TIDMUKOG
RNS Number : 4007H
UK Oil & Gas PLC
15 November 2018
UK Oil & Gas PLC
("UKOG" or the "Company")
Extended Well Test ("EWT") Hits Significant Production
Milestone, KL3 Exceeds 10,000 Barrels
Horse Hill-1 ("HH-1") Portland and Kimmeridge Oil Discovery,
Weald Basin, UK
UK Oil & Gas PLC (London AIM: UKOG) announces that Horse
Hill Developments Ltd ("HHDL"), a UKOG subsidiary company and the
operator of the HH-1 Kimmeridge Limestone and conventional Portland
Sandstone oil discovery, has informed the Company that total oil
production from the 2018 EWT has reached 13,920 barrels ("bbl")
approximately 2.21 million litres, with gross oil sales revenues of
approximately US$1.1 million.
2018 HH-1 oil production comprises 10,248 bbl (1.63 million
litres) of 40deg API oil from the Kimmeridge Limestone 3 ("KL3")
and 3,672 bbl (c. 584,000 litres) of 35deg API oil from the
Portland. No formation water was returned to surface from either
the KL3 or Portland. The KL4 EWT programme is planned to commence
shortly following the ongoing final KL3 pressure build up test.
HH-1 is located in licence PEDL137 in which UKOG holds a 46.735%
beneficial interest. Key points and further details are summarised
below.
2018 EWT Milestones to date:
-- Approximately US$1.1 million gross 2018 HH-1 oil sales
achieved to date from the KL3 and Portland (this figure excludes
the KL4 oil reservoir, which will be tested shortly).
-- 13,920 bbl (2.21 million litres) total KL3 and Portland production as of 0700 14 November.
-- 10,248 bbl (1.63 million litres) of 40deg API produced solely
from the KL3 as of 0700 14 November.
-- 15,860 bbl (2.52 million litres) aggregate total oil production from the 2016 and 2018 tests.
KL3 EWT Update:
-- 10,248 bbl of KL3 oil was produced over 30 days of sustained
daily natural and pumped flow from an 83 ft perforated interval.
The programme included 9 days of pressure build-ups (or "shut-ins")
and downhole sampling. Production was achieved via a variety of
choke sizes whilst maintaining stable bottom hole pressures. No
formation water was returned to surface; however, small
intermittent slugs of completion brine were recorded.
-- KL3 produced at an initial metered sustained natural flow
rate of 771 barrels of oil per day ("bopd"), with a maximum
recorded half hourly rate of 902 bopd. The average sustained daily
rate over the full test period was 342 bopd. Prior to the final
shut-in period the well was producing oil at a stable bottom hole
pressure of around 800 psi.
-- Total KL3 gas production to date is 3.5 million cubic feet
("cu ft"), with daily produced amounts through the enclosed flare
falling within the Environment Agency's permitted limits and
parameters.
-- EWT results to date indicate that the KL3 oil pool "seen" by
HH-1 is commercially viable. Consequently, following completion of
the KL4 EWT, continued test production of a commingled KL3 and KL4
oil stream is planned.
-- Other than at weekends, when planning restrictions apply,
over 40 road tankers (of 220 barrels crude oil capacity) have
exported KL3 crude oil to BP's Hamble oil terminal, with around 500
barrels of stock tank oil remaining at the site for subsequent
export. The KL3's Brent quality crude has been sold at prevailing
Brent crude oil prices less a small deduction for handling.
-- KL4, which flowed at a reported stable dry oil rate of 901
barrels of oil per day over a 4-hour period in 2016, will be flow
tested after completion of the current KL3 pressure build-up.
Stephen Sanderson, UKOG's Chief Executive, commented:
"The 2018 EWT's total test production of almost 14,000 barrels
of oil, with over 10,000 barrels to date from the single Kimmeridge
KL3 horizon, firmly establishes Horse Hill as a commercially viable
oil field. These "hard fact" production numbers, together with the
million dollar sales revenues, undoubtedly mark the most
significant milestone in the Company's short history. The Company
will spare no effort to push Horse Hill towards full time
production in late 2019/early 2020.
We now look forward to the forthcoming KL4 EWT programme and the
prospect of KL3 and KL4 commingled test production that will take
us up to the spud of the HH-2 and HH-1z production wells in
2019."
Qualified Person's Statement
Rob Wallace, UKOG's principal technical advisor, who has over 40
years of relevant experience in the oil industry, has approved the
information contained in this announcement. Mr Wallace is a
Chartered Scientist, Chartered Geologist and Fellow of the
Geological Society of London, an active member of the American
Association of Petroleum Geologists, a member of the Petroleum
Exploration Society of Great Britain and a member of the South
African Geophysical Society.
For further information, please contact:
UK Oil & Gas PLC
Stephen Sanderson / Kiran Morzaria Tel: 01483 243450
WH Ireland (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 / David Bick Tel: 01483 243450
Glossary
degAPI a measure of the density of crude oil, as defined
by the American Petroleum Institute
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
---------------------------------------------------------
extended well a well test, as per the permission granted by
test the Oil and Gas Authority, with an aggregate flow
period duration over all zones of greater than
96 hours and up to 90 days maximum
---------------------------------------------------------
flow test a flow test or well 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 Status
Interest Holder (km(2)
)
Avington UKOG (GB) IGas Energy Field currently
(1) PEDL070 5% Limited Plc 18.3 shut in
----------------- ---------- -------------- ------------------ -------- ----------------------
Broadford BB-1 & 1z oil
Bridge UKOG (234) UKOG (234) discovery, planning
(4) PEDL234 100% Ltd (4) Ltd (4) 300.0 application approved
----------------- ---------- -------------- ------------------ -------- ----------------------
Seeking alternate
Europa Oil sites to drill
Holmwood & Gas (Holdings) Holmwood and other
(3) PEDL143 40% UKOG plc 91.8 Kimmeridge prospects
----------------- ---------- -------------- ------------------ -------- ----------------------
Horndean UKOG (GB) IGas Energy Field in stable
(1) PL211 10% Limited Plc 27.3 production
----------------- ---------- -------------- ------------------ -------- ----------------------
Production tests
ongoing, 2 further
Horse Hill Horse Hill appraisal wells
Horse Hill Developments Developments scheduled for
(5) PEDL137 46.735% Ltd Ltd 99.3 2018/19
----------------- ---------- -------------- ------------------ -------- ----------------------
Horse Hill Horse Hill
Horse Hill Developments Developments
(5) PEDL246 46.735% Ltd Ltd 43.6 As above
----------------- ---------- -------------- ------------------ -------- ----------------------
Preparing planning
submission for
Arreton-3 oil
Isle of appraisal well
Wight (Onshore) and Arreton South
(2, 3) PEDL331 65% UKOG UKOG 200.0 exploration well
----------------- ---------- -------------- ------------------ -------- ----------------------
Markwells UKOG (GB) UKOG (GB)
Wood (2) PEDL126 100% Limited Limited 11.2
----------------- ---------- -------------- ------------------ -------- ----------------------
Notes:
1. Oil field currently in production.
2. Oil discovery pending development and/or appraisal
drilling.
3. Exploration asset with drillable prospects and leads. PEDL234
contains the Broadford Bridge-1 and 1z
oil discovery well, the extension of the Godley Bridge Portland
gas discovery plus further exploration
prospects.
4. UKOG has a 100% interest in UKOG (234) Ltd, which has a 100%
interest in PEDL234.
5. Oil discovery in 3 zones, EWT ongoing, two further wells
HH-1z and HH-2 planned in early 2019
6. UKOG has a direct 71.9% 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 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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