Last checked at 11 Jun 2019 07:00
UK Oil & Gas PLC
("UKOG" or the "Company")
Horse Hill-1 Test Hits Landmark 50,000 Barrels of Oil Production
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that, as at close of business on Friday 7th June, total aggregate Portland and Kimmeridge test oil production from the Horse Hill oil field, in which the Company has a 50.635% majority interest, reached a significant landmark of 50,000 barrels ("bbl") of light, sweet, dry oil. Total aggregate test production now stands at 50,871 bbl.
Horse Hill-1 continues to produce Portland oil at a stable rate of over 220 barrels of oil per day ("bopd") via a modest pressure draw down. The Portland has now delivered an aggregate total of 25,777 bbl to date, exceeding the 25,094 bbl produced from the deeper Kimmeridge. During the test, no formation water has been produced from either the Portland or Kimmeridge reservoirs.
Portland test production is now planned to continue until the second half of June when final site preparations for simultaneous HH-2/2z Portland drilling and HH-1 Kimmeridge production operations will commence. To facilitate both safe drilling and coring of HH-2/2z through the Portland, to provide continued oil sales revenues and further valuable test data prior to drilling HH-1z, preparations will include switching test production to the deeper Kimmeridge oil pool. Further necessary logistic and administrative arrangements for the arrival of the drilling rig and associated services are scheduled to be finalised this week.
The Horse Hill oil field and surrounding highly prospective PEDL137 and PEDL246 licences are operated by UKOG's subsidiary company Horse Hill Developments Ltd, in which UKOG holds a 77.9% direct interest.
Horse Hill 2018-19 EWT Oil Production Milestones:
· 50,871 bbl aggregate Kimmeridge and Portland oil production
· 25,777 bbl total Portland production
· 25,094 bbl total Kimmeridge oil production
· No discernible formation water produced from either reservoir
· Stable Portland test production continues to prove more oil in the ground
Stephen Sanderson, UKOG's Chief Executive, commented:
"The Horse Hill Portland continues to produce strongly and consistently under modest pressure draw downs, delivering over half of the landmark 50,871 bbl test production to date. With the much awaited simultaneous HH-2/2z Portland horizontal drilling and HH-1 Kimmeridge test campaign fast approaching, the remainder of the year at Horse Hill now promises to be truly exciting and potentially transformational for both Horse Hill and UKOG."
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 (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 / David Bick Tel: 01483 900582
Glossary
draw down | pressure drawdown (∆P) is defined as the difference between the reservoir pressure and the flowing bottom hole pressure. Drawdown enables fluids to flow from the reservoir into the wellbore. The magnitude of the drawdown is a major controlling factors of a well's production rate |
extended well test or production test | a well test, as per the permission granted by the Oil and Gas Authority, with an aggregate flow period duration over each zone of greater than 96 hours; the objective being to establish whether a discovery is commercially viable and the optimal methods of future production and recovery |
flow test | a flow test or well 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 |
oil field | an accumulation, pool or group of pools of oil in the subsurface that produces oil to surface |
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 3 | PEDL234 | 100% | UKOG (234) Ltd 4 | UKOG (234) Ltd 4 | 300.0 | BB-1 & 1z oil discovery, planning application approved |
A24 3 | PEDL143 | 40% | 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 | 50.635% | 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 | 50.635% | Horse Hill Developments Ltd⁶ | 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, development underway subject to grant of planning consent expected in Q3 2019.
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
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014