TIDMPRIM
RNS Number : 2920A
Primorus Investments PLC
10 September 2018
Primorus Investments PLC
("Primorus" or the "Company")
Portland extended well test ("EWT") successfully completed,
Kimmeridge EWT to commence
Horse Hill-1 ("HH-1") Portland and Kimmeridge oil discovery,
Weald Basin, UK
Key Points:
-- Final HH-1 Portland flow test sequence successfully
completed, all Portland operational objectives achieved.
-- Successful Portland re-perforation programme targeted 114
feet of oil pay, adding 14 feet of new pay. Following
re-perforation, well productivity increased by up to 65%.
-- Independent oil consultants Xodus Group's ("Xodus") analysis
of flow and pressure data interprets that further HH-1 Portland
vertical well optimisation could achieve a forecast sustainable
initial 24/7 pumped rate of around 362 barrels of oil per day
("bopd")* when full scale long-term production commences, exceeding
original estimates. This analysis is key as it establishes the
absolute flow potential of the Portland reservoir for future
production wells.
-- Given the knowledge of the Portland's true flow potential,
plans are now being formulated to drill either the HH-1z sidetrack
or HH-2 new drill as a horizontal Portland appraisal well, with a
targeted* sustainable daily production rate of 720 to 1,080 bopd, 2
to 3 times the forecast calculated* HH-1 vertical well rate of 362
bopd. All planning permissions, Environment Agency permits and the
HH-2 well cellar are in place for a horizontal well. If successful
it is envisaged that all future Portland production will be via
horizontal wells.
-- The Company's economic modelling indicates that HH-1 Portland
is robustly commercial at even the lowest observed sustainable
daily rate of 140 bopd and at oil prices below $60 per barrel. A
formal Horse Hill Developments Ltd ("HHDL") declaration of Portland
commerciality is therefore expected shortly following receipt of
Xodus' final connected oil volume analysis. A planning application
for long term production is planned to be submitted to Surrey
County Council shortly, prior to the completion of the forthcoming
Kimmeridge EWT programme expected at the end of the year.
Full-scale long-term production, targeted for 2019, is subject to
co-venturer and regulatory approvals.
-- All 36deg API Brent quality oil produced during the EWT is
"dry", containing only 0.02% water.
-- Preparation for the primary EWT objective, to establish the
commerciality of the Kimmeridge Limestone 3 ("KL3") and KL4 oil
pools underlying the Portland, has now commenced.
-- Kimmeridge testing will begin in the uppermost KL4 oil pool
immediately following the removal of two suspension plugs and
installation of a new completion string straddling the two
Kimmeridge oil pools.
Note: * There can be no absolute guarantee that forecast,
targeted or calculated rates of production will be achieved.
Further to the announcements of 20 and 30 August 2018, while
Primorus has conditionally disposed of its 5% interest in HHDL, the
disposal has not yet completed. Once the disposal is completed,
Primorus will no longer hold a direct interest in HHDL but will
retain exposure to the project via share ownership in UK Oil and
Gas Plc.
The Company announces that HHDL, the operator of the HH-1
Kimmeridge and Portland oil discovery, located in licence PEDL137,
has informed the Company that the final Portland EWT sequence has
been successfully completed and that all Portland operational test
objectives were achieved.
Following a final long duration pressure build up test,
preparations for the primary Kimmeridge EWT are now underway. The
Kimmeridge EWT's goal is to establish the commerciality of the
underlying KL3 and KL4 oil pools, which in 2016 flowed 40deg API
crude naturally to surface at an aggregate implied stable dry oil
rate of 1,365 bopd. Further updates will be provided as the
Kimmeridge EWT progresses.
Additional EWT Information
In order to calculate the Portland oil volume connected to, or
"seen by" HH-1, steady state flow conditions were required (i.e.
stable; oil rate, gas oil ratio, bottom hole and tubing head
pressures). Consequently, post perforation, production was
restricted to sustainable 24/7 rates of between 140-160 bopd. It
should be noted that these rates do not reflect the Portland's full
flow potential that could be achieved either via successful further
optimisation of the HH-1 vertical well or a new horizontal
production well.
During these sustained flow periods, intermittent natural flow
was evident, with metered rates at the separator exceeding the
nominal pumped volume by up to 50 bopd, with the highest rate
recorded of 191 bopd. Gas rates at the test separator and through
the enclosed flare remained broadly constant at around 15,000 cubic
feet per day.
Throughout testing, sustained pumped oil rates were recorded
with stable bottom hole pressures of around 200 psi below the
initial reservoir pressure of around 915 psi. Following shut-in
periods, bottom hole pressures recovered rapidly back to initial
reservoir pressure, indicating good connectivity within the
Portland oil pool. The observed pressure response during the EWT is
interpreted to have positive implications for oil recovery
efficiency during planned future long-term production.
About Xodus
Xodus are an international, globally recognised consultancy
group providing engineering and advisory services to clients in the
oil & gas, LNG, renewables and utilities industries worldwide.
They are certified as Competent Persons for the purposes of oil and
gas resource and reserve assessments. More details can be found at
www.xodusgroup.com
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.
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014.The information contained within this
announcement is deemed by the Company to constitute inside
information under the Market Abuse Regulation (EU) No.
596/2014.
The directors of Primorus accept responsibility for this
announcement.
For further information, please contact:
Primorus Investments plc
Alastair Clayton +44 20 7440 0640
Cairn Financial Advisers LLP
James Caithie / Sandy Jamieson +44 20 7213 0880
Turner Pope Investments Limited
Andy Thacker +44 20 3621 4120
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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