Stellar Resources PLC Horse Hill Update (5289E)
19 July 2016 - 4:00PM
UK Regulatory
TIDMSTG
RNS Number : 5289E
Stellar Resources PLC
19 July 2016
Stellar Resources plc
("Stellar" or the "Company")
Upgrade to Portland Oil in Place, Horse Hill-1 Discovery, Weald
Basin
Stellar Resources PLC (LSE AIM: STG) announces that a new
petrophysical analysis by Nutech, incorporating the findings of the
successful Horse Hill-1 ("HH-1") flow test, demonstrates a
threefold increase in calculated total oil in place (OIP) per
square mile at the HH-1 well within the Upper Portland pay zone. As
reported in May 2015 a total Horse Hill Portland P50 OIP of 21
Million Barrels ("MMbbl") was calculated utilising Nutech's
petrophysical analyses. Nutech's May 2015 evaluation assigned a
Portland OIP value of 7.7 MMbbl per square mile at the HH-1 well.
Nutech's current evaluation upgrades the Portland OIP at HH-1 to
22.9 MMbbl per square mile, a 200% increase.
As previously announced in March, the final HH-1 Portland test
flowed at a constrained stable dry oil rate of 323 barrels of oil
per day ('bopd'). The Portland was produced at maximum pump
capacity and showed no clear indication of depletion. It is likely
that the rate can be further increased using a higher capacity
downhole pump during the next planned test.
As previously stated by the Company, the calculated OIP per
square mile should not be construed as recoverable resources,
contingent or prospective resources or reserves.
HH-1 Discovery Well Location and Company Interest
The HH-1 well is located within onshore exploration Licence
PEDL137, on the northern side of the Weald Basin near Gatwick
Airport. PEDL246 lies adjacent to and immediately to the East of
PEDL137. Stellar owns a 10% direct interest in HHDL. HHDL is a
special purpose company that owns a 65% participating interest and
operatorship of Licence PEDL137 and the adjacent Licence PEDL246 in
the UK Weald Basin.
Background
Nutech's Report ("Report") details that the production of dry
oil from the Portland, with little or no observed water production,
required a rethink of the pre-flow test petrophysical model. Prior
to the flow test, interpretations suggested that water would likely
be produced along with oil, as is seen in Portland reservoirs in
nearby producing oil fields. The revised model fully incorporates
well test observations and measurements.
From a similar review of the petrophysical response within the
Kimmeridge Limestones, the Report concludes that the well test
results reinforce Nutech's and the Company's expectations regarding
the significant volumes of OIP seen at the HH-1 well. As previously
reported in April and June 2015, the overall Kimmeridge and
Jurassic shale and limestone sequence is calculated to contain an
OIP of 158 MMbbl per square mile at the HH-1 well and 9,245 MMbbl
over the 55 square miles of the Licences.
Horse Hill Future Plans
The revised petrophysical model will be used to update Xodus'
2015 estimates of the total OIP contained within the mapped Horse
Hill Portland oil accumulation. This will include an estimate of
Contingent Resources net to the Company and will be reported in due
course.
The Operator has also informed the Company that the flow test
data analysis undertaken by Nutech and Xodus provides the necessary
technical encouragement to engage Barton Wilmore Ltd, one of the
UK's leading planning and environmental assessment practitioners,
to prepare and submit a planning application to Surrey County
Council ("SCC"), and to assist with obtaining necessary permissions
from the Environment Agency ("EA"), for a significant appraisal
programme at Horse Hill.
The applications will seek permission to conduct a programme
consisting of the production flow testing of 3 Kimmeridge Limestone
zones plus the overlying Portland over a total flow period of up to
360 days, plus two further appraisal/development wells and the
acquisition of 3D seismic data.
A public consultation and engagement process related to the
planning application is scheduled to take place, leading to an
application to SCC and the EA.
Engineering studies to examine the range of possible flow rates
from a planned horizontal sidetrack well are ongoing. Data to
further calibrate these studies will be acquired during the further
planned extended flow tests.
Qualified Person's Statement:
Stephen Sanderson, UK Oil & Gas Investment plc'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:
Stellar Resources plc: +44 (0) 20 7440 0640
Alastair Clayton
Nominated Adviser: +44 (0) 20 7148 7900
Cairn Financial Advisers
LLP
James Caithie / Sandy
Jamieson
Broker: +44 (0) 20 3137 1902
Optiva Securities Limited
Christian Dennis / Jeremy
King
Public Relations: +44 (0) 20 7929 5599
Square1 Consulting
David Bick
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
------------- ------------------------------------------------
contingent contingent resources are those quantities
resources of petroleum estimated, as of a given
date, to be potentially recoverable
from known accumulations, but the
applied project(s) are not yet considered
mature enough for commercial development
due to one or more contingencies.
Contingent resources may include,
for example, projects for which there
are currently no viable markets, or
where commercial recovery is dependent
on technology under development, or
where evaluation of the accumulation
is insufficient to clearly assess
commerciality. Contingent Resources
are further categorized in accordance
with the level of certainty associated
with the estimates and may be sub-classified
based on project maturity and/or characterized
by their economic status
------------- ------------------------------------------------
flow test a flow test or well test involves
testing a well by flowing hydrocarbons
to the 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 the study of physical and chemical
well rock properties and their interactions
with fluids utilising electric logs,
physical rock and fluid measurements
------------- ------------------------------------------------
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.
The Kimmeridge Limestones are effectively
chalks being comprised of the remains
of calcareous planktonic algae
------------- ------------------------------------------------
oil field an accumulation, pool or group of
pools of oil in the subsurface. An
oil field consists of a reservoir
in a shape that will trap hydrocarbons
and that is covered by an impermeable
or sealing rock
------------- ------------------------------------------------
oil in place the quantity of oil or petroleum that
is estimated to exist originally in
naturally occurring accumulations
before any extraction or production
------------- ------------------------------------------------
petrophysics the study of physical and chemical
rock properties and their interactions
with fluids utilising electric logs,
physical rock and fluid measurements
------------- ------------------------------------------------
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 categorized 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
------------- ------------------------------------------------
About Barton Willmore
Barton Willmore is one the UK's largest planning practices,
specialising in the planning, design and environmental assessment
of energy projects from eleven regional o ces. Barton Willmore and
their energy projects can be found be found on their website:
www.bartonwillmore.co.uk/energy/
This information is provided by RNS
The company news service from the London Stock Exchange
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