TIDMSOLO
RNS Number : 6727J
Solo Oil Plc
09 April 2015
FOR IMMEDIATE RELEASE, 7 am 9 April 2015
SOLO OIL PLC
("Solo" or the "Company")
Significant upgrade to the Horse Hill discovery, Weald Basin
Solo is pleased to announce that its technical alliance partner
in the Horse Hill discovery in the UK Weald Basin, UK Oil and Gas
Investments plc ("UKOG"), has released a significant further update
based on the technical work being conducted by UKOG on behalf of
Horse Hill Developments Limited ("HHDL") in alliance with Solo and
NUTECH Ltd ("Nutech").
UKOG has announced that it has discovered a potentially
significant Jurassic petroleum resource in the UK's onshore Weald
Basin within the Horse Hill Licences. This is in addition to the
previously reported Upper Portland oil discovery in which the Solo
has a 6.5% interest.
US-based Nutech, one of the world's leading companies in
petrophysical analysis and reservoir intelligence, estimate that
the Horse Hill-1 ("HH-1") well indicates a total oil in place
("OIP") of 158 million barrels of oil ("mmbo") per square mile,
excluding the previously reported Upper Portland Sandstone oil
discovery.
Nutech's report states that this OIP lies within a 653 feet
aggregate net pay section, primarily within three argillaceous
limestones and interbedded mudstones of the Kimmeridge, and
additionally in the mudstones of the Oxford and Lias sections.
Approximately 72% of the 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
below.
In order to establish estimates of total OIP within the 55
square mile licence area further analysis work is ongoing under the
contracted alliance between Nutech, UKOG and Solo. 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.
Neil Ritson, Solo's Chairman, commented:
"Following the drilling of the deepest well in the Weald Basin
for over 30 years and using up to date techniques that have been
developed in recent years a hybrid play involving thermally mature
Kimmeridge source rocks and porous limestones has emerged that may
have very major significance for the Basin and for Solo's interest.
We look forward to further analysis as it is completed."
Solo's interest in Horse Hill:
Solo owns a 10% interest in HHDL, a special purpose company
which owns a 65% participating interest and 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.
For further information:
Solo Oil plc
Neil Ritson
Fergus Jenkins +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
Charles Laughton
Zoe Alexander
Shore Capital
Joint Broker
Pascal Keane
Jerry Keen (Corporate Broker)
Bell Pottinger +44(0) 20 7493 8188
Public Relations +44 (0) 20 7408 4090
Henry Lerwill +44 (0) 20 3772 2500
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
----------------- -----------------------------------------------------
mmbo million barrels of oil
----------------- -----------------------------------------------------
oil in place the quantity of oil or petroleum that is estimated
to exist originally in naturally occurring
accumulations before any extraction or production
----------------- -----------------------------------------------------
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.
----------------- -----------------------------------------------------
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
----------------- -----------------------------------------------------
thermally mature a term applied to source rocks which have
received sufficient temperature and pressure
over geological time to generate hydrocarbons
----------------- -----------------------------------------------------
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:
SECTION DEPTH FT DEPTH FT GROSS FT PAY FT OIP
MMBO/Sq.
TOP BASE MD MD 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. Bazhenov
(Weald Basin) Forks Springs Russia- W.
Basin Names Siberia
------------------ --------------- ----------------- -------------- -----------------
Geological U. Jurassic Devonian Permian U. Jurassic
Era & Carboniferous
Reservoir Age 145-157 MMybp 320-380 MMybp 260-300 MMybp 140-152 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 proportion
limestone 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 space
(PHIE) 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 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
------------------- -----------------------------------------------------
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 is
(OIP) 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 have
(R(o) ) 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 space.
(S(w) ) It is expressed in volume/volume, percent
or saturation units.
------------------- -----------------------------------------------------
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