UK Oil & Gas Investments PLC Acquisition of further interest in PEDL143 (7222R)

TIDMUKOG

RNS Number : 7222R

UK Oil & Gas Investments PLC

25 September 2017

UK Oil & Gas Investments PLC

("UKOG" or the "Company")

Acquisition of a Further Interest in Onshore Licence PEDL143,

Holmwood-1 Kimmeridge & Portland Exploration Prospect, Weald Basin, UK

UK Oil & Gas Investments PLC (London AIM: UKOG) is pleased to announce that it has agreed to acquire a further 10% interest in Licence PEDL143 ("the Licence") from Warwick Energy Exploration and Production Limited ("Warwick"). Upon completion, the Company will hold a 40% interest in the Licence, which is currently operated by Europa Oil & Gas Limited.

The Licence, covering an area of 91.8 km(2) , contains the Holmwood prospect, which provides a near -term opportunity to test Kimmeridge, Portland and Corallian reservoir targets lying within a look-alike geological feature to both the Company's Horse Hill-1 ("HH-1") oil discovery, located some 8.5 km to the east, and the Broadford Bridge-1 and 1z discovery located some 24 km to the south. As previously reported on 21 March 2016, HH-1 flow tested at a significant commercial aggregate stable dry oil rate of 1,688 barrels of oil per day from the two uppermost Kimmeridge Limestone units and the overlying Portland.

Planning consent from Surrey County Council is in place to drill and flow test the Holmwood-1 exploration well, which is now scheduled for the coming winter season.

Transaction Summary

For a Purchase Price of GBP750,000, the Company will receive Warwick's 10% working interest in the Licence. The total Purchase Price is payable via the issue to Warwick of 9,382,271 new ordinary shares in UKOG with an effective date of 22 September 2017. Completion of the acquisition is conditional upon the Oil and Gas Authority's usual regulatory consent. Upon completion, the Company's Holmwood-1 farmout obligation to Warwick will cease.

A further announcement will be made upon completion.

Stephen Sanderson, UKOG's Executive Chairman, commented:

"This acquisition is another step in UKOG's strategy to further consolidate and increase its holdings in the Kimmeridge oil play. The forthcoming Holmwood well provides a valuable near-term opportunity to test a geological look-alike of both our Broadford Bridge and Horse Hill oil discoveries, and which can hopefully provide further proof of the new Kimmeridge play concept. The significant overlying Portland target also provides additional low-risk potential reserve upside. We look forward to the well's spud in the coming winter and the valuable information it will provide for our quest to monetise the Company's Kimmeridge and Portland oil."

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

 
 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 
----------  --------------------------------------------- 
 flow test   a test period where hydrocarbons are 
              flowed to surface 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 oil at a commercial 
              flow rate and to recover oil in commercial 
              quantities or volumes 
----------  --------------------------------------------- 
 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, 
              being made of the remains of calcareous 
              planktonic algae called coccoliths. 
              The Kimmeridge Limestones are comprised 
              of fine grained coccoliths, fine grained 
              calcium carbonate mud, clay minerals, 
              together with dark grey organic matter. 
----------  --------------------------------------------- 
 

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 
----------------  ---------  ---------------  ---------------  ---------------  --------------  ---------------------- 
Broadford Bridge   PEDL234         100%        Kimmeridge Oil   Kimmeridge Oil       300.0         BB-1&1z drilling 
(3)                                            & Gas Limited    & Gas Limited                      completed testing 
                                                    (4)              (4)                               underway 
----------------  ---------  ---------------  ---------------  ---------------  --------------  ---------------------- 
Holmwood (3)       PEDL143         40%              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       32.435%         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       32.435%            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 Broadford Bridge-1 and 1z discovery well and the extension of the Godley Bridge Portland gas discovery.

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 49.9% 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

END

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September 25, 2017 07:05 ET (11:05 GMT)