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Posts: 18
Opinion: No Opinion
Posted: October 18, 2018
HH Portland Oil Field Declared Commercially Viable
RNS Number : 4111E
UK Oil & Gas PLC
18 October 2018
UK Oil & Gas PLC
("UKOG" or the "Company")
Horse Hill Portland Oil Field Declared Commercially Viable
Horse Hill-1 ("HH-1") Portland and Kimmeridge Oil Discovery, Weald Basin, UK
UK Oil & Gas PLC (London AIM: UKOG) announces that Horse Hill Developments ("HHDL"), a UKOG subsidiary company and the operator of the HH-1 Kimmeridge Limestone and conventional Portland Sandstone oil discovery, has informed the Company that, following the successful Portland Extended Well Test ("EWT") programme, it now considers the Portland oil field to be commercially viable.
HHDL now targets the start-up of long term Portland oil production during 2019, subject to the grant of necessary regulatory consents. The first future horizontal production well, HH-2, for which planning and Environment Agency consents are in place, is planned to be drilled in early 2019. HH-1 is located in licence PEDL137 in which UKOG holds a 46.735% beneficial interest. Key points and further details are summarised below:
Key Points:
· Following analysis of EWT results and economic modelling of HHDL's and Xodus Group's ("Xodus") forecast oil production profiles, HHDL now considers the Portland oil field to be commercially viable. Work is now underway towards a targeted long-term production start-up in 2019.
· HHDL currently envisages the Portland field development plan to consist of up to 3 production wells and up to 2 pressure support wells.
· A planning application for Portland and Kimmeridge field development is nearing completion and is targeted for submission to Surrey County Council ("SCC") before year-end.
· Xodus' calculated future Portland oil production profiles, based upon observed pressure and volumetric data from the EWT, show that oil recoveries of up to 45% of connected Oil in Place could be attained if a successful full voidage replacement pressure support scheme is incorporated into the field's development.
· The Portland field's first new horizontal production well, HH-2, which has SCC planning and Environment Agency consents, is planned to spud in early 2019 following completion of the Kimmeridge Limestone 4 EWT.
· As reported on 10 September, the HH-2 horizontal well has a targeted* sustainable daily Portland production rate of 720 to 1,080 bopd, 2 to 3 times the calculated* sustainable vertical well rate of 362 bopd derived from the EWT programme.
· Following submission of the planning application, Xodus' 2018 Portland Competent Persons Report will be updated to include recoverable reserves and net present values of cash flows associated with the envisaged Portland oil field development.
Note: * There can be no absolute guarantee that forecast, targeted or calculated rates of production will be achieved.
Stephen Sanderson, UKOG's Chief Executive, commented:
"HHDL's declaration of Portland commercial viability is a significant milestone for the Company. It transforms Horse Hill from solely exploration into a fully-fledged field development with a full-scale oil production start-up targeted in 2019.
The better than expected EWT results have robustly demonstrated that the Portland has significant daily production potential in its own right, which could see the first planned horizontal producer attain sustained oil rates of 720-1,080 bopd. If realised, these rates could make the Horse Hill Portland oil field one of the UK onshore's top producers.
We also eagerly anticipate the possibility of combined long-term production from both the Portland and Kimmeridge, an exciting and potentially transformational prospect for Horse Hill and the Company."
Posts: 262
Opinion: No Opinion
Posted: August 30, 2018
RNS Number : 2044Z
UK Oil & Gas PLC
30 August 2018
UK Oil & Gas PLC
("UKOG" or the "Company")
Acquisition of Further 15% Interest in Horse Hill Oil Discovery and Licences.
PEDL137 & PEDL246 Licences, Weald Basin, UK
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that it has entered into a sale and purchase agreement with Solo Oil Plc ("Solo") to acquire their 15% shareholding in Horse Hill Developments Ltd ("HHDL"), the operator and 65% interest holder in the Horse Hill-1 ("HH-1") Portland and Kimmeridge Limestone oil discovery and 55 square mile (143 km2) PEDL137 and PEDL246 licences ("the Licences"). Upon completion the Company will hold a majority 71.9% HHDL shareholding, equating to 46.735% beneficial interests in the Licences, the largest single beneficial interest-holding in both Licences.
As previously reported in July and August, a comprehensive 150-day extended well test programme, designed to confirm the HH-1 well's commerciality, is in progress. Results to date from the Portland oil pool have been very positive. Testing of the two Kimmeridge Limestone oil pools will commence following completion of the Portland test.
Transaction Summary
For a total consideration of £4,500,000, the Company will purchase Solo's 15% shareholding in HHDL, equating to a further 9.75% beneficial interest in the Licences. The total consideration of £4,500,000 with an effective date of 28 August 2018, will be satisfied through the issue of 234,042,221 new ordinary shares in UKOG ("Consideration Shares"). The Consideration Shares are calculated based on the 10-day volume weighted average price from 24 August 2018 of 1.92 pence.
In addition, and to ensure parity with the acquisition of 7% of HHDL announced on 20 August 2018 we have agreed with Gunsynd PLC ("Gunsynd") and Primorus Investments PLC ("Primorus") to issue a further 2,600,469 and 6,501,173 new ordinary shares respectively in UKOG so that both the Solo transaction and the Gunsynd and Primorus transactions will be completed at £300,000 per 1% of HHDL.
Completion of these acquisitions, which will be announced in due course, is conditional on HHDL consent. In the year ended December 2016, HHDL made a loss of £146,208.
Stephen Sanderson, UKOG's Chief Executive, commented:
"This further strategic acquisition firmly cements UKOG as the dominant player in the Horse Hill Portland and Kimmeridge oil discoveries and Licences. UKOG's three recent HHDL acquisitions provide a valuable controlling interest and exemplify the rationale behind our recent change of AIM status to an operating company. With the positive Portland test results to date, UKOG, supported by its remaining three coventurers, can now steer the way towards permanent HH oil production in 2019."
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.