Acquisition of 40% Interest in Markwells Wood

RNS Number : 4437F

UK Oil & Gas Investments PLC

20 February 2015

 

20 February 2015

UK Oil & Gas Investments PLC

("UKOG" or the "Company")

Acquisition of 40% Interest in Markwells Wood discovery - UK, Weald Basin

The Board of UKOG (AIM: UKOG) is pleased to announce that its fully-owned subsidiary, UKOG (GB) Limited, has signed an agreement with Magellan Petroleum (UK) Limited ("Magellan") to acquire their 40% interest in onshore licence PEDL 126 ("Markwells Wood") in the Weald Basin for a nominal amount of £1, subject to normal regulatory approvals. This acquisition increases UKOG's interest in Markwells Wood to 100%.

UK onshore licence PEDL126 in the Weald Basin contains the Markwells Wood-1 Great Oolite oil discovery.  

Markwells Wood was discovered in 2011. An extended well test programme over a 6 month period from end 2011 to May 2012 was carried out, producing 3,931 barrels of oil. The peak flow rate over a 24 hour period was approximately 100 barrels of oil per day.

UKOG's current interpretation of the Markwells Wood-1 well data and 2D seismic over the discovery and the neighbouring producing Horndean oil field (in which UKOG has a 10% interest) shows that Markwells Wood likely represents the eastern extension of the Horndean field, sharing the same structural spill point and interpreted oil down to depth of 4,446 ft TVDss.

Further details on Markwells Wood are provided in UKOG's corporate presentation of November 2014, available on UKOG's website: www.ukogplc.com.

UKOG and Magellan continue to work together to unlock value from our other joint venture licences in the  Weald and Wessex Basins.

Stephen Sanderson, the Company's CEO, commented:

"The acquisition represents an excellent opportunity to further consolidate the Company's interest in the Markwells Wood oil discovery. UKOG's increased ownership will enable us to more fully exploit identified subsurface and infrastructure synergies shared with the adjacent producing Horndean oil field in which the Company holds a 10% interest. Given that we view Markwells Wood to be the eastern extension of the Horndean oil accumulation, we look forward to working with IGas Energy Plc, operator of Horndean, to help realise value from the significant oil in place demonstrated by the discovery".

Qualified Person's Statement

The information contained in this announcement has been reviewed and approved by Stephen Sanderson, UKOG's CEO, who has over 33 years of relevant experience in the oil industry.  Mr Sanderson is a Fellow of the Geological Society of London and is an active member of the American Association of Petroleum Geologists.

Glossary:

2D seismic	seismic data collected using the two-dimensional common depth point method
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
oil down to	the deepest level where oil saturation is measured at the base of a porous reservoir where it directly overlies rock of very low porosity and permeability where no reliable oil water contact can be established
structural spill point	the structurally lowest point in a hydrocarbon trap that can retain hydrocarbons
TVDss	true vertical depth below a subsea datum.

For further information please contact: 

UK Oil & Gas Investments PLC David Lenigas / Donald Strang	Tel: [phone]
WH Ireland (Nominated Adviser and Broker) James Joyce / Mark Leonard	Tel: [phone]
Square 1 Consulting (Public Relations) David Bick / Mark Longson	Tel: [phone]

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