Acquisition of Further Interest in PEDL143

RNS Number : 2658W

UK Oil & Gas PLC

16 April 2019

 

UK Oil & Gas PLC

("UKOG" or the "Company")

Acquisition of Further Interest in PEDL143 Exploration Licence

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that it has entered into a binding heads of terms with both Europa Oil and Gas Limited ("Europa") and Union Jack Oil plc ("Union Jack") to acquire their respective 20% and 7.5% interests in the highly prospective PEDL143 exploration licence ("Licence"). Upon completion, the Company will hold a majority operated 67.5% interest in the Licence.

The Licence contains the significant "A24" Portland and Kimmeridge oil prospect that is a direct geological look-alike to the Company's Horse Hill oil field, situated on-trend some 8 km to the east. Several smaller prospects of similar size to the nearby Brockham Portland oil field have also been identified. Work is well advanced to find a suitable drilling location that is situated outside of the Surrey Hills Area of Outstanding Natural Beauty ("AONB").

As previously reported in UKOG's latest Annual Report, it is the Company's strategy to hold majority interests in key operated assets, particularly those that offer significant recoverable resource potential in the same Portland and Kimmeridge reservoir targets as the Company's Horse Hill oil field.

Transaction Summary

The total considerations of £300,000 and £112,500 to Europa and Union Jack, respectively, with an effective date of 15 April 2019, will be satisfied through the issue of an aggregate total of 35,683,391 new ordinary shares in UKOG ("Consideration Shares"), with 25,951,557 and 9,731,834 Consideration Shares issued to Europa and Union Jack respectively. The Consideration Shares are calculated based upon the 5-day volume weighted average price to market close on Friday 12 February 2019 of 1.156 pence.

Completion of this acquisition, which is subject to the usual Oil and Gas Authority consent, will be announced in due course. 

Stephen Sanderson, UKOG's Chief Executive, commented:

"We are delighted to acquire this further significant share of such a highly prospective exploration Licence, which contains, in UKOG's view, one of the best undrilled Portland and Kimmeridge prospects in the Weald Basin. The proximity to UKOG's Horse Hill field, together with the Company's operational and subsurface expertise in the area, adds potentially significant operational and cost synergies to the project's overall benefit. UKOG, as the new Licence operator, will now push ahead to finalise a new well location outside of the Surrey Hills AONB.

This acquisition is in full accordance with our stated strategy of holding majority operated interests in key assets."

Qualified Person's Statement

Rob Wallace, UKOG's principal technical advisor, who has over 40 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Wallace is a Chartered Scientist, Chartered Geologist and Fellow of the Geological Society of London, an active member of the American Association of Petroleum Geologists, a member of the Petroleum Exploration Society of Great Britain and a member of the South African Geophysical Society.

For further information, please contact:

UKOG

Stephen Sanderson / Kiran Morzaria                                                                      Tel: [phone]

WH Ireland (Nominated Adviser and Broker)

James Joyce / James Sinclair-Ford                                                                           Tel: [phone]

Cenkos Securities PLC (Joint Broker)

Joe Nally / Neil McDonald                                                                                         Tel: [phone]

Novum Securities (Joint Broker)                                                                                                              

John Bellis                                                                                                                     Tel: [phone]

Public Relations

Brian Alexander / David Bick                                                                                      Tel: [phone]

Glossary

oil field	an accumulation, pool or group of pools of oil in the subsurface that produces oil to surface. An oil field consists of a reservoir in a shape that will trap hydrocarbons and that is covered by an impermeable or sealing rock
prospect	a project associated with a potential accumulation that is sufficiently well defined to represent a viable drilling target

UKOG Licence Interests

The Company has interests in the following UK licences:

Asset	Licence	UKOG's Interest	Licence Holder	Operator	Area (km2)	Status
Avington 1	PEDL070	5%	UKOG (GB) Limited	IGas Energy Plc	18.3	Field currently temporarily shut in
Broadford Bridge 3	PEDL234	100%	UKOG (234) Ltd 4	UKOG (234) Ltd 4	300.0	BB-1 & 1z oil discovery, planning application approved
A24 3	PEDL143	67.5%	UKOG	UKOG	91.8	Seeking alternate sites to drill A24 and other Portland/Kimmeridge prospects
Horndean 1	PL211	10%	UKOG (GB) Limited	IGas Energy Plc	27.3	Field in stable production
Horse Hill 5	PEDL137	50.635%	Horse Hill Developments Ltd ⁶	Horse Hill Developments Ltd ⁶	99.3	Production tests ongoing, two further appraisal wells scheduled for 2019
Horse Hill 5	PEDL246	50.635%	Horse Hill Developments Ltd⁶	Horse Hill Developments Ltd ⁶	43.6	As above
Isle of Wight (Onshore) 2, 3	PEDL331	95%	UKOG	UKOG	200.0	Preparing planning submission for Arreton-3 oil appraisal well and Arreton South exploration well
Markwells Wood	PEDL126	100%	UKOG (GB) Limited	UKOG (GB) Limited	11.2	Well plugged and abandoned

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, two further wells HH-1z and HH-2 scheduled in Q2 2019, 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.

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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