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Alba Min Res PLC (ALBA)

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Friday 05 October, 2018

Alba Min Res PLC

Horse Hill Update

RNS Number : 1473D
Alba Mineral Resources PLC
05 October 2018
 

Alba Mineral Resources plc

("Alba" or the "Company")

 

Extended Well Test ("EWT") and Regulatory Update

Horse Hill-1 ("HH-1") Portland and Kimmeridge Oil Discovery, Weald Basin, UK

 

Highlights:

 

·     Kimmeridge Limestone 4 ("KL4") EWT operations now underway. Further updates to follow in due course following flow stabilisation and pressure build up tests.

·     Oil & gas consultancy group Xodus reports that the single HH-1 well "sees" a connected Portland oil in place ("OIP") of approximately 7-11 million barrels.

·     Horse Hill Portland and Kimmeridge long-term production scoping report submitted to Surrey County Council ("SCC"). Overall plan includes a total of six production wells, with two production wells and a reservoir pressure support well in the Portland oil pool.

 

·     A planning application for production to be submitted to SCC prior to the completion of the 2018 EWT programme.

 

Alba (AIM: ALBA), the diversified mineral exploration and development company, is pleased to announce that it has been informed by Horse Hill Developments Ltd ("HHDL" or the "Operator"), the operator of the Horse Hill-1 ("HH-1") Kimmeridge and Portland oil discovery located in licence PEDL137, that following the successful Portland EWT programme, the KL4 EWT flow sequence operation has now commenced.  Alba holds an 11.765% beneficial interest in licence PEDL137 and adjoining licence PEDL246.

 

Alba is further advised by the Operator as follows:

 

-   Further to the reported Portland EWT results, Xodus has now delivered a report which details that, to date, the single HH-1 well has "seen" approximately 7-11 million connected barrels out of the total estimated full field OIP (or Stock Tank Oil Initially in Place "STOIIP"), as set out in UK Oil & Gas Plc's admission document dated 13 July 2018.  Based upon modelled production profiles and oil recoveries, the Operator believes this to be a commercial connected OIP volume for a single well and that it supports the Operator's envisaged multi-well Portland oil drilling and production programme. It should be noted that the calculated connected OIP should not be misconstrued as recoverable volumes or reserves.

 

-   Given the EWT has delivered both commercially viable Portland flow rates and connected oil volumes, an internal declaration of Portland commerciality will be made shortly by HHDL.  The preliminary internal assessment generated by Alba's technical team from the available data supports this view.

 

-   As the first part of the regulatory process necessary to deliver the goal of long-term oil production at Horse Hill in 2019, HHDL has recently submitted an outline production scoping report to SCC.

 

-   The scoping report details the envisaged environmental impact of the outline development's future drilling, production, decommissioning and site restoration phases. The envisaged development has a total of six production wells and assumes a maximum daily rate of around 3,500 bopd. During the production phase it is envisaged that should production capacity exceed 3,500 bopd an application to increase total produced volumes will be made. The Portland oil pool is envisaged to be produced via up to two wells and one pressure support well.  As previously reported, planning permissions are in place to drill and flow test the first two new wellbores, HH-1z and HH-2, with a planned early 2019 spud date.

 

-   Average HGV movements during the plan's 20-year field production life are estimated to total three per day.

 

-   Following SCC's feedback on the scoping report, HHDL will submit a full-scale production planning application, currently planned to be submitted before the completion of the 2018 EWT programme.

 

George Frangeskides, Alba's Executive Chairman, commented:

 

"These ambitious plans revealed by the Operator to drill up to a further four wells at the Horse Hill site, on top of the already planned HH-1z side-track well and HH-2 new well, supports our belief in the potential for Horse Hill to provide material production and cash flow returns to Alba in the medium to long-term.  In the short-term, meanwhile, we await the results of the current Kimmeridge EWT, which we hope will further underpin the plans to submit a planning application for the commencement of full-scale production." 

 

"On the corporate front, the recently announced disposals by a number of the participants of their stakes in Horse Hill means that Alba is now the sole AIM-quoted participant in the Horse Hill venture aside from UKOG, and the third largest participant in the Project overall, after UKOG and Tellurian Inc (NASDAQ: TELL).  Alba remains a committed participant in Horse Hill and we look forward to reporting further news in this fast-developing project as it arises."

 

 

Qualified Person's Statement

 

The technical information contained in this announcement has been reviewed and approved by Feroz Sultan (B.Sc (Hons) Geology, M.Sc, Petroleum and Structural Geology, Karachi and M.Sc Petroleum Geology, Imperial College London), a petroleum geologist with over 45 years' experience in the management, exploration, development and production of oil and gas.

 

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

 

For further information please contact:

 

Alba Mineral Resources plc

George Frangeskides, Executive Chairman                           +44 20 7264 4366

 

Cairn Financial Advisers LLP (Nomad)     

James Caithie / Liam Murray                                               +44 20 7213 0880

 

First Equity Limited (Broker)

Jason Robertson                                                               +44 20 7374 2212

 

 Yellow Jersey PR (Financial PR / IR)

 

 Tim Thompson / Harriet Jackson

 [email protected]

+44 77 1071 8649

 

 

Glossary

 

connected oil in place

A volume of OIP that is demonstrated by reservoir pressure and flow data to be directly accessed and drained by a well during production. Only part (or a fraction) of the volume, known as the recoverable volume, will normally be recovered to surface during oil production. The percentage of the recoverable volume compared to the total connected OIP is known as the recovery factor for that well.

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 well test

a well 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

oil in place, or OIP

the quantity of oil or petroleum that is estimated to exist in naturally occurring accumulations.

 

Alba's Project Portfolio

 

Mining

 

Amitsoq (Graphite, Greenland): Alba owns a 90 per cent interest in the Amitsoq Graphite Project in Southern Greenland and has an option over the remaining 10 per cent.

 

Clogau (Gold, Wales): Alba owns a 90 per cent interest in Gold Mines of Wales Limited ("GMOW"), the ultimate owner of the Clogau Gold project situated in the Dolgellau Gold Belt in Wales.

 

Inglefield Land (Copper, Cobalt, Gold): Alba owns 100 per cent of mineral exploration licence 2017/40 in north-west Greenland.

 

Limerick (Base Metals, Ireland): Alba owns 100 per cent of the Limerick base metal project in the Republic of Ireland.

 

Melville Bay (Iron Ore, Greenland): Alba is entitled to a 51 per cent interest in mineral exploration licence 2017/41 in Melville Bay, north-west Greenland. The licence area benefits from an existing inferred JORC resource of 67 Mt @ 31.4% Fe.

 

Thule Black Sands (Ilmenite, Greenland): Alba owns 100 per cent of mineral exploration licences 2017/29 and 2017/39 in the Thule region, north-west Greenland.

 

Oil & Gas

 

Brockham (Oil & Gas, UK): Alba has a direct 5 per cent interest in Production Licence 235, which comprises the previously producing onshore Brockham Oil Field.

 

Horse Hill (Oil & Gas, UK): Alba holds a 18.1 per cent interest in Horse Hill Developments Limited, the company which has a 65 per cent participating interest and operatorship of the Horse Hill oil and gas project (licences PEDL 137 and PEDL 246) in the UK Weald Basin.

 

Web: www.albamineralresources.com


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