Last checked at 21 Sep 2020 07:00
UK Oil & Gas PLC
("UKOG" or the "Company")
Loxley gas project: Xodus volumetric study confirms significant gas resource
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that a report from Xodus Group details that the area of the Loxley Portland gas discovery lying within its 100% owned and operated PEDL234 licence, is interpreted to contain a significant mean case gross gas initially in place ("GIIP" i.e. gas in the ground before any future production) of 49 billion cubic feet ("bcf"). The portion of GIIP estimated to be recoverable to surface via any future production, the mean gross recoverable resource, is cited as 34 bcf, representing an estimated recovery factor of approximately 70%.
Reported high case net PEDL234 GIIP and estimated high case recoverable resources are 76 bcf and 54 bcf, respectively.
As shown in Tables 1 and 2 below, approximately 78% of the overall Loxley gas accumulation's gross mean GIIP and recoverable gas resource of 63 bcf and 44 bcf respectively, are interpreted to lie within the Company's PEDL234 acreage.
In terms of recoverable gas resources, the calculated figures places Loxley as one of the largest gas accumulations discovered and flow tested in the UK onshore. If proven by future production, the calculated gross mean recoverable resources would place Loxley second after the Saltfleetby gas field, the UK onshore's largest gas field to date, which produced approximately 73 bcf.
These results further underline the Company's view that the 48 km² Loxley geological structure contains materially significant gas volumes, which in a success case of around 4-5 bcf/year, on an energy equivalent basis, could have the capacity to power around 200,000 homes per year.
In the event that planning consent for the Company's appraisal and long-term testing programme is granted (see planning consent status below), and Covid-19 permitting, the Company seeks to drill the Loxley-1 well in the second half of 2021.
Table 1: Xodus calculated GIIP (bcf)
Loxley GIIP (bcf) | Low Case | Mid Case | Mean Case | High Case |
UKOG Net PEDL234 Only | 27 | 46 | 49 | 76 |
Total Loxley Accumulation | 33 | 59 | 63 | 98 |
Table 2: Xodus calculated technically recoverable gas (bcf)
Loxley Recoverable Resource (bcf) | Low Case | Mid Case | Mean Case | High Case |
UKOG Net PEDL234 Only | 18 | 32 | 34 | 54 |
Total Loxley Accumulation | 23 | 41 | 44 | 70 |
Loxley planning consent update
Following Surrey County Council's ("SCC") August 3rd decision to redetermine the Company's Loxley gas appraisal planning application, the Company understands that SCC are now working towards a rerun on 22 October, the first available planning committee meeting ("PCM") date.
The rerun decision was taken by SCC following receipt of external advice regarding the Company's and over 100 other formal complaints questioning the lawfulness of SCC's 29 June PCM. During this PCM the members voted by 6 to 5 against SCC's planning officer's recommendation to consent to UKOG's Loxley development.
A permit, covering all environmental aspects of the proposed development, was issued by the Environment Agency in June 2020
Further PCM timing updates will be issued in due course.
Qualified Person's Statement
Matt Cartwright, UKOG's Commercial Director, who has 37 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.
Stephen Sanderson UKOG's Chief Executive commented:
"The report underlines the Company's stated viewpoint that Loxley is a material UK gas resource, potentially one of the largest in the UK onshore's history, capable in the success case of making a significant and timely contribution to the local and national requirement for net zero compliant energy."
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 |
Novum Securities (Joint Broker) |
|
John Belliss
| Tel: 020 7399 9400 |
Communications |
|
Brian Alexander | Tel: 01483 941493 |
Glossary
mean value | the expected or average outcome of a defined probability distribution, in this case the calculated distribution of gas initially in place |
gas discovery | a gas accumulation for which one or several exploratory wells have established through testing, sampling and/or electric logging the existence of a significant quantity of potentially moveable hydrocarbons |
gas field | an accumulation, pool or group of pools of gas in the subsurface that produces gas to surface |
GIIP or gas in place | the quantity of gas that is estimated to exist in naturally occurring accumulations within the ground before any extraction to surface via production |
recoverable volumes or resources | those quantities of petroleum (gas in this case) estimated, as of a given date, to be potentially recoverable from known accumulations. The recovery factor represents the percentage of the GIIP that can be recovered to surface via production |
UKOG Licence Interests
The Company has interests in the following UK and International licences:
Asset | Licence | UKOG Interest | Licence Holder | Operator | Area (km2) | Status |
Avington 1 | PEDL070 | 5% | UKOG (GB) Limited | IGas Energy Plc | 18.3 | Field temporarily shut in |
Loxley & Broadford Bridge 2, 3, 8 | PEDL234 | 100% | UKOG (234) Ltd 4 | UKOG (234) Ltd 4 | 300 | Loxley/Godley Bridge gas discovery, BB-1/1z oil discovery |
A24 3 | PEDL143 | 67.5% | UKOG | UKOG 7 | 91.8 | Evaluating feasibility of drilling Portland and Kimmeridge prospect from site outside AONB |
Horndean 1 | PL211 | 10% | UKOG (GB) Limited | IGas Energy Plc | 27.3 | Field in stable production |
Horse Hill ¹, ⁵ | PEDL137 | 85.635% | Horse Hill Developments Ltd ⁶ | Horse Hill Developments Ltd ⁶ | 99.3 | Field in stable production |
Horse Hill ¹, ⁵ | PEDL246 | 85.635% | Horse Hill Developments Ltd ⁶ | Horse Hill Developments Ltd ⁶ | 43.6 | Field in stable production |
Isle of Wight 2, 3 | PEDL331 | 95% | UKOG | UKOG | 200 | Planning application submitted for Arreton oil appraisal well |
Resan Turkey 2, 3, 9 | M-47-b1, b2 | 50% | UKOG Turkey Ltd | Aladdin Middle East | 305 | Appraisal of Basur-Resan oil discovery plus further expl. prospects. Finalising agreements and government approvals |
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 Loxley Portland gas accumulation, the Broadford Bridge-1/1z Kimmeridge oil discovery, plus further undrilled Kimmeridge exploration prospects.
5. Portland and Kimmeridge oil field with productive and commercially viable zones, HH-1 in stable oil production, HH-2z EWT ongoing, production planning consent granted in September 2019, long term Production consent granted March 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
9. High-impact oil appraisal project with an upside OIP range of 150-500 mmbbl gross with expected recovery factors of 10-20% of OIP
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014