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Horse Hill Granted Long-Term Production Consent

Fri, 13th Mar 2020 07:00

RNS Number : 0197G
UK Oil & Gas PLC
13 March 2020
 

UK Oil & Gas PLC

("UKOG" or the "Company")

 

Horse Hill Field Granted Long-Term Production Consent by OGA

 

 

 

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that the Oil and Gas Authority has approved the Horse Hill Field Development Plan and consented to the start of long-term production ("Production") from the field.

 

This key consent will enable net recoverable reserves to be allocated to the Company, a pre-requisite for future potential debt-based funding. It will also permit the Company to enter into long-term field operations contracts which can help reduce operating costs below $19 per barrel, making the field more profitable even at current low oil prices.   

 

Portland oil pool Production will commence via Horse Hill-1 ("HH-1"), with Kimmeridge Production planned to be added in late spring via a conversion of the well to a dual completion. Production from HH-2z is planned to follow upon completion of the current extended well testing campaign.

 

UKOG holds a controlling 85.635% interest in the Horse Hill oil field and surrounding highly prospective PEDL137 and PEDL246 licences, which are operated by UKOG's subsidiary company, Horse Hill Developments Ltd.

 

Stephen Sanderson, UKOG's Chief Executive, commented:

 

"This is an important regulatory milestone, granting governmental Production consent. The Company can now focus firmly upon maximising stable production, reducing operating costs and generating positive cash flow. The ability to book reserves also opens the way to potential debt funding, a positive step towards both creation and preservation of shareholder value."

 

Qualified Person's Statement

 

Matt Cartwright, UKOG's Commercial Director, who has over 36 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 941493

 

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: 020 7397 8919

 

Novum Securities (Joint Broker)                                                                                                              

John Bellis                                                                                                     Tel: 020 7399 9400

 

Public Relations

Brian Alexander                                                                                           Tel: 01483 941493

 

Glossary

 

 

dual completion

a production well with two sets of steel production tubing and pumps which enables two separate oil pools to be produced simultaneously

oil field

an accumulation, pool or group of pools of oil in the subsurface that produces oil to surface

reserves

Those quantities of petroleum that, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable from a given date forward from known reservoirs and under defined economic conditions, operating methods, and government regulations.

well test

or flow test involves testing a well by flowing hydrocarbons to surface, typically through a test separator over a flowing period of up to 96 hours; 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 and volumes. An extended well test or EWT is a well test with duration of over 96 hours and up to 90 or 180 flowing days aimed at assessing longer term production viability and the connected oil in place seen by the well.

 

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, HH-2/2z drilling completed

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 oil appraisal well and Godshill 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.  Portland and Kimmeridge oil field with productive and commercially viable zones, EWT ongoing, production planning consent granted in September 2019, appraisal/development drilling campaign completed. Long term Production start expected Spring 2020.

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

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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