TIDMUKOG
RNS Number : 1664L
UK Oil & Gas Investments PLC
14 July 2017
14 July 2017
UK Oil & Gas Investments PLC
("UKOG" or the "Company")
UK Oil and Gas Authority Grants Approval for Extensive Flow Test
Programme
Broadford Bridge-1 Exploration Well, Weald Basin, UK
UK Oil & Gas Investments PLC (London AIM and ISDX: UKOG)
announces that the Oil and Gas Authority ("OGA") has granted final
consent for the Company's forthcoming extended flow test programme
at its 100% owned Broadford Bridge-1 ("BB-1") oil exploration well.
As previously reported, given the multiple positive indications of
oil-filled fractures throughout a vertical Kimmeridge section of
more than 1100 vertical ft, the planned flow test programme has now
been substantially increased. The programme will now test around
900 feet of naturally-fractured Kimmeridge section over multiple
zones and is designed to establish if oil can flow at commercial
rates and in commercial quantities from BB-1.
A comprehensive electric logging and fracture-imaging programme
is now underway, the final two logging runs of which are scheduled
to be run at the weekend. The Company will provide an update on
preliminary log evaluation results in due course.
Flow-testing will follow directly after the completion of
electric logging and the setting of 7-inch steel casing.
About BB-1
BB-1, an exploration step-out, is located near Billingshurst,
West Sussex, within the 300 km(2) PEDL234 licence, in which the
Company has a 100% interest via its ownership of the licence's
operator, Kimmeridge Oil & Gas Limited ("KOGL").
As previously reported, in the Company's opinion, the multiple
positive indications of mobile light oil observed throughout the
entire naturally fractured Kimmeridge KL1-KL4 limestone and shale
target section is supportive that a significant continuous oil
deposit, with a vertical extent in excess of 1100 feet has been
demonstrated at BB-1. The uppermost two units of this zone, KL4 and
KL3, flowed oil at a stable aggregate rate of 1365 barrels per day
in the HH-1 discovery near Gatwick Airport.
This continuous oil deposit therefore likely underlies the
entire PEDL234 licence and a significant area of the wider Weald
Basin, including the Horse Hill-1 Kimmeridge oil discovery some 27
km to the north east. The Company has the largest licence holding
in the Weald Basin and within the prospective area of the
Kimmeridge play.
Stephen Sanderson, UKOG's Executive Chairman, commented:
"I am confident that the logging and testing results will add
further weight to the "proof of concept" that BB-1 lies within a
regionally extensive continuous Kimmeridge oil deposit. The
thickness and vertical extent of this deposit would be of national
significance.
More importantly, perhaps, the expanded testing programme will
also determine whether BB-1 itself is commercially viable and
provides the basis for the Company's first 100% owned Kimmeridge
oil production site."
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: 01483 243450
WH Ireland (Nominated Adviser and Broker)
James Joyce / James Bavister Tel: 020 7220 1666
Cenkos Securities PLC (Joint Broker)
Nick Tulloch / Neil McDonald Tel: 0131 220 6939
Square 1 Consulting (Public Relations)
Brian Alexander / David Bick Tel: 01483 243450 / 020 7929
5599
Glossary:
casing heavy gauge steel tubing designed
to line the wall of a well. The
casing provides a safe controlled
space in which the drill pipe and
bit can operate in isolation from
conditions in overlying rock units.
The steel tubing is bonded to the
surrounding rock by impermeable
concrete, known as "cement"
----------------- ------------------------------------------------
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
----------------- ------------------------------------------------
continuous a petroleum accumulation that is
oil deposit pervasive throughout a large area,
or resource which is not significantly affected
deposit by hydrodynamic influences (i.e.
the buoyancy of oil in water) and
is not trapped by structural or
stratigraphic geological conditions.
The deposit, in contrast to conventional
accumulations, has therefore not
accumulated by the migration of
petroleum over medium to long distances.
The petroleum in such deposits
is found within, or immediately
adjacent or close to, the pore
spaces where the petroleum is generated,
i.e. those pore spaces lying within
petroleum source rocks containing
organic rich compounds (kerogen)
that, when heated over geological
time, transform into petroleum.
These accumulations are generally
associated with organic-rich shales
such as the Kimmeridge Clay Formation.
Such accumulations do not generally
contain significant volumes of
free, mobile formation water and
therefore have no observable hydrocarbon-water
contacts. The extent of the accumulation
is generally defined by the limit
of where burial depths have been
sufficient to transform organic
matter within the petroleum source
rock unit into petroleum.
----------------- ------------------------------------------------
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
----------------- ------------------------------------------------
electric logs Tools which measure the electrical
properties of the rock and fluids
in and surrounding the wellbore
to determine the petrophysical
and geological properties of the
rock in its in-situ state. The
logging equipment is lowered into
the borehole on a steel cable through
which a wire conveys data to be
recorded at surface. The logging
at BB-1 also includes tools which
record 3-dimensional images and
ultrasound scans of the rock designed
to map and characterise natural
fractures
----------------- ------------------------------------------------
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
----------------- ------------------------------------------------
lost circulation a zone of highly porous and permeable
zone (LCZ) rock or voids directly intersecting
the wellbore into which drilling
fluid can escape. Commonly LCZs
occur in extensive open fracture
networks, voids or vugs within
limestones and highly porous and
permeable sandstones
----------------- ------------------------------------------------
naturally a fractured reservoir contains
fractured open and usually connected cracks
reservoir or fissures within the rock matrix;
fractures can enhance permeability
of rocks greatly by connecting
pore-spaces together; naturally
fractured reservoirs have been
created over geological time by
nature, not man-made via hydraulic
fracturing
----------------- ------------------------------------------------
shale a fissile rock that is formed by
the consolidation of clay, mud,
or silt particles, and that has
a finely stratified or laminated
structure. Certain shales, such
as those of the Kimmeridge Clay,
often contain a significant proportion
of organic material, which when
subject to increasing temperature
and pressure over geological time
transform into petroleum (known
as petroleum "source rocks")
----------------- ------------------------------------------------
step-out well a well specifically designed to
determine the lateral extent of
a discovered hydrocarbon accumulation
or play
----------------- ------------------------------------------------
wet gas natural gas, predominantly consisting
of methane (C1), ethane (C2) and
propane (C3) but also containing
the longer molecular chain natural
gases butane and iso-butane (C4),
pentane and iso-pentane (C5). The
C4 and C5 gases are created during
oil-generation within a petroleum
source rock unit when oil is thermally
cracked. At Horse Hill these natural
gases lie in solution within the
oil in the KL3 and KL4 Kimmeridge
Limestone reservoirs (i.e. solution
or associated gas and not as a
separate free-gas phase).
----------------- ------------------------------------------------
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
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Kimmeridge Oil Kimmeridge Oil
Broadford Bridge & Gas Limited & Gas Limited BB-1 drilling
(3) PEDL234 100% (4) (4) 300.0 underway
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Holmwood (3) PEDL143 30% 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 31.2% 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 31.2% 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 extension of the Godley Bridge Portland gas discovery
and the site of the forthcoming Broadford Bridge-1 well.
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 48% 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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