assess the Portland's commercial viability as part of the next test phase.
Forward EWT Plans
Following a planned further short restricted flow period and pressure build up test, flow will be further optimised to determine the well's sustainable long-term production rate and to test whether the well can recover a commercially viable volume of oil.
The primary EWT objective of testing the two underlying Kimmeridge Limestone 3 & 4 oil pools, which in 2016 flowed 40 API crude naturally to surface at an aggregate implied stable dry oil rate of 1,365 bopd, will commence directly after completion of the Portland test.
Further updates will be provided as the EWT progresses.
Stephen Sanderson, UKOG's Chief Executive, commented:
"HH-1 continues to deliver positive results that exceed the 2016 Portland test outcomes. The excellent short-term high rate test results, combined with pressure build up data, provide further confidence that the next phases of the Portland test can deliver both an optimal sustainable long-term flow rate and deliver the primary objective of confirming the Portland's commercial viability.
Whilst the potential future near-term cash flow from the Portland is very important to UKOG, we should not lose sight of the significance of the potential prize that lies in the underlying primary Kimmeridge objective, the long-term testing of which will follow directly after the Portland programme.
Following our readmission to AIM as an operating company, a major corporate milestone, we are also delighted that Allen Howard has been appointed as non-executive chairman and Nicholas Mardon Taylor has joined the board as a non-executive director. Nicholas' depth and breadth of financial experience in both oil and gas and other sectors will be a highly valuable addition to the Company."
Qualified Person's Statement
Rob Wallace, UKOG's principal technical advisor, who has over 40 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Wallace is a Chartered Scientist, Chartered Geologist and Fellow of the Geological Society of London, an active member of the American Association of Petroleum Geologists, a member of the Petroleum Exploration Society of Great Britain and a member of the South African Geophysical Society.
For further information, please contact:
UK Oil & Gas Investments PLC
Stephen Sanderson / Kiran Morzaria Tel: 01483 243450
WH Ireland (Nominated Adviser and Broker)
James Joyce / James Sinclair-Ford Tel: 020 7220 1666
Cenkos Securities PLC (Joint Broker)
Joe Nally / Neil McDonald Tel: 0207 397 8919
Public Relations
Brian Alexander / David Bick Tel: 01483 243450
UKOG Licence Interests
The Company has interests in the following UK licences:
Asset | Licence | UKOG's Interest | Licence Holder | Operator | Area (km2) | Status |
Avington 1 | PEDL070 | 5% | UKOG (GB) Limited | IGas Energy Plc | 18.3 | Field currently shut in |
Broadford Bridge 3 | PEDL234 | 100% | Kimmeridge Oil & Gas Limited 4 | Kimmeridge Oil & Gas Limited 4 | 300.0 | BB-1 & 1z completed, preparing two further planning applications |
Holmwood 3 | PEDL143 | 40% | UKOG | Europa Oil & Gas (Holdings) plc | 91.8 | Holmwood-1 exploration well planned in 2018 |
Horndean 1 | PL211 | 10% | UKOG (GB) Limited | IGas Energy Plc | 27.3 | Field in stable production |
Horse Hill 5 | PEDL137 | 32.435% | Horse Hill Developments Ltd ⁶ | Horse Hill Developments Ltd ⁶ | 99.3 | Production tests and further appraisal well(s) scheduled for 2018 |
Horse Hill 5 | PEDL246 | 32.435% | Horse Hill Developments Ltd⁶ | Horse Hill Developments Ltd ⁶ | 43.6 | As above |
Isle of Wight (Onshore) 2, 3 | PEDL331 | 65% | UKOG | UKOG | 200.0 | Preparing Arreton-3 oil discovery appraisal well planning submission |
Markwells Wood 2 | PEDL126 | 100% | UKOG (GB) Limited | UKOG (GB) Limited | 11.2 | Revised drilling and testing planning application underway |
Notes:
1. Oil field currently in production.
2. Oil discovery pending development and/or appraisal drilling.
3. Exploration asset with drillable prospects and leads. PEDL234 contains the Broadford Bridge-1 and 1z discovery well, the extension of the Godley Bridge Portland gas discovery plus further exploration prospects.
4. UKOG has a 100% interest in Kimmeridge Oil & Gas Limited, which has a 100% interest in PEDL234.
5. Oil discovery with successful flow test in 3 zones, further long-term testing scheduled in 2018
6. UKOG has a direct 49.9% interest in HHDL, which has a 65% interest in PEDL137 and PEDL246.
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.