Further Update on Horse Hill-1 Flow Test

RNS Number : 5510Q

Stellar Resources PLC

01 March 2016

 



Stellar Resources plc

("Stellar Resources" or the "Company")

Further Update on Horse Hill-1 Flow Test

Horse Hill-1 Oil Discovery Flows at a rate of 900 barrels per day from second zone

Stellar Resources (AIM: STG, ISDX: STG) announces that Horse Hill Developments Limited ("HHDL") has informed the Company that 100% dry, 40-degree API, light, sweet oil has flowed freely to surface, without pumping, at an average stabilised rate in excess of 900 barrels per day from an 88-foot aggregate perforated zone within the Upper Kimmeridge limestone interval at a depth of approximately 840 metres below ground level.

Restricted flow of 100% dry oil, through a 1-inch choke, using a rod pump, commenced at around 1350 hrs GMT yesterday at an initial instantaneous rate in excess of 700 barrels per day ("bopd"). At circa 1430 hrs the well started flowing freely to surface, without pumping. The free flow rate increased to over 900 bopd at 1500 hrs. The flow of dry oil then stabilised from 1500 hrs to approximately 1800 hrs, at rates averaging in excess of 900 bopd.

Note that as a consequence of flow initialisation via rod pump, the initial natural flow rates stated above were further restricted by the rods within the 2 and 7/8-inch production tubing.

The well was shut in at approximately 1830 hrs yesterday. The well was opened and free 'natural' oil flow recommenced at 2234 hrs yesterday. The well was flowed to obtain a further stabilised flow period and reservoir engineering data. A further update will be provided once this new data is available.

With this stable Upper Kimmeridge limestone flow, the two Upper Kimmeridge and Lower Kimmeridge limestone intervals have now produced a combined average stable rate of over 1,360 bopd.

As previously announced, on completion of this Upper Kimmeridge test, operations will move to the shallower Portland sandstone zone at approximately 615 metres below ground level.

The HH-1 well, drilled at the end of 2014, is located within onshore exploration Licence PEDL137, on the northern side of the Weald Basin near Gatwick Airport, in which Stellar Resources owns a 6.5% interest.

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. Stellar Resources owns a 10% direct interest in HHDL. HHDL is 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.

The Board commented:

"This is exciting news and another good result. We look forward to further updates on the testing programs as they are made available."

Qualified Person's Statement:

Stephen Sanderson, 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:

Stellar Resources plc:                                                            [phone]

Alastair Clayton

Nominated Adviser:

Cairn Financial Advisers LLP                                                    [phone]

James Caithie / Sandy Jamieson

Broker:

Optiva Securities Limited                                                           [phone]

Christian Dennis / Jeremy King

Public Relations:

Square1 Consulting                                                                    [phone]

David Bick

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

 

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