TIDMSOLO
RNS Number : 0397A
Solo Oil Plc
17 December 2014
For Immediate Release
17 December 2014
SOLO OIL PLC
("Solo" or the "Company")
Horse Hill-1 Oil Discovery Update
Upgrade on Portland Discovered Oil in Place Volumes and
Conventional Upper Jurassic Limestone Oil Play, Weald Basin
UK
Solo today announces that, as a result of the analysis and
integration of subsurface data from the Horse Hill-1 ("HH-1")
discovery well, in which Solo holds a net attributable interest of
6.5%, the calculated estimates of the discovered most likely gross
oil initially in place ("OIIP") within the overall Upper Portland
sandstone conventional reservoir in the HH-1 and Collendean Farm-1
("CF-1") structure have increased by over 250% from the 3.1 million
barrels ("mmbbls") reported on 24 October 2014, to a current most
likely OIIP of 8.2 mmbbls. Similarly, calculated estimates of low
case (P90) discovered OIIP has increased by nearly 400% to 5.7
mmbbls and high case (P10) OIIP volumes show a 250% increase to
12.1 mmbbls.
In addition, the results of electric log analysis in the HH-1,
CF-1 and other regional wells to the south of PEDL 137 ("Licence"),
combined with ongoing geochemical analysis of HH-1 samples,
indicate that the key elements of a conventional Upper Jurassic
Limestone oil play have been demonstrated to extend into the
southern part of the Licence. The HH-1 well demonstrates the
presence of limestone porosity adjacent to, both overlying and
underlying, thermally mature super-saturated world-class oil source
rocks within a 1,496-foot gross interval of the Upper Jurassic
Kimmeridgian Clay ("KC") Formation between 2,224 feet and 3,720
feet TVDss. Samples from the KC show total organic carbon ("TOC")
of up to 9.4%, generative potentials of between 45-103 kg of
hydrocarbons per tonne and with measured vitrinite reflectance
("Ro") exceeding 0.81% at the base of the formation.
Further conventional oil potential within the Middle Jurassic
Kellaways Beds sandstones in HH-1 is currently under
investigation.
Work is underway to obtain the necessary permissions to conduct
a production flow test from the HH-1 Upper Portland conventional
oil pool in 2015.
The current OIIP estimates are set out in Table 1 below. The
full results of the HH-1 well are complex by their nature. The
Operator's post-well evaluation has taken longer than expected and
is still continuing, as described below.
Neil Ritson, Solo's Chairman, commented:
"The presence of a considerably larger volume of oil in place is
very encouraging and we are keen to see the flow rate from the
Portland Sandstone tested in order to assess the recoverable volume
of oil. The presence of additional potential oil resources in the
Kimmeridgian limestone and a far more mature source rock than
previous expected are also of great interest and we look forward to
updates as further studies are completed."
Portland Sandstone Discovery
Integration of the Vertical Seismic Profile ("VSP") data from
the HH-1 well has enabled a revised interpretation of available 2D
seismic data to be made over the geological structure containing
the HH-1 discovery. The current seismic interpretation is strongly
indicative that the Upper Portland oil pool, discovered by HH-1, is
most likely part of a larger geological structure containing the
CF-1 well to the north drilled by Esso in 1964.
New electric log analysis of the CF-1 well demonstrates that a
near identical Upper Portland reservoir section to that seen in
HH-1 exists with a gross 97-foot oil saturated "missed oil pay"
section and average porosities of 16%. The Company reported on 24
October 2014 that HH-1 contained a gross oil saturated Upper
Portland section of 102 feet with 16% average porosity. Oil
saturations exist to the base of the Upper Portland sand reservoir
in both HH-1 and CF-1, indicating that the oil water contact lies
deeper within the structure. The Company currently interprets that
the proven lowest oil at 1,900 feet TVDss found in the HH-1 well
now demonstrates that a most likely 140 feet hydrocarbon column has
been discovered, 38 feet greater than the 102-foot oil column
previously reported. The mapped spill point (and possible oil water
contact) of the combined HH-1 and CF-1 Upper Portland oil pool
demonstrates that a possible 240-foot maximum hydrocarbon column
could exist within a structural closure of approximately 3,400
acres (14 square kilometres).
The Operator's analyses of the Brockham-1 well logs demonstrate
that the oil producing Upper Portland reservoir thickness and
overall quality in the nearby Brockham field are very similar to
HH-1 and CF-1 and provide a direct producing reservoir analogue.
However, the Operator's calculated most likely (P50) OIIP of 8.2
mmbbls for the HH-1 and CF-1 discovery is significantly larger than
the Brockham field's most likely (P50) Upper Portland OIIP of 3.62
mmbbl, certified by RPS Energy at end 2013.
Work is ongoing to submit an application to the Department of
Energy and Climate Change ("DECC"), the Environment Agency and
Surrey County Council for permission to carry out a flow test on
the Upper Portland Sandstone in HH-1. The planned flow test will
likely include a pressure transient test to examine the reservoir
connectivity within the overall geological structure.
Subject to this HH-1 flow test, a future submission is planned
to DECC of a Field Development Plan for the HH-1 and CF-1
discovery. The presence of two wells containing oil saturations
down to base reservoir within the same mapped structural closure,
and with similar reservoir quality to the Brockham oil field but
larger OIIP, significantly increases the Company's confidence that
the Upper Portland discovery can be developed as a commercial oil
field.
Table 1: Estimated gross in place discovered Upper Portland
Sandstone oil volumes
HH-1 and CF-1 Structure Low (P90) Medium (P50) High (P10)
------------------------- ---------- ------------- -----------
Discovered OIIP,
mmbbls 5.7 8.2 12.1
------------------------- ---------- ------------- -----------
Increase from 24.10.14 +380% +260% +250%
------------------------- ---------- ------------- -----------
Solo has a net attributable interest of 6.5% in the
discovery.
It should be noted that the OIIP numbers in Table 1, above,
represent the Operator's management current viewpoint. For the
avoidance of doubt OIIP numbers should not be construed as resource
or reserve estimates as a significant proportion will not be
recovered during any future production regime.
Volumes have been estimated by the Operator using methodologies
and standards published by the Society of Petroleum Engineers.
Conventional Upper Jurassic Limestone Oil Potential
The HH-1 well penetrated an unexpectedly thick 1,496-foot gross
interval of the Upper Jurassic Kimmeridge Clay ("KC") Formation
between 2,224 feet and 3,720 feet TVDss. The sequence contains
predominantly organically rich high gamma-ray hot shale,
inter-bedded with two regionally correlatable limestone units.
Preliminary examination of cuttings indicates the limestones are
coccolithic argillaceous micrites. The mud log showed elevated gas
readings above the upper limestone (KC Micrite 1) and weak oil
shows were reported within the limestone. The KC Micrite 1
encountered at 2,510.4 feet TVDss has a gross thickness of 113 feet
and electric log analysis indicates the development of 37 feet of
net porosity greater than 5%. A continuous oil saturated zone of
approximately 20 feet below 2,550 feet TVDss is calculated. Average
total porosity within the hydrocarbon zone is calculated at 6.4%
and is dominated by secondary porosity.
The gamma-ray log through the KC Micrite 1 shows a near
identical pattern and formation thickness to the equivalent micrite
found in the Balcombe-1 well, drilled by Conoco in 1986
approximately 15 kilometres to the south. The Operator's analysis
also demonstrates that the top of the oil saturated porous zone in
HH-1 occurs at an identical stratigraphic and gamma-ray point to
the top of the proven tested oil pay zone in Balcombe-1. Total
porosities of 8% are calculated within the Balcombe pay section and
are thus similar to HH-1.
The lower limestone (KC Micrite 2) has a gross thickness of 83
feet and shows 28.6 feet of net porosity development with an
average porosity of 7%. No shows or elevated gas readings were
reported, although minor thin oil saturated zones are calculated
from logs.
The Company reported on 5 November 2014 that multiple oil shows
and elevated gas readings were encountered within the KC Formation
and that preliminary geochemical analysis showed oil source rock
potential to likely be higher than expected. Subsequent analysis of
a further eight KC shale samples, from 2,715 to 3,345 feet TVDss
encasing the KC micrites, show TOCs of 4.64 to 9.4% and generative
potentials of between 45 and 103 kg hydrocarbon/tonne of rock.
Corresponding calculated hydrogen indices (HI) are extremely high,
ranging from 759 to 1098, indicating a very oil-prone source rock.
These initial sample results gives management confidence that the
KC within the south of PEDL 137 has the potential to be a
world-class source rock of equivalence to the proven conventional
oil source rocks of the KC within the Viking Graben and Central
Graben of the North Sea.
Thermal maturation data obtained from well cuttings samples
shows that the pre-Oligocene and Jurassic section of the HH-1 well
has achieved greater than expected maximum burial depths. Measured
vitrinite reflectance ("Ro") between the top and base of the KC
ranges from 0.62-0.81%, demonstrating that the KC lies within the
early to peak oil generation window. The Lower Liassic shale and
limestone sequence shows a measured Ro of up to 0.98%, indicating
the late peak oil to early wet-gas condensate generation
window.
The 2014 Weald Shale Report by the British Geological Survey
models the top of the oil window within the Weald Basin to
represent a burial depth of 7,000 to 8,000 feet (i.e. Ro of
0.5-0.6%). Consequently, the top of the oil window, interpreted to
be at circa 2,300 feet TVDss in the HH-1 well, indicates the well
was likely to have been uplifted by approximately 4,500 to 5,500
feet during the post-Oligocene inversion period. The southern part
of PEDL 137 during KC deposition would thus have been in a more
basin-centred location than at present day and could lie within a
high TOC KC basinal sweet-spot.
The Operator has concluded that the most likely source of oil
saturations found within the KC Micrite 1 is thus from the adjacent
underlying and overlying hot shale of the KC in direct proximity to
the HH-1 well.
The Operator concludes that the presence of thermally mature KC
source rocks, together with porosity within the KC Micrites and log
derived micrite oil saturations, strongly indicate that an Upper
Jurassic limestone conventional play exists within the southern
area of PEDL 137.
Further detailed integrated geochemical and petrophysical
studies are ongoing to help establish possible OIIP volumes in the
KC Micrite 1. The Operator is also currently evaluating the
feasibility of a short flow test in the KC Micrite 1 after the
planned Upper Portland flow test.
Conventional Middle Jurassic Kellaways Beds Oil Potential
Re-examination of the HH-1 mud log shows that gas levels
increase significantly 60 feet above the Kellaways Sandstone,
continue throughout the 47-foot gross sand interval and immediately
drop off within the underlying Great Oolite limestone. No observed
oil shows were recorded within the Kellaways Sandstone. Geochemical
analyses of samples from the Oxford Clay demonstrate that the
section directly above the Kellaways Beds is thermally mature for
oil generation (Ro of greater than 0.81%) and contains potential
generative oil source rocks with TOCs of 1.9 to 2.9%. Electric logs
are now being evaluated in more detail, to determine whether
potential oil saturations lie within the Kellaways Sandstone.
Solo's interest in Horse Hill
The Horse Hill-1 well is located on the northern side of the
Weald Basin near Gatwick Airport. Solo owns a 10% interest in Horse
Hill Development Limited ("HHDL"), a special purpose company which
owns a 65% participating interest and holds operatorship of onshore
licences PEDL137 and the adjacent licence PEDL 246 in the UK 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.
Qualified Person's Statement:
The information contained in this announcement has been reviewed
and approved by Neil Ritson, Chairman and Director for Solo Oil Plc
who has over 35 years of relevant experience in the oil industry.
Mr. Ritson is a member of the Society of Petroleum Engineers, an
Active Member of the American Association of Petroleum Geologists
and is a Fellow of the Geological Society of London.
Glossary:
2D seismic seismic data collected using the two-dimensional
common depth point method
---------------------- ----------------------------------------------------------
argillaceous a rock containing a significant proportion of
clay minerals
---------------------- ----------------------------------------------------------
coccolithic containing coccoliths which are the skeletal
remains of calcareous algae/plankton as found
ubiquitously in the Chalk of NW Europe
---------------------- ----------------------------------------------------------
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 used within the wellbore to measure the
rock and fluid properties of surrounding rock
formations
---------------------- ----------------------------------------------------------
gamma-ray log an electric log which measures natural background
radioactivity emitted mainly by potassium, uranium
and thorium isotopes used as a sedimentary lithology
discriminator
---------------------- ----------------------------------------------------------
generative potential the amount of hydrocarbons that can be generated
(S2) from a unit volume of source rock established
via the S2 peak from rock-eval pyrolysis, normally
expressed in milligrammes of hydrocarbon per
gramme of rock (or kilogramme per tonne)
---------------------- ----------------------------------------------------------
hot shale a shale rock displaying average initial TOCs
normally exceeding 2% and represented by a high
gamma ray electric log reading
---------------------- ----------------------------------------------------------
hydrogen index the amount of hydrogen relative to the amount
(HI) 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
---------------------- ----------------------------------------------------------
kerogen the fraction of organic material in a sedimentary
rocks that is insoluble in the usual organic
solvents being composed of a variety of organic
materials, including algae, pollen, wood, vitrinite,
and amorphous material. Over time and subjected
temperature and pressure kerogen converts to
hydrocarbons
---------------------- ----------------------------------------------------------
micrite a sedimentary rock formed of very fine grained
calcareous particles ranging in diameter from
0.06 to 2 mm, often referred to as lime mudstone
---------------------- ----------------------------------------------------------
missed oil pay Oil pay that has been identified by more sophisticated
analysis of the electric logs and was previously
overlooked
---------------------- ----------------------------------------------------------
mmbbls millions of barrels
---------------------- ----------------------------------------------------------
oil down to the deepest level where oil saturation is measured
at the base of a porous reservoir where it directly
overlies rock of very low porosity and permeability
where no reliable oil water contact can be established
---------------------- ----------------------------------------------------------
oil initially in the quantity of oil or petroleum that is estimated
place 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
---------------------- ----------------------------------------------------------
oil shows indications of the presence of oil within a
porous and permeable rock matrix
---------------------- ----------------------------------------------------------
oil water contact a bounding surface in a reservoir above which
predominantly oil occurs and below which predominantly
water occurs.
---------------------- ----------------------------------------------------------
P10 a 10% probability that a stated volume will
be equalled or exceeded
---------------------- ----------------------------------------------------------
P50 a 50% probability that a stated volume will
be equalled or exceeded
---------------------- ----------------------------------------------------------
P90 a 90% probability that a stated volume will
be equalled or exceeded
---------------------- ----------------------------------------------------------
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
---------------------- ----------------------------------------------------------
reservoir a subsurface rock formation containing an individual
natural accumulation of moveable petroleum that
is confined by impermeable rock/formations
---------------------- ----------------------------------------------------------
secondary porosity porosity that is created through dissolution
or other post-depositional mechanisms
---------------------- ----------------------------------------------------------
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
---------------------- ----------------------------------------------------------
spill point the structurally lowest point in a hydrocarbon
trap that can retain hydrocarbons, normally
coincides with a hydrocarbon water contact
---------------------- ----------------------------------------------------------
sweet spot the area within a shale source rock unit showing
highest TOC and generative potential normally
associated with basin centred deposition
---------------------- ----------------------------------------------------------
thermally mature a term applied to source rocks which 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
---------------------- ----------------------------------------------------------
TVDss true vertical depth below a subsea datum
---------------------- ----------------------------------------------------------
vitrinite reflectance a measure of the percentage of incident light
(Ro) reflected from the surface of vitrinite particles
in a sedimentary rock. It is referred to as
% Ro and is a measure of the thermal maturity
of a rock. Top of the oil window is dependent
on source rock type, but is widely recognized
to be at an Ro equivalent of between 0.5-0.7%
---------------------- ----------------------------------------------------------
VSP vertical seismic profile, recording of seismic
waves directly at the borehole to enable seismic
two way travel time reflectors to be accurately
correlated with formation depths encountered
by the well
---------------------- ----------------------------------------------------------
For further information:
Solo Oil plc
Neil Ritson +44 (0) 20 7440 0642
Beaumont Cornish Limited
Nominated Adviser and Joint
Broker
Roland Cornish +44 (0) 20 7628 3396
Old Park Lane Capital Plc
Joint Broker
Michael Parnes +44(0) 20 7493 8188
Shore Capital
Joint Broker
Pascal Keane +44 (0) 20 7408 4090
Jerry Keen (Corporate Broker)
Bell Pottinger
Public Relations
Henry Lerwill +44 (0) 20 3772 2500
This information is provided by RNS
The company news service from the London Stock Exchange
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