Alba Mineral Resources PLC Horse Hill Update (6783S)

TIDMALBA

RNS Number : 6783S

Alba Mineral Resources PLC

27 June 2018

Alba Mineral Resources plc

("Alba" or the "Company")

Production Flow Test Operations Commence at

Horse Hill-1, Weald Basin, UK

Alba Mineral Resources plc (AIM: ALBA) is pleased to announce that it has been informed by Horse Hill Developments Ltd ("HHDL"), the operator of the Horse Hill-1 ("HH-1") Kimmeridge Limestone 3 ("KL3"), Kimmeridge Limestone 4 ("KL4") and Portland oil discovery, that planned flow testing operations of HH-1 have commenced. Alba is further informed that all key equipment necessary to carry out a 150-day long-term extended flow test campaign at HH-1 is now on site.

Alba holds an 11.765% beneficial interest in licence PEDL137 containing the HH-1 oil discovery.

Following final equipment set-up and the subsequent removal of three temporary suspension plugs in the wellbore, flow will first be re-established from the Portland sandstone oil pool. Testing of each of the KL4 and KL3 oil pools will follow completion of the Portland test sequence which is expected to take 30 to 40 days.

George Frangeskides, Alba's Executive Chairman, commented:

"We are very pleased that, following receipt of all regulatory approvals, HHDL has now confirmed that it has mobilised equipment to site and intends to commence the extended well test programme shortly. This test programme is designed to provide the necessary data to assess the commerciality of the Portland and the Kimmeridge zones at Horse Hill and, as such, clearly represents a key phase in the Project."

The Operator, HHDL, has provided the following further information regarding the forthcoming extended well tests.

Extended Well Test ("EWT") Overview

As the 2016 short flow test campaign established commercially viable initial flow rates for each of the Portland, KL4 and KL3 zones, the 2018 EWT's prime goal is to confirm that the wellbore is connected to a commercially viable oil volume within one or more of the three zones.

The long term reservoir performance data is also expected to provide the necessary data to enable, for the first time, Petroleum Resources Management System compliant Kimmeridge and Portland reserve figures to be estimated at Horse Hill.

Each test sequence will include a short, optimised rate test, together with a sequence of "choked back" (i.e. reduced) steady-state flow periods necessary to obtain the data required to determine the connected oil volume within each zone. A series of associated long pressure build up tests are also planned. Oil produced from the EWT will be sold on the "spot" oil market and any revenues will be utilised to offset overall testing costs.

In a move to further minimise environmental impact, the EWT will utilise a new type of clean-burning enclosed flare, a UK onshore industry first. The flare, utilising technology from UK landfill sites, was developed jointly between Landfill Systems, PW Well Test and UK Oil & Gas Investments plc.

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), a petroleum geologist with over 45 years' experience in the management, exploration, development and production of oil and gas.

Glossary:

 
 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 
                       ----------------------------------------------------- 
 oil field              an accumulation, pool or group of pools 
                         of oil in the subsurface. An oil field consists 
                         of a reservoir in a shape that will trap 
                         hydrocarbons and that is covered by an impermeable 
                         or sealing rock 
                       ----------------------------------------------------- 
 Petroleum Resources    A Global Standard of Reserve and Resource 
  Management System      Classification published by the Society 
                         of Petroleum Engineers (SPE) jointly with 
                         the World Petroleum Council (WPC) and the 
                         American Association of Petroleum Geologists 
                         (AAPG) 
                       ----------------------------------------------------- 
 pump stroke capacity   in a rod pump the product of the rod cross-sectional 
                         area, maximum distance between the top and 
                         bottom of the rod stroke movement and the 
                         pump stroking speed 
                       ----------------------------------------------------- 
 recoverable volumes    those quantities of petroleum (oil in this 
  or resources           case) estimated, as of a given date, to 
                         be potentially recoverable from known accumulations 
                       ----------------------------------------------------- 
 reserves               those quantities of petroleum anticipated 
                         to be commercially recoverable by application 
                         of development projects to known accumulations 
                         from a given date forward under defined 
                         conditions. Reserves must further satisfy 
                         four criteria: they must be discovered, 
                         recoverable, commercial, and remaining (as 
                         of the evaluation date) based on the development 
                         project(s) applied. Reserves are further 
                         categorised in accordance with the level 
                         of certainty associated with the estimates 
                         and may be sub-classified based on project 
                         maturity and/or characterised by development 
                         and production status 
                       ----------------------------------------------------- 
 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. 
                       ----------------------------------------------------- 
 

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                        [phone] 

Cairn Financial Advisers LLP (Nomad)

   James Caithie / Liam Murray                                            [phone] 

First Equity Limited (Broker)

   Jason Robertson                                                             [phone] 
 
 
   Yellow Jersey PR (Financial PR/ IR) 
 Tim Thompson / Henry Wilkinson 
  [e-mail]                      [phone] 
 

Alba's Principal Operations & Investments

Oil & Gas

Horse Hill (Oil & Gas, UK): Alba holds an 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.

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.

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.

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.

Gold Mines of Wales (Gold, Wales, UK): Alba holds a 49 per cent interest in Gold Mines of Wales, the ultimate owner of the Clogau Gold project situated in the Dolgellau Gold Belt in Wales.

Inglefield Land (Multi-Commodity, Greenland): Alba owns 100 per cent of mineral exploration licences 2017/40 and 2018/15 in north-west Greenland.

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.

Web: www.albamineralresources.com

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June 27, 2018 02:00 ET (06:00 GMT)