Last checked at 1 Aug 2019 07:00
UK Oil & Gas PLC
("UKOG" or the "Company")
Horse Hill-1 production hits 60,000 barrels via new Phase 2 Kimmeridge test
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that in preparation for the late summer start of the Horse Hill-2/2z ("HH-2/2z") Portland drilling programme, test production was switched successfully from the Portland to the deeper Kimmeridge oil pool. From 6th July to date, the Phase 2 Kimmeridge test has produced a further 5,524 barrels ("bbl") of dry Brent quality oil. Total aggregate Portland and Kimmeridge test oil production from the Horse Hill oil field, in which the Company has a 50.635% majority interest, now totals a significant landmark of 60,186 barrels ("bbl").
Kimmeridge oil flow was re-established at initial half-hourly metered rates of up to 332 bbl of oil per day ("bopd"), with continued stable production of dry oil at daily rates of 200-266 bopd. Total Kimmeridge production to date, now exceeds 30,618 bbl with no apparent produced formation water. Following a 5-month shut-in, flow rates and flowing bottom hole pressures appear more stable than during Phase 1 Kimmeridge testing.
Prior to the Kimmeridge production switch, which was necessary for the safe drilling and coring of HH-2/2z through the Portland reservoir, total aggregate Portland production reached 29,568 bbl, with HH-1 continuing to produce dry Portland oil at a stable rate of over 220 bopd. Preliminary Company analysis of the final Portland pressure build-up test, indicates that the Portland connected oil volume accessed by HH-1 has significantly increased from 7-11 million bbl to 11-14 million bbl, a robustly commercial volume.
Kimmeridge test production is planned to continue throughout the drilling of HH-2/2z except for two short shut-ins to enable the moving of oil storage tanks and installation of the drilling rig. The drilling rig is now scheduled to arrive on site following routine servicing after the completion of its current job.
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:
·; 60,186 bbl aggregate Kimmeridge and Portland oil production
·; 29,568 bbl total Portland production
·; 30,618 bbl total Kimmeridge oil production
·; No discernible formation water produced from either reservoir
·; Stable Portland test production has continued to prove more oil in the ground
·; Kimmeridge flow resumed at more stable rates and flowing pressures after 5 month shut-in
Stephen Sanderson, UKOG's Chief Executive, commented:
"The resumption of Kimmeridge oil flow at more stable rates than previously seen is welcome news for the Kimmeridge's commercial future and further justifies the decision to conduct simultaneous Portland drilling and HH-1 Kimmeridge test production at the site. The successful production switch from Portland to Kimmeridge now paves the way for the expected late summer arrival of the rig and the HH-2/2z Portland horizontal drilling and testing campaign.
The test results to date also signify that after a year of production testing, the simple non-optimised vertical HH-1 well remains capable of continuous production from both Portland and Kimmeridge zones at an aggregate rate of 450 bopd. Consequently, as a result of the test's ongoing success, in the opinion of the Directors, the future potential for significantly higher rates from the Portland HH-2z horizontal together with production from the underlying Kimmeridge therefore remains an even more tangible, imminent and exciting prospect."
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
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 20 ft lengths, or multiples of 20 ft, 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 |
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 |
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 |
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 | 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 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, 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
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