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Uk Oil & Gas Plc LSE:UKOG London Ordinary Share GB00B9MRZS43 ORD 0.01P
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  -0.025 -2.63% 0.925 0.90 0.95 0.95 0.925 0.95 22,013,429 14:48:32
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 0.2 -2.3 -0.1 - 65

UK Oil & Gas PLC HH-2z Horizontal Drilling Completed

12/11/2019 7:01am

UK Regulatory (RNS & others)


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UK Oil & Gas PLC

12 November 2019

UK Oil & Gas PLC

("UKOG" or the "Company")

Horse Hill Oil Field: HH-2z Horizontal Drilling Completed

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce the successful completion of its Horse Hill-2z ("HH-2z") Portland horizontal drilling campaign (UKOG 85.635% net controlling interest). A total of approximately 2,500 ft of horizontal trajectory was drilled wholly within the Portland reservoir's most oil productive zone or "sweet spot", around 70 times greater exposure to the sweet-spot than seen in the HH-1 Portland vertical discovery well. The campaign's key technical objectives have now all been successfully delivered.

The significantly increased exposure to the sweet-spot within HH-2z, the first horizontal well in the field's Portland oil pool, is the prime technical enabler for HH-2z to be capable of delivering significantly greater flow rates than those seen in the HH-1 vertical well.

The good, clean horizontal trajectory, together with the continued indications of possible improved reservoir quality and significantly lower pressure-depletion than expected, led the Company to decide that there was little technical or economic benefit in pursuing drilling to the maximum planned c. 3,000 ft horizontal trajectory.

Following yesterday's completion of a comprehensive electric logging programme, HH-2z is now being prepared for an extensive extended well test ("EWT") programme, expected to commence in the coming weeks. The EWT, which will include the use of a British designed high-capacity/high-rate downhole electric pump or "ESP", is planned over a minimum 90-day flow period, following which HH-2z and HH-1 will be retained and converted into long-term oil production wells.

Oil production from the HH-1 EWT has continued throughout HH-2/2z drilling and will also continue in parallel with the HH-2z EWT. Total HH-1 test production now stands at over 77,200 barrels.

Analysis and integration of the 240 ft of core, cuttings and electric log data suites acquired in both the HH-2 pilot and HH-2z horizontal continues. Any impactful results will be reported in due course.

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.

Stephen Sanderson, UKOG's Chief Executive, commented:

"We are delighted to have safely and successfully delivered a significant 2,500 ft of horizontal section within the Portland reservoir's sweet-spot, the prime 35 ft zone containing the reservoir's most oil productive sandstones.

The significant horizontal trajectory, combined with the continued positive indications of increased reservoir quality and lower pressure-depletion, effectively negated any technical or economic need to attain the maximum planned c. 3,000 ft horizontal section. As a result, HH-2z remains optimally placed to be able to deliver its goal of significantly higher flow rates than the highly productive HH-1 vertical discovery.

We now look forward to the imminent flow test campaign, a key step towards delivering significant long-term production at Horse Hill."

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: 01483 900582

WH Ireland Ltd (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 Tel: 01483 900582

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 
             --------------------------------------------------------------- 
 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 and volumes. 
             --------------------------------------------------------------- 
 

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                            Production 
                                                     Hill            Hill                          tests ongoing, 
Horse Hill                                       Developments    Developments                     HH-2/2z drilling 
 (5)                     PEDL137     85.635%         Ltd             Ltd            99.3              completed 
----------------------             ----------  --------------  --------------  --------------  --------------------- 
                                                    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 completed. 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

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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