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UK Oil & Gas PLC Oil Production Test Update

11/04/2019 7:00am

UK Regulatory (RNS & others)


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TIDMUKOG

RNS Number : 8218V

UK Oil & Gas PLC

11 April 2019

UK Oil & Gas PLC

("UKOG" or the "Company")

Oil Production Test Update

Landmark 15,000 barrels of Portland oil reached at Horse Hill

UK Oil & Gas PLC (London AIM: UKOG), is pleased to announce that dry oil production (i.e. zero produced water) from the Portland reservoir at the Horse Hill oil field, in which the Company has a 50.635% majority interest, has continued at a stable rate of over 220 barrels of oil per day ("bopd") delivering an aggregate total Portland volume exceeding 15,000 barrels ("bbl") to date. The Portland and Kimmeridge extended test programme has now produced a significant aggregate volume in excess of 40,000 bbl.

For prudent Portland reservoir management purposes, the average pumped rate from HH-1 continues to be maintained below the previously reported 362 bopd calculated optimised sustainable rate.

The well is currently shut in for a 60 hour pressure build up test prior to the scheduled retrieval of down hole pressure gauges. Following the pressure data retrieval and other maintenance over the coming week, Portland test production will resume.

Preparations for the planned drilling start of HH-1z and HH-2 in the second quarter of 2019 are nearing finalisation.

The HH-1 well and surrounding highly prospective licences PEDL137 and PEDL246 are operated by UKOG's subsidiary Horse Hill Developments Ltd in which the Company holds a 77.9% direct interest.

Further details of extended well test ("EWT") results to date are summarised below.

Horse Hill 2018-19 EWT Oil Production Milestones:

   --    Over 40,000 barrels ("bbl") aggregate Kimmeridge and Portland oil production to date. 
   --    Over 25,000 bbl total Kimmeridge oil production. 
   --    Over 15,000 bbl total Portland production to date, flow continues. 

-- 186 tankers of crude exported primarily to Perenco's Hamble oil terminal. The Portland's 36deg API Brent quality crude containing zero produced water, continues to be sold at prevailing Brent crude oil prices, less a small deduction for handling and marketing.

Stephen Sanderson, UKOG's Chief Executive, commented:

"The Portland's proven ability to sustain a stable dry oil production rate of over 220 bopd for two months provides a further landmark that solidly underpins the validity of the Company's planned field development. We remain fully on track to drill new horizontals in the second quarter of this year and are even more confident that the new Portland horizontal well can achieve its 720-1,080 bopd target. We believe Horse Hill remains well positioned to deliver future significant value."

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.

For further information, please contact:

UKOG

Stephen Sanderson / Kiran Morzaria Tel: 01483 900582

WH Ireland (Nominated Adviser and Broker)

James Joyce / James Sinclair-Ford Tel: 020 7220 1666

Cenkos Securities PLC (Joint Broker)

Joe Nally / Neil McDonald Tel: 0207 397 8919

Novum Securities (Joint Broker)

John Bellis Tel: 020 7399 9400

Public Relations

Brian Alexander / David Bick Tel: 01483 900582

Glossary

 
 degAPI             a measure of the density of crude oil, as defined 
                     by the American Petroleum Institute 
 oil field          an accumulation, pool or group of pools of oil 
                     in the subsurface that produces oil to surface. 
                   --------------------------------------------------------- 
 extended well      a well test, as per the permission granted by 
  test (EWT) or      the Oil and Gas Authority, with an aggregate flow 
  production test    period duration over all zones of greater than 
                     96 hours and generally up to 90 days maximum flowing 
                     time per productive horizon. The objective being 
                     to establish whether a discovery is commercially 
                     viable and the best methods of future production 
                     and recovery 
                   --------------------------------------------------------- 
 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. 
                   --------------------------------------------------------- 
 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 
                   --------------------------------------------------------- 
 

UKOG Licence Interests

The Company has interests in the following UK licences:

 
Asset               Licence     UKOG's        Licence        Operator       Area              Status 
                                Interest       Holder                       (km(2) 
                                                                              ) 
                                                                                         Field currently 
Avington                                     UKOG (GB)      IGas Energy                  temporarily shut 
 (1)                PEDL070       5%          Limited           Plc         18.3                in 
-----------------             ----------  --------------  --------------  --------  ------------------------- 
Broadford                                                                            BB-1 & 1z oil discovery, 
 Bridge                                     UKOG (234)      UKOG (234)                 planning application 
 (3)                PEDL234      100%         Ltd (4)         Ltd (4)       300.0            approved 
-----------------             ----------  --------------  --------------  --------  ------------------------- 
                                                                                        Seeking alternate 
                                                                                          sites to drill 
Holmwood                                                                                Holmwood and other 
 (3)                PEDL143       40%          UKOG            UKOG         91.8       Kimmeridge prospects 
-----------------             ----------  --------------  --------------  --------  ------------------------- 
Horndean                                     UKOG (GB)      IGas Energy                  Field in stable 
 (1)                 PL211        10%         Limited           Plc         27.3            production 
-----------------             ----------  --------------  --------------  --------  ------------------------- 
                                                                                         Production tests 
                                            Horse Hill      Horse Hill                 ongoing, two further 
Horse Hill                                  Developments    Developments                  appraisal wells 
 (5)                PEDL137     50.635%         Ltd             Ltd         99.3        scheduled for 2019 
-----------------             ----------  --------------  --------------  --------  ------------------------- 
                                            Horse Hill      Horse Hill 
Horse Hill                                  Developments    Developments 
 (5)                PEDL246     50.35%          Ltd             Ltd         43.6             As above 
-----------------             ----------  --------------  --------------  --------  ------------------------- 
                                                                                        Preparing planning 
                                                                                          submission for 
                                                                                      Arreton-3 oil appraisal 
Isle of                                                                                  well and Arreton 
 Wight (Onshore)                                                                         South exploration 
 (2, 3)             PEDL331       95%          UKOG            UKOG         200.0              well 
-----------------             ----------  --------------  --------------  --------  ------------------------- 
Markwells                                    UKOG (GB)       UKOG (GB) 
 Wood               PEDL126      100%         Limited         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, two further wells HH-1z and HH-2 scheduled in Q2 2019, development underway subject to grant of planning consent, expected in Q3 2019.

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

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 news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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