TIDMUKOG
RNS Number : 3326Z
UK Oil & Gas PLC
17 May 2019
UK Oil & Gas PLC
("UKOG" or the "Company")
Horse Hill-1 Production Test Update
Portland Oil Production now exceeds 20,500 barrels
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce
that, following a successful week-long pressure build-up test
("PBU"), the aggregate total Portland oil production at the Horse
Hill oil field, in which the Company has a 50.635% majority
interest, now exceeds 20,500 barrels ("bbl"). The Portland
continues to produce at a stable rate of over 220 barrels of dry
oil per day ("bopd") at a modest reservoir pressure draw-down. No
formation water has yet been produced to surface.
The latest PBU yielded significantly better than expected
results, with little or no apparent pressure depletion compared to
the last PBU in early April. The potential positive impact on
connected oil in place will therefore be thoroughly evaluated and
reported in due course.
The successful Portland and Kimmeridge extended well test
("EWT") programme has now produced an aggregate volume in excess of
45,500 bbl to date, with a landmark target of 50,000 barrels set to
be achieved over the coming month and prior to the start of the
forthcoming horizontal well campaign. In order that the HH-2
Portland well can be drilled, the current plan envisages that once
HH-1 Portland test production exceeds 25,000 bbl, production will
be switched back to the Kimmeridge oil pool.
For prudent Portland reservoir management purposes and to ensure
there is no detriment to the expected high performance of the HH-2
Portland horizontal well, the average pumped rate from HH-1
continues to be maintained below the previously reported 362 bopd
calculated sustainable rate. As previously stated, based upon
well-established reservoir engineering metrics, it is expected that
HH-2 has the potential to achieve a rate of 2-3 or more times the
HH-1's vertical rate of 362 bopd.
Following a successful tender process, the Company is now
finalising contracts for the forthcoming drilling campaign and
preparations are now well advanced for simultaneous test production
and horizontal drilling operations at Horse Hill.
The HH-1 well and surrounding highly prospective PEDL137 and
PEDL246 licences are operated by UKOG's subsidiary Horse Hill
Developments Ltd in which the Company holds a 77.9% direct
interest.
Further details of EWT results to date are summarised below.
Horse Hill 2018-19 EWT Oil Production Milestones:
-- Over 45,500 bbl aggregate Kimmeridge and Portland oil production to date.
-- Over 25,000 bbl total Kimmeridge oil production.
-- Over 20,500 bbl total Portland production to date, flow continues.
-- 213 tankers of crude exported primarily to BP's Hamble oil
terminal. The Portland's 36deg API Brent quality crude, containing
zero produced water, continues to be sold to Perenco at prevailing
Brent crude oil prices, less a small deduction for handling and
marketing.
Stephen Sanderson, UKOG's Chief Executive, commented:
"The Portland test programme continues to exceed our technical
expectations with dry oil production now exceeding 20,500 bbl. Our
overall testing costs have also been significantly offset by the
associated sales revenues. Moving forwards, we now expect to exceed
25,000 bbl Portland test production before the HH-1 test is
switched back to the Kimmeridge to facilitate the drilling of
HH-2.
The recent extensive pressure build-up also indicates HH-1 is
likely connected to a larger oil volume than previously recognised.
Further Portland test data will now be collected and analysed
before the HH-2 drilling campaign to confirm this important
development.
The Horse Hill oil field and its associated significant future
cash flow stream is of paramount importance to UKOG and will,
therefore, continue to be the Company's prime short-term focus. In
this respect, we remain on track to commence drilling HH-2 as
previously reported."
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
degAPI a measure of the density of crude oil, as defined
by the American Petroleum Institute
draw down Pressure drawdown ( P) is defined as the difference
between the reservoir pressure and the flowing
bottom hole pressure. Drawdown enables fluids
to flow from the reservoir into the wellbore.
The magnitude of the drawdown is a major controlling
factors of a well's production rate.
---------------------------------------------------------
extended well a well test, as per the permission granted by
test (EWT) or the Oil and Gas Authority, with an aggregate flow
production test 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
---------------------------------------------------------
oil field an accumulation, pool or group of pools of oil
in the subsurface that produces oil to surface.
---------------------------------------------------------
UKOG Licence Interests
The Company has interests in the following UK licences:
Asset Licence UKOG's Licence Operator Area Status
Interest Holder (km(2)
)
Field currently
Avington UKOG (GB) IGas Energy temporarily shut
(1) PEDL070 5% Limited Plc 18.3 in
----------------- ---------- -------------- -------------- -------- --------------------------
Broadford BB-1 & 1z oil discovery,
Bridge UKOG (234) UKOG (234) planning application
(3) PEDL234 100% Ltd (4) Ltd (4) 300.0 approved
----------------- ---------- -------------- -------------- -------- --------------------------
Seeking alternate
sites to drill
A24 and other Kimmeridge
A24 (3) PEDL143 67.50% UKOG UKOG (7) 91.8 prospects
----------------- ---------- -------------- -------------- -------- --------------------------
Horndean UKOG (GB) IGas Energy Field in stable
(1) PL211 10% Limited Plc 27.3 production
----------------- ---------- -------------- -------------- -------- --------------------------
Production tests
Horse Hill Horse Hill ongoing, two further
Horse Hill Developments Developments appraisal wells
(5) PEDL137 50.635% Ltd Ltd 99.3 scheduled for 2019
----------------- ---------- -------------- -------------- -------- --------------------------
Horse Hill Horse Hill
Horse Hill Developments Developments
(5) PEDL246 50.635% Ltd Ltd 43.6 As above
----------------- ---------- -------------- -------------- -------- --------------------------
Preparing planning
submission for
Arreton-3 oil appraisal
Isle of well and Arreton
Wight (Onshore) South exploration
(2, 3) PEDL331 95% UKOG UKOG 200.0 well
----------------- ---------- -------------- -------------- -------- --------------------------
Markwells UKOG (GB) UKOG (GB)
Wood PEDL126 100% Limited 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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