UK Oil & Gas Investments PLC Drilling Update (5306I)

TIDMUKOG

RNS Number : 5306I

UK Oil & Gas Investments PLC

20 June 2017

UK Oil & Gas Investments PLC

("UKOG" or the "Company")

Drilling Update at 100% Owned Broadford Bridge-1 Kimmeridge Exploration Well

PEDL234 Licence, Weald Basin, UK

UK Oil & Gas Investments PLC (London AIM and NEX: UKOG) announces that it has now commenced conventional coring operations at its 100% interest Broadford Bridge-1 ("BB-1") exploration well. The first coring point was called at a measured depth of 4013 feet (1223 metres) situated just above Kimmeridge Limestone 4 ("KL4"), the first reservoir target. Downhole natural gas levels increased steadily throughout the Kimmeridge section, with the onset of wet gas shows (butane and pentane) just above the coring point. When recovered to surface, the 100 ft cores will be transported to Aberdeen for initial rock sampling. Extensive geological, petrophysical and geo-mechanical analyses will be carried out in the UK and USA. BB-1 remains under budget and on schedule.

About BB-1

BB-1 is located near Billingshurst, West Sussex, within the 300 km(2) PEDL234 licence, in which the Company has a 100% interest via its ownership of the licence's operator, Kimmeridge Oil & Gas Limited. 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 Company's Horse Hill-1 discovery near Gatwick Airport.

The forward plan is to core the KL4 and KL3 target zones and then continue to drill 8 1/2 diameter hole at a constant inclination of 54 degrees to vertical. Further core may be taken in KL2. The well azimuth, approximately north-northeast of the well site, is designed to be at approximately 90 degrees to the predicted orientation of open natural fractures in the KL1-KL4 reservoir section. The planned overall horizontal deviation of the well is approximately 1 km. The Kimmeridge Limestones are expected to be encountered at a drilled depth of approximately 1250-1700 metres, which equates to around 950-1200 metres vertically below surface.

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: [phone] 

WH Ireland (Nominated Adviser and Broker)

   James Joyce / James Bavister                                                   Tel: [phone] 

Cenkos Securities PLC (Joint Broker)

   Nick Tulloch / Neil McDonald                                                   Tel: [phone] 

Square 1 Consulting (Public Relations)

Brian Alexander / David Bick Tel: [phone]

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. 
---------------  ------------------------------------------ 
 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 
---------------  ------------------------------------------ 
 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 
---------------  ------------------------------------------ 
 naturally        a fractured reservoir contains 
  fractured        open and usually connected cracks 
  reservoir        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 
---------------  ------------------------------------------ 
 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 & iso butane (C4), 
                   pentane & 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 with 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       Licence Holder      Operator      Area (km(2) )          Status 
                                 Interest 
----------------  ---------  ---------------  ---------------  ---------------  --------------  ---------------------- 
                                                 UKOG (GB)       IGas Energy                        Field in stable 
Avington (1)       PEDL070          5%            Limited            Plc             18.3             production 
----------------  ---------  ---------------  ---------------  ---------------  --------------  ---------------------- 
Baxters Copse      PEDL233         50%           UKOG Weald      IGas Energy         89.6        Appraisal/development 
(2)                                               Limited            Plc                         well planned; licence 
                                                                                                   extended to 2018 
----------------  ---------  ---------------  ---------------  ---------------  --------------  ---------------------- 
                                               Kimmeridge Oil   Kimmeridge Oil 
Broadford Bridge                               & Gas Limited    & Gas Limited                        BB-1 drilling 
 (3)               PEDL234         100%             (4)              (4)             300.0             underway 
----------------  ---------  ---------------  ---------------  ---------------  --------------  ---------------------- 
Holmwood (3)       PEDL143         30%              UKOG         Europa Oil &        91.8             Holmwood-1 
                                                                Gas (Holdings)                     exploration well 
                                                                     plc                            planned in 2017 
----------------  ---------  ---------------  ---------------  ---------------  --------------  ---------------------- 
                                                 UKOG (GB)       IGas Energy                        Field in stable 
Horndean (1)        PL211          10%            Limited            Plc             27.3             production 
----------------  ---------  ---------------  ---------------  ---------------  --------------  ---------------------- 
Horse Hill (5)     PEDL137        31.2%          Horse Hill       Horse Hill         99.3         Submitted planning 
                                                Developments     Developments                    application for long 
                                                    Ltd              Ltd                         term production tests 
                                                                                                  and drilling of two 
                                                                                                         wells 
----------------  ---------  ---------------  ---------------  ---------------  --------------  ---------------------- 

                                                 Horse Hill       Horse Hill 
                                                Developments     Developments 
Horse Hill (5)     PEDL246        31.2%             Ltd              Ltd             43.6              As above 
----------------  ---------  ---------------  ---------------  ---------------  --------------  ---------------------- 
Isle of Wight                                   UKOG Solent      UKOG Solent                      Preparing drilling 
 (Offshore) (3)     P1916          100%           Limited          Limited           46.7         planning submission 
---------------- 
Isle of Wight 
 (Onshore) (2,                                                                                    Preparing drilling 
 3)                PEDL331         65%              UKOG             TBA             200.0        planning submission 
----------------  ---------  ---------------  ---------------  ---------------  --------------  ---------------------- 
Markwells Wood     PEDL126         100%          UKOG (GB)        UKOG (GB)          11.2         Submitted planning 
 (2)                                              Limited          Limited                          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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June 20, 2017 02:00 ET (06:00 GMT)