Last checked at 12 Sep 2019 07:00
UK Oil & Gas PLC
("UKOG" or the "Company")
Horse Hill-1 and Horse Hill-2/2z drilling and testing update
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that final site works to accommodate the arrival of the rig to drill the new Horse Hill-2/2z ("HH-2/2z") Portland horizontal well commenced at 1200 hrs, Friday 30 August and were completed yesterday. Test production from the Horse Hill-1 ("HH-1") Kimmeridge oil pool was temporarily shut-in to permit oil storage tanks and flowlines to be relocated to enable safe simultaneous drilling and HH-1 testing operations. Kimmeridge test oil production has now resumed and will continue until the rig arrives, when a further short shut-in will occur to enable the HH-2/2z drilling set-up to be assembled.
Prior to the current shut-in, Kimmeridge test production reached a total of 36,559 barrels ("bbl") of dry Brent quality crude at a final metered rate of 313 bbl of oil per day ("bopd") over the final 48 hour test period. Peak instantaneous rates of up to 374 bopd were recorded during this period. Total aggregate Portland and Kimmeridge test production now stands at a landmark 66,127 bbl. Kimmeridge production is planned to continue during the drilling campaign.
Having signed the relevant drilling and service contracts, the rig is now scheduled to arrive later in September to commence drilling and coring the HH-2 vertical pilot hole, expected to be completed in around 30 days from start. The horizontal well section, HH-2z, with a planned trajectory of up to 1000m wholly within the Portland reservoir, will follow directly afterwards. Further operational updates will be issued in due course.
Following UKOG's recent acquisition of Tellurian's 35% direct share of Horse Hill, the Company now holds a controlling 85.635% interest in the field and surrounding highly prospective PEDL137 and PEDL246 licences, which continue to be operated by UKOG's subsidiary company, Horse Hill Developments Ltd, in which UKOG holds a 77.9% direct controlling interest.
Horse Hill 2018-19 Test Oil Production Milestones:
·; 66,127 bbl aggregate Kimmeridge and Portland oil production
·; 36,559 bbl total Kimmeridge oil production
·; 29,568 bbl total Portland production
·; No discernible formation water produced from either reservoir
Stephen Sanderson, UKOG's Chief Executive, commented:
"Following our transformational acquisition of a further 35% interest in Horse Hill, our attention is now firmly refocused upon the Portland oil pool and the drilling of the much anticipated HH-2/2z Portland horizontal well, a key step towards establishing significant long-term production and cash flow from Horse Hill by the end of the year. Meanwhile, the Kimmeridge continues to produce solidly and beyond our technical expectations, which bodes extremely well for the future Kimmeridge development at Horse Hill and elsewhere in our licences in the Weald Basin."
Qualified Person's Statement
Matt Cartwright, UKOG's Commercial Director, who has over 35 years of relevant experience in the global oil industry, has approved the information contained in this announcement. Mr Cartwright is a Chartered Engineer and member of the Society of Petroleum Engineers.
For further information, please contact:
UK Oil & Gas PLC
Stephen Sanderson / Kiran Morzaria Tel: 01483 900582
WH Ireland Ltd (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
Novum Securities (Joint Broker)
John Bellis Tel: 020 7399 9400
Public Relations
Brian Alexander Tel: 01483 900582
Glossary
horizontal well | a well that during drilling is steered so as to follow and remain within a particular geological stratum or reservoir unit having a trajectory that runs approximately parallel to the top and or base of the target horizon |
oil field | an accumulation, pool or group of pools of oil in the subsurface that produces oil to surface |
well test | or flow 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. |
UKOG Licence Interests
The Company has interests in the following UK licences:
Asset | Licence | UKOG Interest | Licence Holder | Operator | Area (km2) | Status |
Avington 1 | PEDL070 | 5% | UKOG (GB) Limited | IGas Energy Plc | 18.3 | Field currently temporarily shut in |
Broadford Bridge/Loxley/Godley Bridge 2, 3, 8 | PEDL234 | 100% | UKOG (234) Ltd 4 | UKOG (234) Ltd 4 | 300.0 | BB-1/1z oil discovery, Loxley-1 gas appraisal well planning application submitted |
A24 3 | PEDL143 | 67.5% | UKOG | UKOG 7 | 91.8 | Finalising new site selection to drill Portland and Kimmeridge prospects |
Horndean 1 | PL211 | 10% | UKOG (GB) Limited | IGas Energy Plc | 27.3 | Field in stable production |
Horse Hill 5 | PEDL137 | 85.635% | Horse Hill Developments Ltd ⁶ | Horse Hill Developments Ltd ⁶ | 99.3 | Production tests ongoing, two further appraisal wells scheduled for 2019 |
Horse Hill 5 | PEDL246 | 85.635% | Horse Hill Developments Ltd ⁶ | Horse Hill Developments Ltd ⁶ | 43.6 | As above |
Isle of Wight (Onshore) 2, 3 | PEDL331 | 95% | UKOG | UKOG | 200.0 | Preparing planning submission for Arreton-3 oil appraisal well and Arreton South exploration well |
Markwells Wood | PEDL126 | 100% | UKOG (GB) Limited | UKOG (GB) Limited | 11.2 | MW-1 P&A |
Notes:
1. Oil field currently in stable production.
2. Oil discovery pending development and/or appraisal drilling.
3. Exploration asset with drillable prospects and leads.
4. Contains the Broadford Bridge-1/1z Kimmeridge oil discovery, the eastern extension of the Godley Bridge Portland gas discovery plus further undrilled Kimmeridge exploration prospects.
5. Oil field with three productive and commercially viable zones, EWT ongoing, further drilling campaign scheduled, production planning consent granted in September 2019, development underway.
6. UKOG has a direct 77.9% interest in HHDL, which has a 65% interest in PEDL137 and PEDL246.
7. OGA consent received for the transfer of operatorship from Europa to UKOG
8. Gas discovery pending appraisal drilling and development with underlying Kimmeridge potential
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014