TIDMUKOG
RNS Number : 8473L
UK Oil & Gas PLC
15 January 2021
UK Oil & Gas PLC
("UKOG" or the "Company")
Horse Hill oil field update
UK Oil & Gas PLC (London AIM: UKOG) is pleased to provide
the following operational update for its 85.635% owned Horse Hill
oil field.
Production
To date, the field has produced and exported over 132,000
barrels ("bbl") of Brent quality crude from its Kimmeridge and
Portland oil pools.
Despite the planned October and November downtime for the Horse
Hill-1 ("HH-1") intervention, the total Portland oil production for
the first quarter of UKOG's 2020/21 financial year to December 2020
was 7,045 bbl. The average production uptime was 57% over the
period and ranged from 37% during October's main HH-1 intervention
period, to 85% in November, post-intervention.
As announced on 5 November 2020, we safely completed an
intervention to reperforate the full Portland oil producing
section, insert a new simplified production tubing string and set
the downhole pump at a deeper level to increase Portland pumping
efficiency.
The intervention was immediately followed by an ongoing series
of multi-week production optimisation trials to achieve an optimum
balance between oil revenues and water handling and other
operational costs. Trials include well-cycling (i.e., shutting in
the well for a set period each day to reduce water inflow) and pump
fill optimisation. The trials are expected to continue for several
months. Early results are encouraging, with stable water influx
levels achieved by the end of 2020.
Water reinjection plans
Formation water production and an associated drop in overall oil
production is entirely normal in conventional oil fields, and its
management, necessary to optimise net revenue, is routine oil field
practice. For this reason, Horse Hill's planning consent included a
provision for a formation water reinjection well.
Consequently, to remove the need for expensive off-site water
disposal via tanker and to also help maximise oil recovery by
supporting reservoir pressure, HH-2z will now be reconfigured,
subject to regulatory consent, into a water re-injection well as
soon as practicable. Additional, optimally sited, production infill
wells are planned to replace HH-2z as per the original field
development plan (see below).
The necessary regulatory consent process for water injection is
underway, with permissions currently expected in the second
calendar quarter, subject to any pandemic related delays. Until
such permissions are in place, it is planned to manage pumping and
resultant oil production to maintain water cut at, or, hopefully,
below the current level.
Further significant operating cost reductions
In line with the challenging oil price environment, significant
further efforts have also been made in managing and reducing
operational costs. From January 2020 to January 2021 our total
operating costs have reduced by 66%. The savings will help place
Horse Hill in a good position to take advantage of the
strengthening Brent crude prices seen in the past month.
Forward infill drilling plans
The recent integration of the November pressure build-up ("PBU")
data, HH-2z rock data, and a completely revised seismic
interpretation has also provided a far better understanding of the
Portland reservoir. Several significant infill drilling
opportunities have now been identified in the Portland oil pool,
all up-dip of HH-1 (i.e., at a shallower depth within the oil pool)
and significantly above the oil-water contact.
Following the successful flow testing of the Kimmeridge oil
pool, during which 52,780 bbl of 40deg API oil were produced,
further development of the Kimmeridge oil pool also remains a
significant objective for the Company. Consequently, plans have now
been made for an infill well to determine the lateral extent of the
Kimmeridge oil pool, proven by HH-1 to lie within a natural
fracture system of significant vertical extent.
The Kimmeridge HH-4 well, also situated updip of both HH-1 and
HH-2z, is likely to be a highly inclined or "slant" well, designed
with a lateral orientation approximately orthogonal to the known
regional open natural fracture direction, so as to maximise the
number of open fractures penetrated.
It is expected that the further HH-3 Portland and HH-4
Kimmeridge infill wells will be planned in detail and drilled at
Horse Hill following the completion of the Company's potentially
transformational initial Turkey Basur-Resan appraisal drilling
campaign.
Further technical analysis
The interpretation of static and flowing data from November's
PBU test sequence was also completed, confirming the HH-1 connected
oil in place volumes of 7-11 mmbbl previously reported in October
2018. The PBU data also helped identify a potentially significant
contribution to Portland fluid flow from a natural fracture system.
Technical work is ongoing to further characterise the Portland
reservoir's delivery mechanisms and, in particular, the prevalence
and role of the natural fracturing within the Portland section.
Ownership
The Horse Hill Portland and Kimmeridge oil field is operated by
UKOG's subsidiary company Horse Hill Developments Ltd ("HHDL"), in
which UKOG has a direct 77.9% interest. HHDL has a 65% interest in
the field and surrounding PEDL137 and PEDL246 licences, with the
remaining 35% interest held by UKOG's wholly owned subsidiary, UKOG
(137/246) Ltd.
Stephen Sanderson, Chief Executive of UKOG, commented:
"We look forward to the conversion of HH-2z into a water
injector in the Spring and to the resultant increase in net revenue
from the reduction in water handling costs. The significant 66%
reduction in general field operating costs over the past year also
allows the field to take full advantage of the current
strengthening oil price.
Once the injector is in place, to boost production and net
revenues, we plan two more production infill wells, one in each of
the Portland and Kimmeridge oil pools. These will be scheduled
after the potentially transformational initial appraisal drilling
campaign at the Company's Turkey Basur-Resan oil discovery is
completed, later in the year."
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.
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
Communications
Brian Alexander Tel: 01483 941493
Glossary
API a measure of the density of crude oil, as defined
by the American Petroleum Institute
naturally fractured fractured reservoirs contain cracks or surface
reservoirs of breakage within rock; fractures can significantly
enhance the permeability of rocks by connecting
pores together; naturally fractured reservoirs
have been created over geological time by nature,
not man-made via hydraulic fracturing
------------------------------------------------------
oil field an accumulation, pool or group of pools of
oil in the subsurface that produces, or can
produce, oil to surface
------------------------------------------------------
oil in place The quantity of oil or petroleum that is estimated
to exist originally in naturally occurring
accumulations in the ground before any extraction
or production
------------------------------------------------------
water cut water produced from a formation as a percentage
of the total liquids produced
------------------------------------------------------
UKOG Licence Interests
The Company has interests in the following UK and international
licences:
Asset Licence UKOG Licence Holder Operator Area Status
Interest (km
(2)
)
Avington UKOG (GB) IGas Energy Field temporarily
(1) PEDL070 5% Limited Plc 18.3 shut in
------------- ---------- --------------- --------------- ----- ---------------------
Loxley Loxley/Godley
& Broadford Bridge gas
Bridge discovery,
(2, 3, UKOG (234) UKOG (234) BB-1/1z oil
7) PEDL234 100% Ltd (4) Ltd (4) 300 discovery
------------- ---------- --------------- --------------- ----- ---------------------
Horndean UKOG (GB) IGas Energy Field in stable
(1) PL211 10% Limited Plc 27.3 production
------------- ---------- --------------- --------------- ----- ---------------------
Horse Hill Horse Hill
Horse Developments Developments Field in stable
Hill (1)(,) PEDL137 85.635% Ltd Ltd 99.3 production
------------- ---------- --------------- --------------- ----- ---------------------
Horse Hill Horse Hill
Horse Developments Developments Field in stable
Hill (1)(,) PEDL246 85.635% Ltd Ltd 43.6 production
------------- ---------- --------------- --------------- ----- ---------------------
Planning application
submitted
Isle for Arreton
of Wight oil appraisal
(2, 3) PEDL331 95% UKOG UKOG 200 well
------------- ---------- --------------- --------------- ----- ---------------------
Appraisal
of Basur-Resan
oil discovery
Resan plus further
Turkey expl. prospects.
(2, 3, M-47-b1, UKOG Turkey Aladdin Middle Drilling planned
8) b2 50% Ltd East 305 in 2021
------------- ---------- --------------- --------------- ----- ---------------------
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,
production planning consent granted in September 2019, long-term
production consent granted in March 2020.
6. UKOG has a direct 77.9% interest in HHDL, which has a 65% interest in PEDL137 and PEDL246.
7. Gas discovery pending appraisal drilling and development with underlying Kimmeridge potential
8. 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
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
UPDFIFSALTIELIL
(END) Dow Jones Newswires
January 15, 2021 05:00 ET (10:00 GMT)
Uk Oil & Gas (LSE:UKOG)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Uk Oil & Gas (LSE:UKOG)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024