Last checked at 30 May 2017 08:45
UK Oil & Gas Investments PLC
("UKOG" or the "Company")
Drilling Commences at 100% Owned Broadford Bridge-1 Kimmeridge Exploration Well
PEDL234 Licence, Weald Basin, UK
UK Oil & Gas Investments PLC (London AIM and NEX: UKOG) announces that drilling operations on its 100% interest Broadford Bridge-1 ("BB-1") Kimmeridge Limestone exploration well commenced on schedule at 1700 hrs on Monday 29 May. The well will test a mirror image geological look-alike to the Company's Horse Hill oil discovery, which, as previously reported in March 2016, flowed oil at a record stable aggregate rate of 1365 barrels of oil per day from two naturally fractured Kimmeridge Limestone rock units (KL3 and KL4).
BB-1 is located near Billingshurst, West Sussex, within the 300 km² PEDL234 licence, in which the Company has a 100% interest via its ownership of the licence's operator, Kimmeridge Oil & Gas Limited.
Drilling, using tried, trusted and safe conventional techniques, commenced with a 17½-inch diameter vertical hole within the 300-metre thick Weald Clay rock unit, which directly underlies the well site. Drilling operations will continue until the well reaches a total drilled depth of around 1900 metres within the Jurassic Corallian sandstone, a secondary reservoir objective which underlies the Kimmeridge.
The BB-1 well, an exploration step-out, is designed to penetrate the four target Kimmeridge Limestone units (KL1-KL4), at an inclination of around 50 degrees to vertical and at approximately 90 degrees to the predicted orientation of open natural fractures within the Kimmeridge. The planned overall horizontal deviation of the well is approximately 1 km to the north-northeast of the well site. The Kimmeridge Limestones are expected to be encountered at a drilled depth of approximately 1300-1700 metres, which equates to around 950 -1200 metres vertically below surface.
Even though there are no potable drinking water sources underlying or surrounding the BB-1 site, it is the Company's policy to ensure that UKOG's drilling has zero-impact on any groundwater or potable water sources. Consequently, BB-1 uses a British made, zero-hazard, non-toxic, water-based drilling fluid to lubricate the drill-bit. This drilling fluid (or "mud") is made from biodegradable, modified natural plant starches.
All regulatory permissions to drill the well, from the Oil and Gas Authority ("OGA"), the Environment Agency ("EA"), West Sussex County Council and the Health and Safety Executive, are in place and available on UKOG's website. In the event of a discovery, final consents to test the well after the drilling phase are expected from the EA and OGA in due course.
Stephen Sanderson, UKOG's Executive Chairman commented:
"BB-1's prime objective is to demonstrate that moveable light oil in commercial quantities exists within the Kimmeridge Limestones on the southern side of the Weald Basin, over 30 km to the southwest of the Horse Hill Kimmeridge oil discovery. This finding would demonstrate conclusively that the Kimmeridge contains a significant continuous oil deposit, straddling the entire central area of the Weald Basin from Horse Hill to BB-1. If proven, UKOG, as the largest licence holder in the Weald Basin and in the Kimmeridge play, is ideally positioned to take full commercial advantage this oil deposit.
We look forward to the results of the drilling, extensive coring, electric logging and comprehensive borehole imaging programme, and ultimately to long-term flow testing of BB-1 in the summer."
Qualified Person's Statement
Stephen Sanderson, UKOG's Executive Chairman, who has over 35 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Sanderson is a Fellow of the Geological Society of London and is an active member of the American Association of Petroleum Geologists.
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 Bavister Tel: 020 7220 1666
Cenkos Securities PLC (Joint Broker)
Nick Tulloch / Neil McDonald Tel: 0131 220 6939
Square 1 Consulting (Public Relations)
Brian Alexander / David Bick Tel: 01483 243450 / 020 7929 5599
Glossary:
core or coring | a drilling technique that involves using a doughnut-shaped drilling bit to capture or "cut" a continuous cylinder-shaped core of undamaged in-situ rock. The core is captured in a steel pipe or "core barrel" above the bit. Core is normally cut in 30 feet lengths, or multiples of 30 feet, and normally with a diameter of 3.5 or 4 inches. Core is taken in petroleum reservoir rocks for detailed laboratory analyses of petrophysical and geomechanical parameters. |
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 |
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 |
naturally fractured reservoir | a fractured reservoir contains open and usually connected cracks or fissures within the rock matrix; fractures can enhance permeability of rocks greatly by connecting pore-spaces together; naturally fractured reservoirs have been created over geological time by nature, not man-made via hydraulic fracturing |
step-out well | a well specifically designed to determine the lateral extent of a discovered hydrocarbon accumulation or play. |
UKOG Licence Interests
The Company has interests in the following ten 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 in stable production |
Baxters Copse 2 | PEDL233 | 50% | UKOG Weald Limited | IGas Energy Plc | 89.6 | Appraisal/development well planned; licence extended to 2018 |
Broadford Bridge 3 | PEDL234 | 100% | Kimmeridge Oil & Gas Limited 4 | Kimmeridge Oil & Gas Limited 4 | 300.0 | BB-1 drilling underway |
Holmwood 3 | PEDL143 | 30% | UKOG | Europa Oil & Gas (Holdings) plc | 91.8 | Holmwood-1 exploration well planned in 2017 |
Horndean 1 | PL211 | 10% | UKOG (GB) Limited | IGas Energy Plc | 27.3 | Field in stable production |
Horse Hill 5 | PEDL137 | 31.2% | Horse Hill Developments Ltd ⁶ | Horse Hill Developments Ltd ⁶ | 99.3 | Submitted planning application for long term production tests and drilling of two wells |
Horse Hill 5 | PEDL246 | 31.2% | Horse Hill Developments Ltd⁶ | Horse Hill Developments Ltd ⁶ | 43.6 | As above |
Isle of Wight (Offshore) 3 | P1916 | 100% | UKOG Solent Limited | UKOG Solent Limited | 46.7 | Preparing drilling planning submission |
Isle of Wight (Onshore) 2, 3 | PEDL331 | 65% | UKOG | TBA | 200.0 | Preparing drilling planning submission |
Markwells Wood 2 | PEDL126 | 100% | UKOG (GB) Limited | UKOG (GB) Limited | 11.2 | Submitted planning application for appraisal and field development |
Notes:
1. Oil field currently in production.
2. Oil discovery pending development and/or appraisal drilling.
3. Exploration asset with drillable prospects and leads. Contains the extension of the Godley Bridge Portland gas discovery and the site of the forthcoming Broadford Bridge-1 well.
4. UKOG has a 100% interest in Kimmeridge Oil & Gas Limited, which has a 100% interest in PEDL234.
5. Oil discovery with recently completed flow testing.
6. UKOG has a direct 48% interest in HHDL, which has a 65% interest in PEDL137 and PEDL246.