TIDMALBA
RNS Number : 7147Z
Alba Mineral Resources PLC
19 December 2017
Alba Mineral Resources Plc
("Alba" or the "Company")
Operational Update
Horse Hill-1 Oil Discovery, Weald Basin, UK
Highlights:
-- 150-day production flow test and new drilling programme set
to commence in late winter 2017/18
-- Programme aims to confirm commerciality of Portland and
Kimmeridge oil discoveries and gear-up for first permanent oil
production targeted for early 2019
-- Drilling of HH-2 appraisal well as future producer to
directly follow flow-testing programme
-- Permanent production consent application underway, submission to SCC expected in spring 2018
-- Swift and successful eviction of protesters completed at Horse Hill site
Alba announces that it has been advised by Horse Hill
Developments Ltd ("HHDL"), the operator of the Horse Hill-1
("HH-1") oil discovery, in which entity the Company holds a 18.1%
interest, that key contracts and the requisite funding commitments
from all participants are in place to undertake the production
flow-testing and drilling campaign which was approved by Surrey
County Council ("SCC") in October 2017. The 2018 programme is
planned to commence directly upon the discharge of SCC's
pre-commencement planning conditions, expected by the end of winter
2017/18. Environment Agency approval for the full programme was
granted in September 2017.
Horse Hill Oil Discovery
The HH-1 Portland Sandstone and Kimmeridge Limestone oil
discoveries lie within onshore Weald Basin licences PEDL137 and
PEDL246 covering an area of 55 square miles (143 km(2) ) north of
Gatwick Airport. 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 ("bopd") from the Portland,
Kimmeridge Limestone 3 ("KL3") and Kimmeridge Limestone 4 ("KL4")
reservoir horizons.
2018 Horse Hill Flow Test Programme
Following a short period of civil works to upgrade site
facilities, a 150-day production testing programme focused upon the
Portland, KL3 and KL4 reservoirs will commence. As commercially
viable initial flow rates were established by the 2016 flow tests,
the 2018 testing programme's goal is to confirm that HH-1's
reservoirs are each connected to a commercially viable oil volume,
thus enabling a declaration of commerciality to be made.
The Portland, KL3 and KL4 flow tests, each planned for around
30-40 days duration, will consist of a sequence of stabilised
steady state flow and shut in periods to establish the oil in place
("OIP") directly connected to the well. A short maximum flow-rate
test will also be included for each reservoir. If time permits, a
further short-term test of a deeper untested Kimmeridge reservoir
may be undertaken.
Testing will commence with the Portland reservoir which, given
the 323 bopd stable pumped rate achieved in 2016 and the 32 million
barrels most likely OIP calculated by Xodus in 2017, is considered
a strong candidate for commercial viability. Subject to a
successful test, a Portland declaration of commerciality is
expected to be made by mid-2018. A Kimmeridge declaration of
commerciality would follow programme completion and analysis of
reservoir engineering data.
2018 Horse Hill Drilling Programme
Subject to a successful testing outcome in the Kimmeridge and
Portland, the HH-2 well is planned as a future Portland producer,
with an expected spud towards the end of summer 2018. Drilling
plans include optionality to deepen HH-2 into the Kimmeridge to
gather core and image log data, together with a possible northwards
deviation to access the adjacent oil-bearing Collendean Farm fault
block's significant Portland OIP.
The HH-1z Kimmeridge sidetrack spud is now planned for 2019
following construction of a Kimmeridge reservoir model utilising
HH-1 Kimmeridge production data and any future HH-2 Kimmeridge
core.
Production Planning Application
To achieve its goal of stable, long-term Horse Hill oil
production by spring 2019, HHDL now plans to submit a further
production planning application to SCC in late spring 2018. This
application will seek consent to produce oil initially from
HH-1&1z, and HH-2, together with further production wells in a
second contingent drilling phase.
Horse Hill Eviction
We are informed by HHDL that on Saturday 2 December 2017, a
42-person team, including High Court bailiffs and the UK's
pre-eminent specialist protester removal contractor, successfully
removed around 20 activists who had illegally occupied part of the
Horse Hill site since Thursday 30 November 2017.
An increased security presence will now remain on the site until
completion of the 2018 programme. We understand that HHDL is
rigorously pursuing all available legal means to seek recourse for
this and any future events that prevent or obstruct its right to
conduct its lawful business.
George Frangeskides, Alba's Executive Chairman, commented: "We
are pleased that, together with our consortium partners and the
operator HHDL, we have now clearly mapped the path towards
commercial production at Horse Hill. The execution of this
programme in 2018 will be a key step towards delivering the goal of
commercial production and significant cash flow at Horse Hill."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information, please contact:
Alba Mineral Resources plc
George Frangeskides, Executive Chairman
+44 20 7264 4366
Cairn Financial Advisers LLP (Nomad)
James Caithie / Liam Murray
+44 20 7213 0880
First Equity Limited (Broker)
Jason Robertson
+44 20 7374 2212
Glossary
core or coring a drilling technique that involves
using a doughnut-shaped drilling bit
to capture or "cut" a continuous cylinder-shaped
core of undamaged 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 normally
with a diameter of 3.5 or 4 inches.
Core is taken in petroleum reservoir
rocks for detailed laboratory analyses
of petrophysical and geomechanical
parameters
--------------- --------------------------------------------------
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
--------------- --------------------------------------------------
oil in place the quantity of oil or petroleum that
(OIP) is estimated to exist originally in
naturally occurring accumulations
before any extraction or production
--------------- --------------------------------------------------
sandstone a clastic sedimentary rock whose grains
are predominantly sand-sized. The
term is commonly used to describe
a consolidated and cemented rock made
predominantly of quartz grains
--------------- --------------------------------------------------
sidetrack re-entry of a well from the well's
surface location with drilling equipment
for deviating from the existing well
bore to achieve production or well
data from an alternative zone or bottom
hole location
--------------- --------------------------------------------------
Alba's Project Portfolio
Oil & Gas
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) 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.
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.
Clogau (Gold, Wales): Alba owns 49 per cent of Gold Mines of
Wales Limited, the owner of the Clogau Gold Project in north Wales
incorporating the historic Clogau-St David's Mine.
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.
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 has 100 per cent of the
Limerick base metal project in the Republic of Ireland.
El Mreiti (Uranium, Mauritania): Alba has applied for the
reissue of a uranium permit in northern Mauritania, centred on
known uranium-bearing showings.
This information is provided by RNS
The company news service from the London Stock Exchange
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