Horse Hill-1 Oil Discovery, Update on Flow Test

RNS Number : 1440P

Alba Mineral Resources PLC

16 February 2016

 

16 February 2016

Alba Mineral Resources plc

("Alba" or the "Company")

Update on Flow Test

Horse Hill-1 Oil Discovery, Weald Basin, UK

Significant Oil Flows to Surface from Lower Kimmeridge Limestone

Alba Mineral Resources plc (AIM: ALBA) announces that Horse Hill Developments Limited has informed the Company that light, 40-degree API, sweet oil has flowed naturally to surface from an 80 foot zone within the Lower Kimmeridge limestone interval at a depth of approximately 900 metres below ground level.

Flow commenced at around 10:00am yesterday at an initial instantaneous rate in excess of 700 barrels per day using a 1-inch choke, in an approximate mix of 50:50 oil to water. The well was then choked back to 32/64 inches resulting in a steady early oil rate in excess of 463 barrels of oil per day over a further 7.3-hour period, in an approximate mix of over 99% oil and less than 1% water.

The Lower Kimmeridge flow period is planned to continue today at 7:00am following an overnight shut-in from 7:00pm yesterday. Upon completion, Phase 2 and Phase 3 operations will move to the shallower Upper Kimmeridge limestone and Portland sandstone zones at approximately 840 and 615 metres below ground level, respectively.

The HH-1 discovery well, the original exploration drilling phase originally completed at the end of 2014, is located within onshore exploration Licence PEDL137, on the northern side of the Weald Basin near Gatwick Airport. Alba owns a 9.75% interest in PEDL137.

Mike Nott, Alba's CEO, commented: "We consider these results to be a significant event for Alba, for the HHDL consortium and for onshore oil exploration in the United Kingdom.

The test, the first ever in the Lower Kimmeridge limestone, provides incontrovertible proof that significant quantities of moveable oil exist within the Kimmeridge section and can be brought to surface at excellent flow rates. In this case from a vertical well with minimal stimulation.  

While these flow rates are significantly in excess of our most optimistic expectations, we understand from HHDL that they can likely be significantly improved via the use of a horizontal well and appropriate conventional reservoir stimulation techniques. 

We look forward to more news from the final test results from the Lower Kimmeridge limestone and the remaining tests.  We understand that HHDL will be starting the regulatory permit process so we can return to the well to demonstrate sustainable commercial production."

Alba's interest in Horse Hill

The HH-1 well is located within onshore exploration Licence PEDL137, on the northern side of the Weald Basin near Gatwick Airport. Alba owns a 15% direct interest in HHDL, a special purpose company that owns a 65% participating interest and operatorship of licence PEDL137 and the adjacent Licence PEDL246 in the UK Weald Basin.

Qualified Person's Statement:

Stephen Sanderson, Executive Chairman of UK Oil & Gas plc, who has over 30 years of relevant experience in the oil industry, has approved the information contained in this announcement on behalf of Alba.  Mr Sanderson is a Fellow of the Geological Society of London and is an active member of the American Association of Petroleum Geologists.

For further information please contact:

Alba Mineral Resources plc Michael Nott, CEO	[phone]
Cairn Financial Advisers LLP Avi Robinson / James Caithie	[phone]
Dowgate Capital Stockbrokers Limited Jason Robertson / Neil Badger	[phone]

Glossary

choke	Device incorporating a fixed or variable orifice that is used to control fluid flow rate during testing of an exploratory discovery
degree API	A measure of the density of crude oil as defined by the American Petroleum Institute
discovery	a discovery is 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 flow test	a flow test, as per the permission granted by the Oil and Gas Authority, with an aggregate flow period duration over all zones of greater than 96 hours and up to 90 days maximum.
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
limestone	a sedimentary rock predominantly composed of calcite (a crystalline mineral form of calcium carbonate) of organic, chemical or detrital origin. Minor amounts of dolomite, chert and clay are common in limestones. Chalk is a form of fine-grained limestone
sandstone	a clastic sedimentary rock whose grains are predominantly sand-sized. The term is commonly used to imply consolidated sand or a rock made of predominantly quartz sand.
sweet oil or crude	A type of oil that contains less than 0.42% Sulphur

Additional Information

Alba holds a 15 per cent interest in Horse Hill Developments Limited, the company which has a 65 per cent participating interest and operatorship of the Horse Hill oil and gas project (licences PEDL 137 and PEDL 246) in the UK Weald Basin.

Alba has the right to earn up to 70 per cent of the Amitsoq Graphite Project in Southern Greenland.  In addition, the Company holds a base metal licence in the Republic of Ireland, and has applied for the reissue of a uranium permit in northern Mauritania.  The new Mauritanian permit will be on a reduced area, and is centred on known uranium-bearing showings.

Alba continues actively to review and discuss other project opportunities which have value-enhancing potential for the Company whether by acquisition, farm in or joint venture in a range of jurisdictions around the world.

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