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
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