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Last checked at 
15 Oct 2019 09:00
UK Oil & Gas PLC
("UKOG" or the "Company")
Horse Hill Oil Field - Successful Completion of HH-2 Coring Operations
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce the successful completion of an extensive conventional coring programme in its 85.635% owned Horse Hill-2 ("HH-2") Portland pilot well. Preliminary visual analysis of a total of 241.45 ft of core has clearly identified the Portland reservoir's most productive zone or "sweet spot", which will now be the target of the planned circa 1,000 m HH-2z horizontal trajectory, expected to commence next week.
Live oil was observed "bleeding" profusely from core throughout the sweet-spot, the Upper Portland reservoir's most porous, permeable and oil productive interval. Lesser degrees of oil bleed, together with oil shows and oil staining were also observed from porous sandstone intervals lying above and below the sweet-spot.
The core is now at a Surrey-based laboratory, where an extensive geological and petrophysical analysis programme is now underway. Results of analyses that directly impact the field's possible increased oil in place and recoverable oil volumes will be reported in due course.
Having also reached its planned depth of around 2320 ft below rig floor, the well is now being prepared for electric logging, following which it will be plugged back to the "kick-off" point delineating the start of the HH-2z horizontal section.
To ensure the borehole remains wholly within the sweet spot, HH-2z will be actively "geo-steered" during drilling to keep within a series of core and electric log-derived diagnostic geological markers delineating the zone's upper and lower boundaries. The successful delivery of such an optimally placed horizontal trajectory is designed to optimise flow rates and oil recoveries from the Portland reservoir.
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.
About HH-2/2z:
HH-2/2z, the first of two new horizontal wells in the field's Portland oil pool, is designed to be retained as a future production well, capable of delivering flow rates significantly higher than the previously reported 362 barrels of oil per day from the HH-1 vertical Portland discovery well. Following a planned extensive HH-2z production flow-testing campaign, both HH-2z Portland and the HH-1 Kimmeridge well are expected to be put into long term production by the end of 2019.
Stephen Sanderson, UKOG's Chief Executive, commented:
"The HH-2 coring programme has delivered its key short-term goal of defining the Portland reservoir's sweet-spot, the most porous and permeable vertical zone within the oil pool. We can now confidently proceed ahead to drill the HH-2 horizontal trajectory wholly within the most oil productive part of the Portland, the zone capable of delivering the significant flow rates we seek."
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 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
coring | a drilling technique that involves using a doughnut-shaped drilling bit to capture or "cut" a continuous cylinder-shaped sample of 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 with a diameter of 3-4.5 inches. Core is taken in petroleum reservoir rocks for detailed laboratory analyses of geological, geochemical petrophysical and geomechanical properties |
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 |
oil in place | the quantity of oil or petroleum that is estimated to exist within the reservoir or accumulation i.e. oil in the ground |
oil-water contact (OWC) | A bounding surface in an oil pool or reservoir above which predominantly oil occurs and below which predominantly water occurs. The OWC is a key determinant for the calculation of oil in place within a conventional hydrocarbon accumulation |
well test | or flow 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. |
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 |
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-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. Portland and Kimmeridge Oil field with productive and commercially viable zones, EWT ongoing, production planning consent granted in September 2019, appraisal/development drilling campaign underway. Long term production start expected late 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
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