TIDMUKOG

RNS Number : 4896D

UK Oil & Gas PLC

19 February 2020

UK Oil & Gas PLC

("UKOG" or the "Company")

Horse Hill-2z Water Shut Off Intervention Commences

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that operations to shut off formation water ingress into its Horse Hill-2z ("HH-2z") horizontal production well have commenced. By means of a Halliburton coiled tubing unit, production logging tools will be run along the entire length of the 2,500 ft horizontal section to identify the source of water ingress, thought to be from a series of open natural fractures at the base or "toe" of the wellbore.

Once identified, the source of water ingress will be isolated, either via a rigid setting fluid plug, or by a conventional cementing and selective perforation programme. A resumption of HH-2z extended well test operations is planned to follow directly after a successful intervention. Portland oil pool test production from HH-1 will continue during the intervention.

UKOG holds a controlling 85.635% interest in the Horse Hill oil field and surrounding highly prospective PEDL137 and PEDL246 licences, which are operated by UKOG's subsidiary company, Horse Hill Developments Ltd.

Stephen Sanderson, UKOG's Chief Executive, commented:

"We look forward to a successful intervention programme and the near-term resumption of test oil production from the new HH-2z horizontal well."

Qualified Person's Statement

Matt Cartwright, UKOG's Commercial Director, who has over 36 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 941493

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: 020 7397 8919

Novum Securities (Joint Broker)

John Bellis Tel: 020 7399 9400

Public Relations

Brian Alexander Tel: 01483 900582

Glossary

 
 coiled tubing    a very long, narrow (typically 1 to 3.5 inch diameter) 
  (CT)             continuously welded metal tube, which is supplied 
                   spooled on a large reel. It is used for interventions 
                   to convey tools and/or fluids to specific downhole 
                   locations where deployment via wireline or other 
                   conventional means is impossible or impractical 
                   i.e. in existing deviated and horizontal wells. 
                   It can also be used for drilling purposes in existing 
                   wellbores via the installation of a drill bit and 
                   bottom hole assembly powered solely by drilling 
                   fluid circulation. Its use removes the need for 
                   a workover rig as most CT units are self-contained 
                   and trailer mounted. 
 horizontal       a well that during drilling is steered so as to 
  well             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 
                 ---------------------------------------------------------- 
 production       PLTs measure flowing fluid parameters on a zone-by-zone 
  logging tools    basis within a producing well. They provide diagnostic 
  (PLTs)           information, pinpoint where fluids such as water, 
                   oil and gas are entering a well and gives an indication 
                   about the efficiency of the perforations. PLTs 
                   normally measure four parameters: flow (via a series 
                   of spinners which rotate in the flow), density, 
                   temperature and pressure. The flow and density 
                   readings are used in traditional quantitative production 
                   logging analysis, whilst temperature and pressure 
                   data are used in more of a qualitative way to compute 
                   in-situ flow properties and locate zones of entry 
                   of fluids into a well 
                 ---------------------------------------------------------- 
 well test        or flow test involves testing a well by flowing 
                   hydrocarbons to surface, typically through a test 
                   separator over a flowing period of up to 96 hours; 
                   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 
                   and volumes. An extended well test or EWT is a 
                   well test with duration of over 96 hours and up 
                   to 90 or 180 flowing days aimed at assessing longer 
                   term production viability and the connected oil 
                   in place seen by the well. 
                 ---------------------------------------------------------- 
 

UKOG Licence Interests

The Company has interests in the following UK licences:

 
Asset                    Licence      UKOG         Licence        Operator      Area (km (2) )          Status 
                                     Interest       Holder 
                                                    UKOG            IGas                           Field currently 
Avington                                             (GB)           Energy                            temporarily 
 (1)                     PEDL070       5%          Limited           Plc             18.3               shut in 
----------------------             ----------  --------------  --------------  ---------------  --------------------- 
                                                                                                     BB-1/1z oil 
                                                                                                      discovery, 
Broadford                                                                                            Loxley-1 gas 
 Bridge/Loxley/Godley                                                                                  appraisal 
 Bridge                                             UKOG            UKOG                             well planning 
 (2, 3,                                             (234)           (234)                             application 
 8)                      PEDL234      100%         Ltd (4)         Ltd (4)          300.0              submitted 
----------------------             ----------  --------------  --------------  ---------------  --------------------- 
                                                                                                      Finalising 
                                                                                                  new site selection 
                                                                                                   to drill Portland 
                                                                    UKOG                            and Kimmeridge 
A24 (3)                  PEDL143      67.5%         UKOG             (7)             91.8              prospects 
----------------------             ----------  --------------  --------------  ---------------  --------------------- 
                                                    UKOG            IGas 
Horndean                                             (GB)           Energy                         Field in stable 
 (1)                      PL211        10%         Limited           Plc             27.3             production 
----------------------             ----------  --------------  --------------  ---------------  --------------------- 
                                                    Horse           Horse                             Production 
                                                     Hill            Hill                           tests ongoing, 
Horse Hill                                       Developments    Developments                      HH-2/2z drilling 
 (5)                     PEDL137     85.635%         Ltd             Ltd             99.3              completed 
----------------------             ----------  --------------  --------------  ---------------  --------------------- 
                                                    Horse           Horse 
                                                     Hill            Hill 
Horse Hill                                       Developments    Developments 
 (5)                     PEDL246     85.635%         Ltd             Ltd             43.6              As above 
----------------------             ----------  --------------  --------------  ---------------  --------------------- 
                                                                                                      Preparing 
                                                                                                  planning submission 
                                                                                                      for Arreton 
                                                                                                     oil appraisal 
Isle of                                                                                            well and Godshill 
 Wight (Onshore)                                                                                      exploration 
 (2, 3)                  PEDL331       95%          UKOG            UKOG            200.0                well 
----------------------             ----------  --------------  --------------  ---------------  --------------------- 
                                                    UKOG            UKOG 
Markwells                                            (GB)            (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. Portland and Kimmeridge Oil field with productive and commercially viable zones, EWT ongoing, production planning consent granted in September 2019, appraisal/development drilling campaign completed. Long term Production start expected Spring 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

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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February 19, 2020 07:30 ET (12:30 GMT)

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