Drilling Update - Broadford Bridge-1

RNS Number : 6216K
UK Oil & Gas Investments PLC
10 July 2017
 

 

UK Oil & Gas Investments PLC

("UKOG" or the "Company")

 

Drilling Reveals Significant 1,490 ft Thick Kimmeridge Continuous Oil Deposit at Broadford Bridge-1 Exploration Well, PEDL234 Licence, Weald Basin, UK

 

Highlights

 

·      Drilling programme reveals a Continuous Oil Deposit, with gross possible Kimmeridge oil bearing zone of at least 1,490 ft measured depth ("MD"), equating to 1,100 ft vertical depth, has been encountered at BB-1; spans entire naturally fractured Kimmeridge Limestone (KL1-KL4) and shale section from 4,018-5,508 ft MD

 

·      200 ft thick KL1 fractured oil reservoir sequence drilled from 4,945-5,155 ft MD; mobile oil recovered from drilling mud, oil shows in drill-cuttings, good wet gas readings; significant lost circulation zones ("LCZs") within KL1 indicates connected and laterally extensive natural-fracture system

 

·      Drilling and coring successfully completed at Total Depth of 5,850 ft MD; Schlumberger electric logging and fracture imaging underway, flow testing to commence following setting of 7-inch steel casing and well completion

 

UK Oil & Gas Investments PLC (London AIM and NEX: UKOG) is pleased to announce that it has successfully completed the drilling and coring programme through the entire Kimmeridge Limestone (KL1 to KL4) target section at its 100% owned Broadford Bridge-1 ("BB-1") exploration well located in licence PEDL234.

In the Company's opinion, the evidence of mobile light oil in core, drill-cuttings, and drilling fluid, plus wet gas readings throughout the entire naturally fractured Kimmeridge KL1-KL4 limestone and shale target section, from 4,018-5,508 ft MD, is supportive that a significant 1,490 ft thick continuous oil deposit has been demonstrated at BB-1.

This continuous oil deposit therefore likely underlies the entire PEDL234 licence and a significant area of the wider Weald Basin, including the Horse Hill-1 Kimmeridge oil discovery some 27 km to the north east. The Company has the largest licence holding in the Weald Basin and within the prospective area of the Kimmeridge play.

A comprehensive electric logging and fracture-imaging programme is now underway and the Company will provide an update in due course.

A comprehensive extended flow testing programme will commence directly following the setting of 7-inch steel casing and well completion. This programme is designed to establish if oil can flow at commercial rates and in commercial quantities from BB-1.

Stephen Sanderson, UKOG's Executive Chairman commented:

"In the Company's view, these highly positive and ground-breaking drilling results support our concept that a continuous oil deposit, some 1100 feet vertical thickness, underlies the BB-1 well location and the wider Weald Basin. UKOG as the largest licence holder in the prospective area of the Kimmeridge oil deposit is ideally positioned to take full advantage of this position.

Given our 100% ownership of BB-1 and the 300 km² size of the PEDL234 licence, this licence now looks set to supplant Horse Hill as the Company's flagship asset.

The major technical learning from BB-1 to date is that the Kimmeridge oil deposit now spans both fractured limestones and shales over almost the entire Kimmeridge section and that natural fracturing is more pervasive than expected. This bodes very well for the forthcoming flow test programme, which will commence following electric logging and well completion.

The forthcoming extensive flow testing phase will now hopefully move us even further from proof of geological concept towards demonstrating that BB-1 itself is commercially viable."

About BB-1

 

BB-1 is located near Billingshurst, West Sussex, within the 300 km² PEDL234 licence, in which the Company has a 100% interest via its ownership of the licence's operator, Kimmeridge Oil & Gas Limited ("KOGL"). The well, an exploration step-out, is designed to penetrate four naturally fractured Kimmeridge Limestone units (KL1-KL4), the uppermost two units of which flowed at record rates in the HH-1 discovery near Gatwick Airport. 

 

Qualified Person's Statement

 

Stephen Sanderson, UKOG's Executive Chairman, who has over 35 years of relevant experience in the oil industry, has approved the information contained in this announcement. 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:

 

UK Oil & Gas Investments PLC

Stephen Sanderson / Kiran Morzaria                                     Tel: 01483 243450 

 

WH Ireland (Nominated Adviser and Broker)

James Joyce / James Bavister                                                   Tel: 020 7220 1666

 

Cenkos Securities PLC (Joint Broker)

Nick Tulloch / Neil McDonald                                                   Tel: 0131 220 6939

 

Square 1 Consulting (Public Relations)

Brian Alexander / David Bick                                                    Tel: 01483 243450 / 020 7929 5599

 

 Glossary:

casing

heavy gauge steel tubing designed to line the wall of a well. The casing provides a safe controlled space in which the drill pipe and bit can operate in isolation from conditions in overlying rock units. The steel tubing is bonded to the surrounding rock by impermeable concrete, known as "cement"

core or coring

a drilling technique that involves using a doughnut-shaped drilling bit to capture or "cut" a continuous cylinder-shaped core of undamaged in-situ rock. The core is captured in a steel pipe or "core barrel" above the bit. Core is normally cut in 30 feet lengths, or multiples of 30 feet, and normally with a diameter of 3.5 or 4 inches. Core is taken in petroleum reservoir rocks for detailed laboratory analyses of petrophysical and geomechanical parameters

continuous oil deposit or resource deposit

a petroleum accumulation that is pervasive throughout a large area, which is not significantly affected by hydrodynamic influences (i.e. the buoyancy of oil in water) and is not trapped by structural or stratigraphic geological conditions. The deposit, in contrast to conventional accumulations, has therefore not accumulated by the migration of petroleum over medium to long distances. The petroleum in such deposits is found within, or immediately adjacent or close to, the pore spaces where the petroleum is generated, i.e. those pore spaces lying within petroleum source rocks containing organic rich compounds (kerogen) that, when heated over geological time, transform into petroleum. These accumulations are generally associated with organic-rich shales such as the Kimmeridge Clay Formation. Such accumulations do not generally contain significant volumes of free, mobile formation water and therefore have no observable hydrocarbon-water contacts. The extent of the accumulation is generally defined by the limit of where burial depths have been sufficient to transform organic matter within the petroleum source rock unit into petroleum.

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

electric logs

Tools which measure the electrical properties of the rock and fluids in and surrounding the wellbore to determine the petrophysical and geological properties of the rock in its in-situ state. The logging equipment is lowered into the borehole on a steel cable through which a wire conveys data to be recorded at surface. The logging at BB-1 also includes tools which record 3-dimensional images and ultrasound scans of the rock designed to map and characterise natural fractures

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

lost circulation zone (LCZ)

a zone of highly porous and permeable rock or voids directly intersecting the wellbore into which drilling fluid can escape. Commonly LCZs occur in extensive open fracture networks, voids or vugs within limestones and highly porous and permeable sandstones

naturally fractured reservoir

a fractured reservoir contains open and usually connected cracks or fissures within the rock matrix; fractures can enhance permeability of rocks greatly by connecting pore-spaces together; naturally fractured reservoirs have been created over geological time by nature, not man-made via hydraulic fracturing

shale

a fissile rock that is formed by the consolidation of clay, mud, or silt particles, and that has a finely stratified or laminated structure. Certain shales, such as those of the Kimmeridge Clay, often contain a significant proportion of organic material, which when subject to increasing temperature and pressure over geological time transform into petroleum (known as petroleum "source rocks")

step-out well

a well specifically designed to determine the lateral extent of a discovered hydrocarbon accumulation or play

wet gas

natural gas, predominantly consisting of methane (C1), ethane (C2) and propane (C3) but also containing the longer molecular chain natural gases butane and iso-butane (C4), pentane and iso-pentane (C5). The C4 and C5 gases are created during oil-generation within a petroleum source rock unit when oil is thermally cracked. At Horse Hill these natural gases lie in solution within the oil in the KL3 and KL4 Kimmeridge Limestone reservoirs (i.e. solution or associated gas and not as a separate free-gas phase).

 

UKOG Licence Interests

 

The Company has interests in the following ten 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 in stable production

Baxters Copse 2

PEDL233

50%

UKOG Weald Limited

IGas Energy Plc

89.6

Appraisal/development well planned; licence extended to 2018

Broadford Bridge 3

PEDL234

100%

Kimmeridge Oil & Gas Limited 4

Kimmeridge Oil & Gas Limited 4

300.0

BB-1 drilling underway

Holmwood 3

PEDL143

30%

UKOG

Europa Oil & Gas (Holdings) plc

91.8

Holmwood-1 exploration well planned in 2017

Horndean 1

PL211

10%

UKOG (GB) Limited

IGas Energy Plc

27.3

Field in stable production

Horse Hill 5

PEDL137

31.2%

Horse Hill Developments Ltd 

Horse Hill Developments Ltd 

99.3

Submitted planning application for long term production tests and drilling of two wells

Horse Hill 5

PEDL246

31.2%

Horse Hill Developments Ltd

Horse Hill Developments Ltd 

43.6

As above

Isle of Wight (Offshore) 3

P1916

100%

UKOG Solent Limited

UKOG Solent Limited

46.7

Preparing drilling planning submission

Isle of Wight (Onshore) 2, 3

PEDL331

65%

UKOG

TBA

200.0

Preparing drilling planning submission

Markwells Wood 2

PEDL126

100%

UKOG (GB) Limited

UKOG (GB) Limited

11.2

Submitted planning application for appraisal and field development

 

Notes:

1. Oil field currently in production.

2. Oil discovery pending development and/or appraisal drilling.

3. Exploration asset with drillable prospects and leads. Contains the extension of the Godley Bridge Portland gas discovery and the site of the forthcoming Broadford Bridge-1 well.

4. UKOG has a 100% interest in Kimmeridge Oil & Gas Limited, which has a 100% interest in PEDL234.

5. Oil discovery with recently completed flow testing.

6. UKOG has a direct 48% 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.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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