TIDMALBA

RNS Number : 7000J

Alba Mineral Resources PLC

09 April 2015

09 April 2015

Alba Mineral Resources PLC

("Alba" or the "Company")

Significant upgrade of the Horse Hill discovery, UK Weald Basin

Alba is pleased to announce that UK Oil and Gas Investments Plc ("UKOG") has made a positive news release with respect to the Horse Hill-1 well in the UK's Weald Basin. See the UKOG announcement reproduced below.

Horse Hill

The Horse Hill-1 well is located within onshore exploration licence PEDL 137, on the northern side of the Weald Basin near Gatwick Airport. Alba owns a 10% direct interest in HHDL. HHDL is a special purpose company that owns a 65% participating interest and operatorship of Licence PEDL 137 and the adjacent Licence PEDL 246 in the UK's Weald Basin. The participants in the Horse Hill-1 well are HHDL with a 65% working interest and Magellan Petroleum Corporation with a 35% interest. Alba's net attributable interest in PEDL 137 and 246 is therefore 6.5%.

For further information, please contact:

 
Alba Mineral Resources plc 
 Michael Nott, CEO                +44 (0) 20 3696 4616 
Cairn Financial Advisers 
 LLP 
 Avi Robinson/ James Caithie 
 
 Dowgate Capital Stockbrokers     +44 (0) 20 7148 7900 
 Limited: 
 Jason Robertson/ Neil Badger     +44 (0) 1293 517 744 
 

The UKOG news release of 9 April 2015 in full is as follows:

London quoted UK Oil & Gas Investments PLC (LSE AIM: UKOG) is pleased to announce that US-based Nutech Ltd ("Nutech"), one of the world's leading companies in petrophysical analysis and reservoir intelligence, estimate that the Horse Hill-1 ("HH-1") well in the Weald Basin has a total oil in place ("OIP") of 158 million barrels ("MMBO") per square mile, excluding the previously reported Upper Portland Sandstone oil discovery.

The Horse Hill licences cover 55 square miles of the Weald Basin in southern England in which the Company has a 20.36% interest.

Nutech's report to the Company states this OIP lies within a 653 feet aggregate net pay section, primarily within three argillaceous limestones and interbedded mudstones of the Kimmeridge, and the mudstones of the Oxford and Lias sections. Approximately 72% of OIP, or 114 MMBO, lies within the Upper Jurassic Kimmeridge interbedded limestone and mudstone sequence. The Executive Summary of the Nutech Report is appended in full at the end of this release and the full executive report with figures will be available on the Company's website at www.ukogplc.com.

In order to establish estimates of total OIP within the licence area, the semi-regional resource potential of the Weald Basin's eastern footprint is the subject of ongoing analysis under the contracted alliance between Nutech, UKOG and Solo Oil Plc. The results of the estimated OIP within the licence will be reported when completed.

Final assessments of the Upper Portland Sandstone and the Oxford and Lias sections are in progress, with further results expected shortly.

Stephen Sanderson, UKOG's CEO, commented:

"Drilling the deepest well in the basin in 30 years, together with the ability to use concepts, techniques and technology unavailable in the 1980s, has provided new cutting-edge data and interpretations to comprehensively change the understanding of the area's potential oil resources."

"As a result, we believe that, in addition to the Portland Sandstone oil discovery, the Horse Hill well has discovered a possible world class potential resource in what is interpreted to be a new Upper Jurassic "hybrid play".

"With the help of Nutech's considerable global knowledge base and play library, we have identified that the Horse Hill Upper Jurassic rock sequence is analogous to known oil productive hybrid reservoir sections of the Bakken of the US Williston Basin, the Wolfcamp, Bone Springs, Clearfork, Spraberry, and Dean Formations in the US Permian Basin and the Bazhenov Formation of West Siberia."

"The US analogues have estimated recovery factors of between 3% and 15% of Oil in Place."

"The Company considers that the high pay thickness, combined with interpreted naturally fractured limestone reservoir with measurable matrix permeability, gives strong encouragement that these reservoirs can be successfully produced using conventional horizontal drilling and completion techniques."

"Nutech's results combined with our extensive geochemical analyses strongly indicates that the Company's Horse Hill licences lie within the likely sweet spot of the identified "Weald hybrid play"."

"Appraisal drilling and well testing will be required to prove its commerciality, but this "Weald hybrid play" has the potential for significant daily oil production."

"The operator, Horse Hill Developments Ltd, with the assistance of Nutech, is now focussed on flow testing the Portland Sandstone and Kimmeridge Limestone sections of the well, to establish producibility and thereby seeking to quantify an overall net discovered resource".

UKOG's interest in Horse Hill:

The Horse Hill-1 well is located within onshore exploration License PEDL 137, on the northern side of the Weald Basin near Gatwick Airport. UKOG owns a 30% direct interest in Horse Hill Developments Ltd ("HHDL") and a 1.32% interest in HHDL via its 6% interest in Angus Energy Limited. HHDL is a special purpose company that owns a 65% participating interest and operatorship of Licence PEDL 137 and the adjacent Licence PEDL 246 in the UK Weald Basin.

Qualified Person's Statement: Stephen Sanderson, UKOG's CEO, who has over 30 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.

The oil in place hydrocarbon volumes estimated should not be considered as either contingent or prospective resources or reserves.

For further information please contact:

UK Oil & Gas Investments PLC

David Lenigas / Donald Strang Tel: 020 7440 0640

WH Ireland (Nominated Adviser and Broker)

James Joyce / Mark Leonard Tel: 020 7220 1666

Square 1 Consulting (Public Relations)

David Bick / Mark Longson Tel: 020 7929 5599

Nutech Executive Report Summary (dated: 8 April 2015):

Results and Recommendations:

NULOOK and NULIST (electric) log interpretation results, now calibrated by POROLAB's rock analyses, calculate that the Horse Hill-1 well, excluding the structurally constrained Upper Portland sandstone, has a total oil in place ("OIP") estimate of 158 million barrels of oil ("MMBO") per square mile. The 158 MMBO per square mile OIP correlates to an aggregate pay section of 653 feet, primarily from the argillaceous limestones and mudstones of the Kimmeridge, and the mudstones of the Oxford and Lias sections. Table 1 shows the calculated OIP values for the well's main stratigraphic units. It is highly recommended that conventional flow testing be undertaken in one or more of the Kimmeridge limestone units as part of the planned flow testing of the Upper Portland sandstone discovery.

From its proprietary regional well log analyses NUTECH considers that the HH-1 OIP extends significantly beyond the 55 square miles of PEDL137 and PEDL246 with strong evidence that the eastern section of the Weald Basin contains considerably larger oil potential than has been previously estimated and published. This regional potential is the subject of ongoing analysis under NUTECH's contracted alliance with UK Oil & Gas Investments PLC and Solo Oil Plc.

Table 1: HH-1 NULOOK/NULIST OIP Summary Table:

 
                             DEPTH   GROSS 
 SECTION          DEPTH FT     FT      FT    PAY FT        OIP 
                    TOP      BASE     MD       MD     MMBO/Sq. Mile 
---------------  ---------  ------  ------  -------  -------------- 
 L. Portland        2038     2320     129      19          7.2 
 Kimmeridge         2482     4430    1948     511         114.9 
 Top Corallian      4430     5000     374      0           0.3 
 Oxford             5050     5466     415      30          7.2 
 Kellaways          5466     5517     16       0           0.0 
 Upper Lias         6370     6711     220      0           0.4 
 Middle 
  Lias              6711     7072     100      4           1.6 
 Lower Lias         7072     8096     986      53         17.6 
 Triassic           8288     8507     150      12          3.2 
 Palaeozoic         8508     8837     213      24          5.5 
---------------  ---------  ------  ------  -------  -------------- 
 TOTAL                               4308     653         158.0 
                                      TOT     TOT          CUM 
---------------  ---------  ------  ------  -------  -------------- 
 

The most significant calculated OIP volumes lie within the Upper Jurassic Kimmeridge section at 115 MMBO per square mile. The total Kimmeridge section calculates at 511 feet net pay with a corresponding average TOC of 2.8 %. Table 2, below, illustrates that the Kimmeridge now contains three interbedded argillaceous limestone and mudstone hybrid reservoir sequences, which contain an aggregate OIP of 107 MMBO per square mile, or 93% of the total Kimmeridge OIP.

The Middle Kimmeridge hybrid reservoir sequence is likely the most prospective as it contains two thick circa 100 gross feet oil saturated limestone reservoir units with an aggregate limestone only net pay section of 78 feet. The Middle Kimmeridge units are encased within 593 gross feet of self-sourcing, oil-saturated organic rich mudstones, with high TOCs up to 9.4%.

Fracture analysis, together with information from offset well information, indicates that the Kimmeridge shows good evidence of natural fracturing, particularly in the Middle Kimmeridge Limestone 1 and 2 pay sections.

Table 2: Kimmeridge Total and Kimmeridge Hybrid Section OIP and Metrics:

 
 UNIT          LITHOLOGY    TOP    BASE   GROSS   NET     PAY     CLAY   PORO-SITY    SW    AVG     OIP 
                             FT     FT      FT     PAY    RANK*     %        %        PAY    (3)    MMBO/ 
                             MD     MD      MD     FT                                 (2)    TOC     SQ. 
                                                   MD                                  %      %     MILE 
-----------  ------------  -----  -----  ------  -----  -------  -----  ----------  -----  -----  ------- 
               Mudstone 
 U. KIMM           1        2482   2649    167     19      3      50.1      9.7             1.14    7.9 
-----------  ------------  -----  -----  ------  -----  -------  -----  ----------  -----  -----  ------- 
         Mudstone 
             2              2649   2825    176    100      3      50.2      9.7             2.13    19.2 
 ------------------------  -----  -----  ------  -----  -------  -----  ----------  -----  -----  ------- 
           Upper 
         Limestone 
             1              2825   2931    106     17     2.94    16.1      8.5      53.8   n/a     3.0 
 ------------------------  -----  -----  ------  -----  -------  -----  ----------  -----  -----  ------- 
         Mudstone 
             3              2931   3082    151     98     2.97    42.2      7.9             4.05    17.4 
 ------------------------  -----  -----  ------  -----  -------  -----  ----------  -----  -----  ------- 
           Lower 
         Limestone 
             2              3082   3184    102     61     2.66    18.2      8.5      45.6   n/a     12.7 
 ------------------------  -----  -----  ------  -----  -------  -----  ----------  -----  -----  ------- 
 M. KIMM 
  HYBRID       Mudstone 
  SEQUENCE         4        3184   3450    266    113      3      41.4      7.2             3.69    20.6 
-----------  ------------  -----  -----  ------  -----  -------  -----  ----------  -----  -----  ------- 
 L. KIMM 
  HYBRID       Limestone 
  SEQUENCE         3        3450   3479    29      17     2.88    23.6      9.3      57.0   n/a     3.0 
-----------  ------------  -----  -----  ------  -----  -------  -----  ----------  -----  -----  ------- 
         Mudstone 
             5              3479   4430    951     86      3      41.8      5.1             2.48    31.2 
 ------------------------  -----  -----  ------  -----  -------  -----  ----------  -----  -----  ------- 
           TOTAL                          1948    511                                              114.9 
 ------------------------  -----  -----  ------  -----  -------  -----  ----------  -----  -----  ------- 
 

*NUTECH flag system that shows the average pay ranking over a formation sequence (5 flags=1, 4 flags=2, 3 flags=3), where 3 is minimum pay ranking; (2) Sw in generative shale assumed as 0%, i.e. no free water; (3) TOC calculated appear underestimated at high TOC sample values >5% TOC, values up to 9.4% seen in samples.

Potential Analogue Plays and Recovery Factors:

From a geological, reservoir engineering and possible future operational perspective, the interbedded naturally fractured carbonate and mudstone reservoirs encountered in the HH-1 are analogous to the Middle Bakken limestone of the Williston Basin. Further analogues are represented by the interbedded tight clastic reservoirs and source rocks of the Three Forks Formation, the US Permian Basin (Bone Springs, Wolfcamp, Clearfork, Spraberry, and Dean Formations), and possibly the age equivalent Upper Jurassic Bazhenov Formation of Russia's Western Siberian basin.

Bakken wells analyzed by NUTECH show a contacted OIP of between 10-20 MMBO per square mile, from a formation thickness of 40-150 feet, containing one hybrid carbonate reservoir to mudstone source-rock pairing. The Kimmeridge in HH-1 now shows three carbonate reservoir-mudstone source-rock pairings. Recoveries per well to date from the Bakken range from 8-15% in identified sweet spots.

NUTECH's analyses of the Wolfcamp/Bone Springs shows a contacted OIP range of between 60-160 MMBO per sq. mile in a 300-400 feet thick section and exhibits recovery factors of 1-10%.

Table 3: Comparison Metrics of HH Kimmeridge vs. Analogous Hybrid Producing Plays:

 
                    HH Kimmeridge     Bakken &Three     Wolfcamp/Bone     U. & L. 
                     (Weald Basin)         Forks           Springs        Bazhenov 
                                                                          Russia- 
 Basin Names                                                             W. Siberia 
-----------------  ---------------  -----------------  --------------  ------------ 
 Geological          U. Jurassic         Devonian          Permian      U. Jurassic 
  Era                                 & Carboniferous 
 Reservoir          145-157 MMybp        320-380        260-300 MMybp     140-152 
  Age                                      MMybp                           MMybp 
 Depth (feet)         2300-4400*       8,000-11,000     7,000-10,000    8000-11000 
 Areal Extent 
  (sq. miles)          1100(2)           6500             7800         800000 
 Thickness 
  (feet)              1500-2000           25-150           300-400        60-150 
 Porosity               4-10%             4-12%             4-8%           2-12% 
 Water sat. 
  (Sw)                 10?-57%            25-60%           20-50%        10-15%*** 
 Clay Content        15**-50***%           25%             20-30%         10-30% 
 Maturity Ro          0.5- 0.91%          0.5-1%           0.8-1%        0.5-1.1% 
 Measured TOC%         2- 9.4%            8-12%             4-8%          3->11% 
 Hydrogen Index        650-900           298-450          100-700        200-700 
 OIP/sq. mile 
  (MMBO)                 114              10-20            60-160        7.25->13 
 Recovery Factor         ???              8-15%             3-10%           ??? 
-----------------  ---------------  -----------------  --------------  ------------ 
 

*HH-1 uplifted by up to 5000 feet, **within argillaceous limestone units, *** in mudstones, (2) total Jurassic Weald shale prospective area, from BGS 2014, fig 47.

The Bazhenov Formation, of the same geological age and general stratigraphic, oil source rock composition and source richness as the Kimmeridge, constitutes the main oil source rock of the super-giant W. Siberian petroleum system. Some 200 conventional Soviet era vertical wells have been drilled and produced at highly variable rates and recovery factors in the last 50 years in the Bolshoi Salym field area. Production to date is primarily from a hybrid of thin naturally fractured low porosity and permeability limestone, silicite and carbonate silicite conventional tight reservoir units interbedded within the currently generative high TOC source rock (key metrics are shown in Table 3).

Recent publications show that the Upper and Lower Bazhenov mudstone oil source rock formations both contain a 10-30 feet low porosity limestone/carbonate conventional reservoirs created by the replacement of radiolarian fossils and algae or bacteria by carbonate cementation. Additional reservoirs exist in thin 5-10 feet thick naturally fractured silicites and carbonate silicites. The Bashenov constitutes a significant future hybrid reservoir target and oil resource albeit on a much larger geographical scale than the Kimmeridge. It is the focus of intense studies and horizontal drilling by Shell/Gazprom and Exxon/Rosneft. Bazhenov well economics have likely been significantly boosted by Russia's recent oil/corporation tax exemptions for tight (low poroperm i.e., under 2 milliDarcy permeability) reservoir developments.

Work in Progress:

Final assessments of the Upper Portland sandstone reservoir and the Oxford and Lias sections are still being completed with the assistance of UKOG and its technical team. The overall regional potential of the Weald Basin is the subject of ongoing analysis under the contracted alliance.

Glossary:

 
 argillaceous         a limestone containing a significant 
  limestone            proportion of clay minerals 
-------------------  ------------------------------------------------- 
 cementation          involves ions carried in groundwater 
                       chemically precipitating to form new 
                       crystalline material between sedimentary 
                       grains 
-------------------  ------------------------------------------------- 
 clastic              rocks composed of broken pieces of older 
                       rocks 
-------------------  ------------------------------------------------- 
 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 
-------------------  ------------------------------------------------- 
 effective porosity   The interconnected pore volume or void 
  (PHIE)               space in a rock that contributes to 
                       fluid flow or permeability in a reservoir. 
                       Effective porosity excludes isolated 
                       pores and pore volume occupied by water 
                       adsorbed on clay minerals or other grains 
-------------------  ------------------------------------------------- 
 electric logs        tools used within the wellbore to measure 
                       the rock and fluid properties of surrounding 
                       rock formations 
-------------------  ------------------------------------------------- 
 fractured            containing a crack or surface of breakage 
                       within rock; fractures can enhance permeability 
                       of rocks greatly by connecting pores 
                       together 
-------------------  ------------------------------------------------- 
 free water           water that is mobile, available to flow, 
                       and not bound to surfaces of grains 
                       or minerals in rock 
-------------------  ------------------------------------------------- 
 hydrogen index       the amount of hydrogen relative to the 
  (HI)                 amount of organic carbon in a sample, 
                       normally expressed in milligrammes of 
                       hydrogen per gramme of TOC. The higher 
                       the amount of hydrogen the more oil 
                       prone the source rock when subjected 
                       to time, temperature and pressure; an 
                       initial HI over 450 normally indicates 
                       an oil prone source rock 
-------------------  ------------------------------------------------- 
 limestone            a carbonate sedimentary rock predominantly 
                       composed of calcite 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 
-------------------  ------------------------------------------------- 
 lithology            The macroscopic nature of the mineral 
                       content, grain size, texture and color 
                       of rocks 
-------------------  ------------------------------------------------- 
 Micrite              a sedimentary rock formed of very fine 
                       grained calcareous particles ranging 
                       in diameter from 0.06 to 2mm, often 
                       referred to as lime mudstone 
-------------------  ------------------------------------------------- 
 milliDarcy           a standard unit of measure of permeability. 
                       One Darcy describes the permeability 
                       of a porous medium through which the 
                       passage of one cubic centimeter of fluid 
                       having one centipoise of viscosity flowing 
                       in one second under a pressure differential 
                       of one atmosphere where the porous medium 
                       has a cross-sectional area of one square 
                       centimeter and a length of one centimeter. 
                       A milliDarcy (mD) is one thousandth 
                       of a Darcy and is a commonly used unit 
                       for reservoir rocks 
-------------------  ------------------------------------------------- 
 MD                   measured depth 
-------------------  ------------------------------------------------- 
 MMBO                 millions of barrels of oil 
-------------------  ------------------------------------------------- 
 MMybp                millions of years before present 
-------------------  ------------------------------------------------- 
 mudstone             an extremely fine-grained sedimentary 
                       rock consisting of a mixture of clay 
                       and silt-sized particles 
-------------------  ------------------------------------------------- 
 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 
-------------------  ------------------------------------------------- 
 oil saturation       the amount of the pore space within 
                       a reservoir containing oil 
-------------------  ------------------------------------------------- 
 organic rich         a rock rich in organic matter which, 
                       if subjected to sufficient heat and 
                       pressure over geological time, will 
                       generate oil or gas. Typical source 
                       rocks, usually shale or limestone, contain 
                       above an initial 2% organic matter by 
                       weight 
-------------------  ------------------------------------------------- 
 Pay                  a reservoir or portion of a reservoir 
                       that contains economically producible 
                       hydrocarbons. The term derives from 
                       the fact that it is capable of "paying" 
                       an income. The overall interval in which 
                       pay sections occur is the gross pay; 
                       the smaller portions of the gross pay 
                       that meet local criteria for pay (such 
                       as minimum porosity, permeability and 
                       hydrocarbon saturation) are net pay 
-------------------  ------------------------------------------------- 
 Permeability         the capability of a porous rock or sediment 
                       to permit the flow of fluids through 
                       its pore spaces 
-------------------  ------------------------------------------------- 
 Play                 a set of known or postulated oil and 
                       or gas accumulations sharing similar 
                       geologic, geographic, and temporal properties, 
                       such as source rock, migration pathways, 
                       timing, trapping mechanism, and hydrocarbon 
                       type 
-------------------  ------------------------------------------------- 
 Porosity             the percentage of void space in a rock 
                       formation, where the void may contain, 
                       for example, water or petroleum 
-------------------  ------------------------------------------------- 
 recovery factor      those quantities of petroleum, as a 
                       proportion of OIP anticipated to be 
                       commercially recoverable by application 
                       of development projects to known accumulations 
                       from a given date forward under defined 
                       conditions 
-------------------  ------------------------------------------------- 
 Reservoir            a subsurface rock formation containing 
                       an individual natural accumulation of 
                       moveable petroleum that is confined 
                       by impermeable rock/formations 
-------------------  ------------------------------------------------- 
 sandstone            a clastic sedimentary rock whose grains 
                       are predominantly sand-sized. The term 
                       is commonly used to imply consolidated 
                       sand or a rock made of predominantly 
                       quartz sand 
-------------------  ------------------------------------------------- 
 Silicite             fine grained rocks composed primarily 
                       of layered silica 
-------------------  ------------------------------------------------- 
 source rock          a rock rich in organic matter which, 
                       if subjected to sufficient heat and 
                       pressure over geological time, will 
                       generate oil or gas. Typical source 
                       rocks, usually shale or limestone, contain 
                       above an initial 1% organic matter by 
                       weight 
-------------------  ------------------------------------------------- 
 sweet spot           the area within a shale source rock 
                       unit showing highest TOC and generative 
                       potential normally associated with basin 
                       centred deposition 
-------------------  ------------------------------------------------- 
 thermal maturity     a term applied to source rocks which 
  (R(o) )              have received sufficient temperature 
                       and pressure over geological time to 
                       generate hydrocarbons 
-------------------  ------------------------------------------------- 
 TOC                  total organic carbon - the weight percent 
                       amount of organic carbon within the 
                       rock which is a commonly used measure 
                       of hydrocarbon source rock richness 
-------------------  ------------------------------------------------- 
 water saturation     The fraction of water in a given pore 
  (S(w) )              space. It is expressed in volume/volume, 
                       percent or saturation units. 
-------------------  ------------------------------------------------- 
 

ENDS

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCEASLNEFPSEEF

Alba Mineral Resources (LSE:ALBA)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Alba Mineral Resources Charts.
Alba Mineral Resources (LSE:ALBA)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Alba Mineral Resources Charts.