Rig Arrival at Horse Hill

RNS Number : 3708N

UK Oil & Gas PLC

24 September 2019

 

UK Oil & Gas PLC

("UKOG" or the "Company")

Rig Arrival at Horse Hill: HH-2 Operations Commence

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that operations for the new Horse Hill-2/2z ("HH-2/2z") Portland horizontal well, in which the Company has an 85.635% controlling interest, have commenced. The start of physical drilling operations or "spud" is expected shortly following completion of the rig-up process and will be reported in due course.

Drilling will commence with the HH-2 vertical pilot programme and will be followed directly by the horizontal well section, HH-2z, with a planned trajectory of around 1000m wholly within the Portland reservoir. Drilling operations are expected to be completed in approximately 60 days. The HH-2z horizontal will then be tested using a bespoke downhole electric pump, or ESP.

Immediately prior to rig arrival, test production from the HH-1 Kimmeridge oil pool was temporarily shut-in to permit a safe rig-up process and will be resumed prior to the pilot hole spud. Kimmeridge test production is planned to continue throughout the drilling campaign.

Before the current shut-in, Kimmeridge test production totalled 39,205 barrels ("bbl") of dry Brent quality crude, with average daily rates of up to 307 bbl of oil per day recorded following the resumption of production on 12 September 2019. Total aggregate Portland and Kimmeridge test production now stands at over 68,773 bbl.

Following UKOG's recent acquisition of Tellurian's 35% interest in Horse Hill, the Company now holds a controlling 85.635% interest in the field and surrounding highly prospective PEDL137 and PEDL246 licences, which continue to be operated by UKOG's subsidiary company, Horse Hill Developments Ltd, in which UKOG holds a 77.9% direct controlling interest.

Stephen Sanderson, UKOG's Chief Executive, commented:

"The journey to long-term oil production at Horse Hill has now begun. We look forward to a safe and successful drilling campaign at our flagship asset."

Qualified Person's Statement

Matt Cartwright, UKOG's Commercial Director, who has over 35 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: [phone]

WH Ireland Ltd (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                                                                                            Tel: [phone]

Glossary

horizontal well	a well that during drilling is steered so as to follow and remain within a particular geological stratum or reservoir unit having a trajectory that runs  approximately parallel to the top and or base of the target horizon
oil field	an accumulation, pool or group of pools of oil in the subsurface that produces oil to surface
well test	or flow 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.

UKOG Licence Interests

The Company has interests in the following UK licences:

Asset	Licence	UKOG 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/Loxley/Godley Bridge 2, 3, 8	PEDL234	100%	UKOG (234) Ltd 4	UKOG (234) Ltd 4	300.0	BB-1/1z oil discovery, Loxley-1 gas appraisal well planning application submitted
A24 3	PEDL143	67.5%	UKOG	UKOG 7	91.8	Finalising new site selection to drill Portland and Kimmeridge prospects
Horndean 1	PL211	10%	UKOG (GB) Limited	IGas Energy Plc	27.3	Field in stable production
Horse Hill 5	PEDL137	85.635%	Horse Hill Developments Ltd ⁶	Horse Hill Developments Ltd ⁶	99.3	Production tests ongoing, drilling rig mobilised
Horse Hill 5	PEDL246	85.635%	Horse Hill Developments Ltd ⁶	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	MW-1 P&A

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, further drilling campaign scheduled, production planning consent granted in September 2019, development underway.

6.  UKOG has a direct 77.9% interest in HHDL, which has a 65% interest in PEDL137 and PEDL246.

7.  OGA consent received for the transfer of operatorship from Europa to UKOG

8.  Gas discovery pending appraisal drilling and development with underlying Kimmeridge potential

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014

 

END

 

 

MSCUOVBRKWAKUAR