UK Oil & Gas PLC Coring Operations Underway at Horse Hill (6038P)

TIDMUKOG

RNS Number : 6038P

UK Oil & Gas PLC

11 October 2019

UK Oil & Gas PLC

("UKOG" or the "Company")

HH-2/2z Coring Operations Underway at Horse Hill Oil Field

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that it has commenced an extensive conventional coring programme in its 85.635% owned Horse Hill-2 ("HH-2") Portland pilot well. The first 60 ft core, starting at a drilled depth of 2049 ft below rig floor, was successfully landed at surface this morning and is being prepared for onward shipment to a Surrey-based laboratory, where an extensive analysis programme will be undertaken.

Further to the Company's announcement of 8 October, the coring programme has been increased from three to a total of four 60 ft cores, covering the full 240 ft Upper Portland reservoir sequence. Operations to cut core #2 are in progress and the full programme is expected to be completed next week.

The additional 60 ft core #4 is in response to the receipt of a revised HH-1 petrophysical interpretation from Petroscale in Houston, Texas, which indicates that the field's oil water contact ("OWC") may be significantly deeper than previously recognised. If correct, the deeper OWC would increase the field's oil in place and recoverable volumes, potentially significantly beyond those reported in the Company's July 2018 readmission document. Core #4 is purposefully designed to provide the necessary data to help confirm the possible deeper OWC.

Following the coring programme, designed primarily to acquire the key technical data necessary to correctly position the HH-2z horizontal section within the Portland's most oil-productive zone, the well will drill ahead to just over 2300 ft, be electric logged and then plugged back to the "kick-off" point, delineating the start of the horizontal section. Drilling of HH-2z's circa 1000m horizontal trajectory will follow directly afterwards.

UKOG holds a controlling 85.635% interest in the Horse Hill oil field and surrounding highly prospective PEDL137 and PEDL246 licences, which are operated by UKOG's subsidiary company, Horse Hill Developments Ltd.

About HH-2/2z:

HH-2/2z, the first of two new horizontal wells in the field's Portland oil pool, is designed to be retained as a future production well, capable of delivering flow rates significantly higher than the previously reported 362 barrels of oil per day from the HH-1 vertical Portland discovery well. Following a planned extensive HH-2z production flow-testing campaign, both HH-2z Portland and the HH-1 Kimmeridge well are expected to be put into long term production by the end of 2019.

Stephen Sanderson, UKOG's Chief Executive, commented:

"The HH-2 coring programme, a key step towards delivering the correct placement of HH-2z's horizontal section within the field's most oil productive interval, now also has the welcome task of helping confirm a deeper oil water contact. If correct, the deeper contact will have a potentially significant positive impact upon oil in place and recoverable volumes, a welcome development."

Qualified Person's Statement

Matt Cartwright, UKOG's Commercial Director, who has over 36 years of relevant experience in the global oil industry, has approved the information contained in this announcement. Mr Cartwright is a Chartered Engineer and member of the Society of Petroleum Engineers.

For further information, please contact:

UK Oil & Gas PLC

Stephen Sanderson / Kiran Morzaria Tel: [phone]

WH Ireland Ltd (Nominated Adviser and Broker)

James Joyce / James Sinclair-Ford Tel: [phone]

Cenkos Securities PLC (Joint Broker)

Joe Nally / Neil McDonald Tel: [phone]

Novum Securities (Joint Broker)

John Bellis Tel: [phone]

Public Relations

Brian Alexander Tel: [phone]

Glossary

 
 coring           a drilling technique that involves using a doughnut-shaped 
                   drilling bit to capture or "cut" a continuous cylinder-shaped 
                   sample of 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 with a diameter of 3-4.5 inches. 
                   Core is taken in petroleum reservoir rocks for 
                   detailed laboratory analyses of geological, geochemical 
                   petrophysical and geomechanical properties 
 horizontal       a well that during drilling is steered so as to 
  well             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 
                 --------------------------------------------------------------- 
 oil field        an accumulation, pool or group of pools of oil 
                   in the subsurface that produces oil to surface 
                 --------------------------------------------------------------- 
 oil in place     the quantity of oil or petroleum that is estimated 
                   to exist within the reservoir or accumulation i.e. 
                   oil in the ground 
                 --------------------------------------------------------------- 
 oil-water        A bounding surface in an oil pool or reservoir 
  contact (OWC)    above which predominantly oil occurs and below 
                   which predominantly water occurs. The OWC is a 
                   key determinant for the calculation of oil in place 
                   within a conventional hydrocarbon accumulation 
                 --------------------------------------------------------------- 
 well test        or flow 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. 
                 --------------------------------------------------------------- 
 

UKOG Licence Interests

The Company has interests in the following UK licences:

 
Asset                    Licence      UKOG         Licence        Operator      Area (km(2) )          Status 
                                     Interest       Holder 
                                                    UKOG            IGas                          Field currently 
Avington                                             (GB)           Energy                           temporarily 
 (1)                     PEDL070       5%          Limited           Plc            18.3               shut in 
----------------------             ----------  --------------  --------------  --------------  --------------------- 
                                                                                                    BB-1/1z oil 
                                                                                                     discovery, 
Broadford                                                                                           Loxley-1 gas 
 Bridge/Loxley/Godley                                                                                 appraisal 
 Bridge                                             UKOG            UKOG                            well planning 
 (2, 3,                                             (234)           (234)                            application 
 8)                      PEDL234      100%         Ltd (4)         Ltd (4)          300.0             submitted 
----------------------             ----------  --------------  --------------  --------------  --------------------- 
                                                                                                     Finalising 
                                                                                                 new site selection 
                                                                                                  to drill Portland 
                                                                    UKOG                           and Kimmeridge 
A24 (3)                  PEDL143      67.5%         UKOG             (7)            91.8              prospects 
----------------------             ----------  --------------  --------------  --------------  --------------------- 
                                                    UKOG            IGas 
Horndean                                             (GB)           Energy                        Field in stable 
 (1)                      PL211        10%         Limited           Plc            27.3             production 
----------------------             ----------  --------------  --------------  --------------  --------------------- 
                                                    Horse           Horse 
                                                     Hill            Hill                            Production 
Horse Hill                                       Developments    Developments                      tests ongoing, 
 (5)                     PEDL137     85.635%         Ltd             Ltd            99.3          HH-2/2z drilling 
----------------------             ----------  --------------  --------------  --------------  --------------------- 
                                                    Horse           Horse 
                                                     Hill            Hill 
Horse Hill                                       Developments    Developments 

 (5)                     PEDL246     85.635%         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 
----------------------             ----------  --------------  --------------  --------------  --------------------- 
                                                    UKOG            UKOG 
Markwells                                            (GB)            (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. Portland and Kimmeridge Oil field with productive and commercially viable zones, EWT ongoing, production planning consent granted in September 2019, appraisal/development drilling campaign underway. Long term production start expected late 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

8. Gas discovery pending appraisal drilling and development with underlying Kimmeridge potential

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014

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October 11, 2019 03:56 ET (07:56 GMT)