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UK Oil & Gas PLC - Oil Production Test Update

Thu, 11th Apr 2019 07:00

RNS Number : 8218V
UK Oil & Gas PLC
11 April 2019
 

UK Oil & Gas PLC

("UKOG" or the "Company")

 

Oil Production Test Update

Landmark 15,000 barrels of Portland oil reached at Horse Hill

 

UK Oil & Gas PLC (London AIM: UKOG), is pleased to announce that dry oil production (i.e. zero produced water) from the Portland reservoir at the Horse Hill oil field, in which the Company has a 50.635% majority interest, has continued at a stable rate of over 220 barrels of oil per day ("bopd") delivering an aggregate total Portland volume exceeding 15,000 barrels ("bbl") to date. The Portland and Kimmeridge extended test programme has now produced a significant aggregate volume in excess of 40,000 bbl.

 

For prudent Portland reservoir management purposes, the average pumped rate from HH-1 continues to be maintained below the previously reported 362 bopd calculated optimised sustainable rate.

 

The well is currently shut in for a 60 hour pressure build up test prior to the scheduled retrieval of down hole pressure gauges. Following the pressure data retrieval and other maintenance over the coming week, Portland test production will resume.

 

Preparations for the planned drilling start of HH-1z and HH-2 in the second quarter of 2019 are nearing finalisation.

 

The HH-1 well and surrounding highly prospective licences PEDL137 and PEDL246 are operated by UKOG's subsidiary Horse Hill Developments Ltd in which the Company holds a 77.9% direct interest.

 

Further details of extended well test ("EWT") results to date are summarised below.

 

Horse Hill 2018-19 EWT Oil Production Milestones:

 

·    Over 40,000 barrels ("bbl") aggregate Kimmeridge and Portland oil production to date.

·    Over 25,000 bbl total Kimmeridge oil production.

·    Over 15,000 bbl total Portland production to date, flow continues.

·    186 tankers of crude exported primarily to Perenco's Hamble oil terminal. The Portland's 36° API Brent quality crude containing zero produced water, continues to be sold at prevailing Brent crude oil prices, less a small deduction for handling and marketing.

 

Stephen Sanderson, UKOG's Chief Executive, commented:

 

"The Portland's proven ability to sustain a stable dry oil production rate of over 220 bopd for two months provides a further landmark that solidly underpins the validity of the Company's planned field development. We remain fully on track to drill new horizontals in the second quarter of this year and are even more confident that the new Portland horizontal well can achieve its 720-1,080 bopd target. We believe Horse Hill remains well positioned to deliver future significant value."

 

Qualified Person's Statement

 

Rob Wallace, UKOG's principal technical advisor, who has over 40 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Wallace is a Chartered Scientist, Chartered Geologist and Fellow of the Geological Society of London, an active member of the American Association of Petroleum Geologists, a member of the Petroleum Exploration Society of Great Britain and a member of the South African Geophysical Society. 

For further information, please contact:

 

UKOG

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

 

°API

a measure of the density of crude oil, as defined by the American Petroleum Institute

oil field

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

extended well test (EWT) or production test

a well test, as per the permission granted by the Oil and Gas Authority, with an aggregate flow period duration over all zones of greater than 96 hours and generally up to 90 days maximum flowing time per productive horizon. The objective being to establish whether a discovery is commercially viable and the best 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

 

UKOG Licence Interests

 

The Company has interests in the following UK licences:

 

Asset

Licence

UKOG's Interest

Licence Holder

Operator

Area (km)

Status

Avington 

PEDL070

5%

UKOG (GB) Limited

IGas Energy Plc

18.3

Field currently temporarily shut in

Broadford Bridge 

PEDL234

100%

UKOG (234) Ltd

UKOG (234) Ltd 

300.0

BB-1 & 1z oil discovery, planning application approved

Holmwood 

PEDL143

40%

UKOG

UKOG

91.8

Seeking alternate sites to drill Holmwood and other Kimmeridge prospects

Horndean 

PL211

10%

UKOG (GB) Limited

IGas Energy Plc

27.3

Field in stable production

Horse Hill 

PEDL137

50.635%

Horse Hill Developments Ltd 

Horse Hill Developments Ltd 

99.3

Production tests ongoing, two further appraisal wells scheduled for 2019

Horse Hill 

PEDL246

50.35%

Horse Hill Developments Ltd

Horse Hill Developments Ltd 

43.6

As above

Isle of Wight (Onshore) 

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, two further wells HH-1z and HH-2 scheduled in Q2 2019, 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

 

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.
 
END
 
 
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