TIDMUKOG
RNS Number : 5506J
UK Oil & Gas PLC
20 August 2019
UK Oil & Gas PLC
("UKOG" or the "Company")
Licence Extensions on PEDL331 Arreton and PEDL143 "A24"
Prospect
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce
that the Oil and Gas Authority ("OGA") has granted two-year
extensions to the initial terms of the Company's operated PEDL331
(UKOG 95%, Isle of Wight, Arreton oil discovery) and PEDL143 (UKOG
67.5%, northern Weald, "A24" prospect) licences. The initial terms
will now end on 20 July 2023 (PEDL331) and 30 September 2022
(PEDL143), respectively. The Company expects that these extensions
will permit its previously reported multiple well appraisal and
exploration drilling campaign to be conducted and completed fully
within both licences' initial term.
Isle of Wight PEDL331 "Arreton Oil Discovery"
The Isle of Wight PEDL331 Arreton licence is, in the Company's
view, one of UKOG's premier appraisal stage assets, which, as per
the Company's 2018 Competent Person's Report ("CPR"), contains 14.9
million barrels ("mmbbl") of UKOG net P50 case recoverable
Contingent Resources within the Arreton oil discovery, plus a
further 10 mmbbl of net recoverable Prospective Resources in the
geological look-alike Arreton South and North prospects. Drilling
of the Arreton-3/3z appraisal well and extended flow test is now
scheduled to commence in Autumn 2020, subject to the grant of
necessary regulatory consents.
As further set out in the Company's 2018 Re-Admission document,
the Arreton South and North prospects contain aggregate P50
Portland oil in place of 77.2 mmbbl, more than twice as much as the
Company's flagship Horse Hill Portland oil field (UKOG 85.635%
interest). Further significant upside in both prospects is
calculated to lie within the underlying Inferior Oolite
sequence.
UKOG's subsurface team have also recently identified a further
large undrilled anticlinal structure, the Arreton East Prospect,
another look-alike to the Arreton discovery and lying further to
the east along the same geological trend. Initial mapping shows
this feature to be many times larger than both the Arreton oil
discovery and Arreton South prospect combined. Further work and
potential recoverable resources will be reported in due course.
Following completion of Arreton-3/3z, the Company currently
plans to proceed directly to drill Arreton South, and if regulatory
permissions are in place, to proceed directly to drill Arreton East
in the winter of 2020/21. Autumn/Winter drilling is designed
deliberately to avoid the island's tourist season.
PEDL143 "A24" Prospect
The licence lies immediately to the west of the Company's Horse
Hill licences (UKOG 85.635%) and contains the significant "A24"
Portland and Kimmeridge oil prospect, a direct geological
look-alike to the Company's Horse Hill oil field, situated on-trend
some 8km to the east. Several smaller prospects of similar size to
the nearby Brockham Portland oil field have also been identified.
Multiple potential new drilling sites outside the nearby Area of
Outstanding Natural Beauty are under evaluation and drilling is now
scheduled to follow directly after the completion of the Company's
9-well 2019/2020 drilling programme, subject to the grant of
necessary regulatory approvals.
Stephen Sanderson, UKOG's Chief Executive, commented:
"These extensions, on key appraisal and exploration assets, will
permit UKOG to carry out its stated multi-well drilling campaign
within the initial term of both licences. The identification of a
further large undrilled Portland structure on trend with the
Arreton oil discovery makes the Isle of Wight asset even more
attractive than before and fully justifies our increase in
ownership of PEDL331."
Qualified Person's Statement
Matt Cartwright, UKOG's Commercial Director, who has over 35
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
Contingent those quantities of petroleum estimated, as of
Resources a given date, to be potentially recoverable from
known accumulations, but the applied project(s)
are not yet considered mature enough for commercial
development due to one or more contingencies. Contingent
Resources may include, for example, projects for
which there are currently no viable markets, or
where commercial recovery is dependent on technology
under development, or where evaluation of the accumulation
is insufficient to clearly assess commerciality.
Contingent Resources are further categorised in
accordance with the level of certainty associated
with the estimates and may be sub-classified based
on project maturity and/or characterised by their
economic status
discovery a petroleum accumulation for which one or several
exploratory wells have established through testing,
sampling and/or logging the existence of a significant
quantity of potentially moveable hydrocarbons
------------------------------------------------------------
extended well a well test, as per the permission granted by the
test Oil and Gas Authority, with an aggregate flow period
duration over each zone of greater than 96 hours;
the objective being to establish whether a discovery
is commercially viable and the optimal methods
of future production and recovery
------------------------------------------------------------
oil in place the quantity of oil or petroleum that is estimated
to exist originally in naturally occurring accumulations
before any extraction or production
------------------------------------------------------------
P50 a 50% probability that a stated volume will be
equalled or exceeded
------------------------------------------------------------
prospect a project associated with a potential accumulation
that is sufficiently well defined to represent
a viable drilling target
------------------------------------------------------------
Prospective those quantities of petroleum estimated, as of
Resources a given date, to be potentially recoverable from
undiscovered accumulations by application of future
development projects. Prospective Resources have
both an associated chance of discovery and chance
of development
------------------------------------------------------------
oil field an accumulation, pool or group of pools of oil
in the subsurface that produces oil to surface
------------------------------------------------------------
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 Licence Operator Area Status
Interest Holder (km(2)
)
Field currently
Avington UKOG (GB) IGas Energy temporarily
(1) PEDL070 5% Limited Plc 18.3 shut in
--------------------- ---------- ------------------- ------------------- -------- --------------------
BB-1/1z oil
Broadford discovery, Loxley-1
Bridge/Loxley/Godley gas appraisal
Bridge well planning
(2, 3, UKOG (234) UKOG (234) application
8) PEDL234 100% Ltd (4) Ltd (4) 300.0 submitted
--------------------- ---------- ------------------- ------------------- -------- --------------------
Finalising new
site selection
to drill Portland
and Kimmeridge
A24 (3) PEDL143 67.5% UKOG UKOG (7) 91.8 prospects
--------------------- ---------- ------------------- ------------------- -------- --------------------
Horndean UKOG (GB) IGas Energy Field in stable
(1) PL211 10% Limited Plc 27.3 production
--------------------- ---------- ------------------- ------------------- -------- --------------------
Production tests
ongoing, two
Horse Horse further appraisal
Horse Hill Hill Developments Hill Developments wells scheduled
(5) PEDL137 85.635% Ltd Ltd 99.3 for 2019
--------------------- ---------- ------------------- ------------------- -------- --------------------
Horse Horse
Horse Hill Hill Developments Hill Developments
(5) PEDL246 85.635% Ltd Ltd 43.6 As above
--------------------- ---------- ------------------- ------------------- -------- --------------------
Preparing planning
submission for
Arreton-3 oil
appraisal well
Isle of 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, further drilling campaign scheduled,
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
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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END
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