Alba Mineral Resources PLC Horse Hill Update (4086E)

TIDMALBA

RNS Number : 4086E

Alba Mineral Resources PLC

18 October 2018

Alba Mineral Resources plc

("Alba" or the "Company")

Horse Hill Portland Oil Field Declared Commercially Viable

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

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 Extended Well Test ("EWT") programme, it now considers the Portland oil field to be commercially viable.

Alba holds an 11.765% beneficial interest in licence PEDL137 and adjoining licence PEDL246.

Alba is advised by the Operator that it is now targeting 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.

Alba is further advised by the Operator as follows:

-- 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 two to three times the forecast potential HH-1 vertical well rate of 362 barrels of oil ("bopd")*.

-- 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 guarantee that forecast, targeted or calculated rates of production or oil recoveries will be achieved. The ultimate recoveries will depend upon actual reservoir performance over time and the actual efficiency of voidage replacement.

George Frangeskides, Alba's Executive Chairman, commented:

"The Operator's confidence in the viability of the Portland sandstone at Horse Hill is demonstrated by its stated objective to submit a planning application for Portland and Kimmeridge field development by the end of the year. We look forward to providing our continued support as HHDL seeks to rapidly progress the Horse Hill Project out of the exploration phase and into the development and production phases in the coming year."

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                           [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 / Harriet Jackson 
   [e-mail]            [phone] 
 

Glossary

 
 depletion-drive           a natural mechanism whereby the differential pressure 
                            between the wellbore and reservoir permits dissolved 
                            solution gas to expand and become an energy support 
                            to create oil flow into a well. It is also known 
                            as solution gas drive or dissolved gas drive. 
 connected oil             a volume of OIP that is demonstrated by collected 
  in place                  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. 
                          --------------------------------------------------------- 
 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             a well test, as per the permission granted by 
  test                      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 
                          --------------------------------------------------------- 
 horizontal well           a well that during drilling is steered so as to 
                            be at or close to 90 degrees from the vertical 
                            to follow a particular geological stratum or reservoir 
                            unit 
                          --------------------------------------------------------- 
 oil in place              the quantity of oil or petroleum that is estimated 
  ("OIP")                   to exist in naturally occurring accumulations. 
                          --------------------------------------------------------- 
 pressure support          maintenance of reservoir pressure as close to 
  or voidage replacement    virgin reservoir pressure as possible and above 
                            bubble point via injection of saline formation 
                            water into the reservoir. The injected water increases 
                            oil recovery via maintaining maximum depletion 
                            drive energy (see above) and displacing oil from 
                            reservoir pores towards the wellbore. The mechanism 
                            is also referred to as voidage replacement. Full 
                            pressure support or "full voidage replacement" 
                            means that the overall volume of saline formation 
                            water injected is equal to the volume of oil extracted. 
                          --------------------------------------------------------- 
 recoverable               those quantities of petroleum (oil in this case) 
  volumes or resources      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 
                          --------------------------------------------------------- 
 

Alba's Project & Investment 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 covering a total area of 142.9 km(2)) in the UK Weald Basin.

Web: www.albamineralresources.com

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 [e-mail] or visit www.rns.com.

END

UPDLFFIFIFLDLIT

(END) Dow Jones Newswires

October 18, 2018 02:01 ET (06:01 GMT)