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26 Jun 2017 08:21
UK Oil & Gas Investments PLC
("UKOG" or the "Company")
Further Oil Seeps from Kimmeridge Limestone Core Samples at Broadford Bridge-1 Exploration Well, PEDL234 Licence, Weald Basin, UK
UK Oil & Gas Investments PLC (London AIM and NEX: UKOG) is delighted to announce that core, totalling 330 ft, has been successfully recovered from the Kimmeridge Limestone 4 ("KL4") target zone at its 100%-owned Broadford Bridge-1 ("BB-1") exploration well. Mobile light oil continued to be observed seeping from multiple sections of fractured KL4 calcareous shales and limestones throughout the cored section. Wet gas readings maintained high levels throughout the coring, being almost identical to those seen at the Horse Hill-1 ("HH-1") Kimmeridge Limestone oil discovery, 27 km to the north east. Mobile Kimmeridge oil was also recovered from the drilling fluid. Further core will be taken through the deeper KL3 target zone.
The presence of light mobile oil in fractured Kimmeridge shales is highly significant. At first look, this corroborates the finding from Horse Hill-1 that oil production was likely derived from a much larger reservoir "tank" than the two KL3 and KL4 zones alone. The possibility that we have encountered a single 600-700 feet thick, naturally fractured oil reservoir section, encompassing all four Kimmeridge Limestones and underlying a significant proportion of the wider Weald Basin, will now be rigorously examined during the flow testing programme.
The well remains on schedule and under budget.
The core taken to date in the Upper Kimmeridge Shales and Limestones is now under extensive geological, petrophysical and geo-mechanical analysis by COREX in Aberdeen and Premier Oilfield Laboratories in Houston, Texas, and Bartlesville, Oklahoma, USA.
Stephen Sanderson, UKOG's Executive Chairman commented:
"The coring programme continues to deliver positive results and important new insights into this continuous oil accumulation, the first of its kind discovered in the UK.
Following the KL3 and contingent KL2 coring programmes, we will run electric logs, set the final 7-inch steel casing and then, following the grant of the remaining necessary regulatory permissions, move straight to extended flow testing operations around the second half of July."
About Coring
Coring is 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 core bit. Core is normally cut in 30 feet lengths, or multiples of 30 feet, and in the case of BB-1 with a diameter of 4 inches. Core is taken in petroleum reservoir rocks for detailed laboratory analyses of geological, petrophysical and geomechanical parameters, and of any hydrocarbons and fluids contained within the rock.
About BB-1
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 ("KOGL"). The well, an exploration step-out, is designed to penetrate four naturally fractured Kimmeridge Limestone units (KL1-KL4), the uppermost two units of which flowed at record rates in the Horse Hill-1 discovery near Gatwick Airport.
Importantly, to prove that the Kimmeridge Limestones lie within an extensive continuous oil deposit, the BB-1 well was deliberately designed to test a feature with no structural or stratigraphic closure at the KL1-KL4 horizons.
The plan is now to core the KL3 target zone and then continue to drill 8 ½" diameter hole at a constant inclination of 54 degrees to vertical to total depth. Further core may be taken in KL2. The planned overall horizontal deviation of the well is approximately 1 km. The Kimmeridge Limestones (KL 1 to KL4) are expected to be encountered at a drilled depth of approximately 1250-1700 metres, which equates to around 950-1200 metres vertically below the surface.
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:
casing | heavy gauge steel tubing designed to line the wall of a well. The casing provides a safe controlled space in which the drill pipe and bit can operate in isolation from conditions in overlying rock units. The steel tubing is bonded to the surrounding rock by impermeable concrete, known as "cement" |
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 |
continuous oil deposit or resource deposit | a petroleum accumulation that is pervasive throughout a large area, which is not significantly affected by hydrodynamic influences (i.e. the buoyancy of oil in water) and is not trapped by structural or stratigraphic geological conditions. The deposit, in contrast to conventional accumulations, has therefore not accumulated by the migration of petroleum over medium to long distances. The petroleum in such deposits is found within, or immediately adjacent or close to, the pore spaces where the petroleum is generated, i.e. those pore spaces lying within petroleum source rocks containing organic rich compounds (kerogen) that, when heated over geological time, transform into petroleum. These accumulations are generally associated with organic-rich shales such as the Kimmeridge Clay Formation. Such accumulations do not generally contain significant volumes of free, mobile formation water and therefore have no observable hydrocarbon-water contacts. The extent of the accumulation is generally defined by the limit of where burial depths have been sufficient to transform organic matter within the petroleum source rock unit into petroleum. |
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 |
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 |
shale | a fissile rock that is formed by the consolidation of clay, mud, or silt particles, and that has a finely stratified or laminated structure. Certain shales, such as those of the Kimmeridge Clay, often contain a significant proportion of organic material, which when subject to increasing temperature and pressure over geological time transform into petroleum (known as petroleum "source rocks") |
step-out well | a well specifically designed to determine the lateral extent of a discovered hydrocarbon accumulation or play |
wet gas | natural gas, predominantly consisting of methane (C1), ethane (C2) and propane (C3) but also containing the longer molecular chain natural gases butane and iso-butane (C4), pentane and iso-pentane (C5). The C4 and C5 gases are created during oil-generation within a petroleum source rock unit when oil is thermally cracked. At Horse Hill these natural gases lie in solution with the oil in the KL3 and KL4 Kimmeridge Limestone reservoirs (i.e. solution or associated gas and not as a separate free-gas phase). |
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.
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.
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