TIDMUKOG
RNS Number : 6560L
UK Oil & Gas Investments PLC
20 July 2017
20 July 2017
UK Oil & Gas Investments PLC
("UKOG" or the "Company")
Further Kimmeridge Oil Reservoir Zone Identified,
Broadford Bridge-1 Exploration Well, Weald Basin, UK
Highlights
-- Preliminary image log interpretations reveal a further,
highly naturally-fractured Kimmeridge shale and limestone reservoir
zone, designated "KL0", from 5,508-5,640 ft measured depth ("MD").
Fractures on image logs coincide with lost circulation zones, oil
in mud and wet gas shows.
-- Gross possible Kimmeridge fractured oil-bearing zone
increased by 132 ft to 1,622 ft MD, a true vertical section of
around 1,200 ft; spans five entire naturally fractured Kimmeridge
Limestone and shale zones (KL0-KL4) from 4,018-5,640 ft MD. Zone
may extend further upwards into fractured zones above 3,800 ft
MD.
-- Schlumberger electric logging and fracture imaging completed,
cement plug in deeper Corallian sandstone set and 7-inch steel
casing currently being run in the hole. Flow testing of multiple
zones over an aggregate 900 ft total perforated section to commence
following setting of remaining 7-inch steel casing to TD and well
completion.
UK Oil & Gas Investments PLC (London AIM and ISDX: UKOG)
announces that third party specialists at P-Ten (UK), and Premier
Oilfield Laboratories ("POL"), USA, have examined image logs and 13
cores from its 100% owned Broadford Bridge-1 ("BB-1") exploration
well located in licence PEDL234. They report extensive natural
fracturing throughout the entire Kimmeridge section, including a
previously unidentified potential oil bearing fracture-zone below
the lowest Kimmeridge Limestone, KL1. This new reservoir zone,
designated as KL0, is intensely fractured and spans the interval
5,508-5,640 ft MD. These results accord with drilling data,
observed oil and wet gas shows and extend the gross possible
vertical thickness of the Kimmeridge Continuous Oil Deposit to
around 1,200 ft. Further fractured zones were recorded on image
logs above KL4 between 3,800-4,018 ft MD.
The Company is currently mobilising equipment to perforate and
flow test a total combined 900 ft of the Kimmeridge section,
beginning with the deepest reservoir zones. Permissions from the
Oil and Gas Authority, Environmental Authority and West Sussex
County Council are in place, final consent from the Health and
Safety Executive is expected in due course.
The flow test programme is specifically designed to gather
further supportive evidence that the Kimmeridge contains a
Continuous Oil Deposit containing mobile light oil and which can
flow to surface at commercial rates and in commercial volumes.
Further updates on flow testing, set to commence following
completion of 7-inch casing and well completion, will be provided
in due course.
Schlumberger's comprehensive electric logging and
fracture-imaging programme has now been successfully executed. This
includes the first use in the Weald and Kimmeridge section of
Schlumberger's Lithoscanner tool, used for elemental and total
organic carbon analysis in shales and limestones.
Detailed log interpretations, calibrated to the 554 ft of BB-1
core data, are ongoing at COREX in Aberdeen, and at POL and Nutech
in Houston, Texas. Further log interpretation updates and results
will be announced in due course.
About BB-1
BB-1, an exploration step-out, is located south of
Billingshurst, West Sussex, within the 300 km(2) PEDL234 licence,
in which the Company has a 100% interest via its ownership of the
licence's operator, Kimmeridge Oil & Gas Limited ("KOGL").
As previously reported, in the Company's opinion, the multiple
positive indications of mobile light oil observed throughout the
entire naturally fractured Kimmeridge KL0-KL4 limestone and shale
target section is supportive that a significant Continuous Oil
Deposit, with a vertical extent of around 1,200 feet has been
demonstrated at BB-1. The uppermost two units of this zone, KL4 and
KL3, flowed oil at a stable aggregate rate of 1,365 barrels per day
in the HH-1 discovery near Gatwick Airport in 2016.
This Continuous Oil Deposit therefore likely underlies the
entire PEDL234 licence and a significant area of the wider Weald
Basin, including the Horse Hill-1 Kimmeridge oil discovery some 27
km to the north east. The Company has the largest licence holding
in the Weald Basin and within the prospective area of the
Kimmeridge play.
Stephen Sanderson, UKOG's Executive Chairman, commented:
"BB-1, UKOG's new flagship asset, continues to provide a stream
of data and ground-breaking technical insights into what we believe
is a new and potentially highly significant oil resource. This
comprehensive and extensive data set is a sound investment into the
future of BB-1 and our corporate goal to establish first Kimmeridge
production by the end of 2018/early 2019.
With the technical data from drilling, core and logs continuing
to provide mutually supportive evidence of "proof of geological
concept", we will now move on very shortly, via a comprehensive
extended flow testing programme, to test the concept that oil can
flow to surface from the KL0-KL4 at commercial rates and volumes,
the litmus test for any oil company.
Whilst there is always uncertainty in any new well and testing
outcome, the technical results from BB-1 to date continue to remain
both positive and most encouraging."
Qualified Person's Statement
Stephen Sanderson, UKOG's Executive Chairman, who has over 35
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.
For further information, please contact:
UK Oil & Gas Investments PLC
Stephen Sanderson / Kiran Morzaria Tel: 01483 243450
WH Ireland (Nominated Adviser and Broker)
James Joyce / James Bavister Tel: 020 7220 1666
Cenkos Securities PLC (Joint Broker)
Nick Tulloch / Neil McDonald Tel: 0131 220 6939
Square 1 Consulting (Public Relations)
Brian Alexander / David Bick Tel: 01483 243450 / 020 7929
5599
Glossary:
casing heavy gauge steel tubing designed to line
the wall of a well. The casing provides a
safe controlled space in which the drill pipe
and bit can operate in isolation from conditions
in overlying rock units. The steel tubing
is bonded to the surrounding rock by impermeable
concrete, known as "cement"
--------------------- --------------------------------------------------------
core or coring a drilling technique that involves using a
doughnut-shaped drilling bit to capture or
"cut" a continuous cylinder-shaped core of
undamaged in-situ rock. The core is captured
in a steel pipe or "core barrel" above the
bit. Core is normally cut in 30 feet lengths,
or multiples of 30 feet, and normally with
a diameter of 3.5 or 4 inches. Core is taken
in petroleum reservoir rocks for detailed
laboratory analyses of petrophysical and geomechanical
parameters
--------------------- --------------------------------------------------------
continuous oil a petroleum accumulation that is pervasive
deposit or resource throughout a large area, which is not significantly
deposit affected by hydrodynamic influences (i.e.
the buoyancy of oil in water) and is not trapped
by structural or stratigraphic geological
conditions. The deposit, in contrast to conventional
accumulations, has therefore not accumulated
by the migration of petroleum over medium
to long distances. The petroleum in such deposits
is found within, or immediately adjacent or
close to, the pore spaces where the petroleum
is generated, i.e. those pore spaces lying
within petroleum source rocks containing organic
rich compounds (kerogen) that, when heated
over geological time, transform into petroleum.
These accumulations are generally associated
with organic-rich shales such as the Kimmeridge
Clay Formation. Such accumulations do not
generally contain significant volumes of free,
mobile formation water and therefore have
no observable hydrocarbon-water contacts.
The extent of the accumulation is generally
defined by the limit of where burial depths
have been sufficient to transform organic
matter within the petroleum source rock unit
into petroleum.
--------------------- --------------------------------------------------------
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 which measure the electrical properties
of the rock and fluids in and surrounding
the wellbore to determine the petrophysical
and geological properties of the rock in its
in-situ state. The logging equipment is lowered
into the borehole on a steel cable through
which a wire conveys data to be recorded at
surface. The logging at BB-1 also includes
tools which record 3-dimensional images and
ultrasound scans of the rock designed to map
and characterise natural fractures, know as
" image logs"
--------------------- --------------------------------------------------------
limestone a sedimentary rock predominantly composed
of calcite (a crystalline mineral form of
calcium carbonate) 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
--------------------- --------------------------------------------------------
lost circulation a zone of highly porous and permeable rock
zone (LCZ) or voids directly intersecting the wellbore
into which drilling fluid can escape. Commonly
LCZs occur in extensive open fracture networks,
voids or vugs within limestones and highly
porous and permeable sandstones
--------------------- --------------------------------------------------------
naturally fractured a fractured reservoir contains open and usually
reservoir connected cracks or fissures within the rock
matrix; fractures can enhance permeability
of rocks greatly by connecting pore-spaces
together; naturally fractured reservoirs have
been created over geological time by nature,
not man-made via hydraulic fracturing
--------------------- --------------------------------------------------------
shale a fissile rock that is formed by the consolidation
of clay, mud, or silt particles, and that
has a finely stratified or laminated structure.
Certain shales, such as those of the Kimmeridge
Clay, often contain a significant proportion
of organic material, which when subject to
increasing temperature and pressure over geological
time transform into petroleum (known as petroleum
"source rocks")
--------------------- --------------------------------------------------------
step-out well a well specifically designed to determine
the lateral extent of a discovered hydrocarbon
accumulation or play
--------------------- --------------------------------------------------------
wet gas natural gas, predominantly consisting of methane
(C1), ethane (C2) and propane (C3) but also
containing the longer molecular chain natural
gases butane and iso-butane (C4), pentane
and iso-pentane (C5). The C4 and C5 gases
are created during oil-generation within a
petroleum source rock unit when oil is thermally
cracked. At Horse Hill these natural gases
lie in solution within the oil in the KL3
and KL4 Kimmeridge Limestone reservoirs (i.e.
solution or associated gas and not as a separate
free-gas phase).
--------------------- --------------------------------------------------------
UKOG Licence Interests
The Company has interests in the following ten UK licences:
Asset Licence UKOG's Licence Holder Operator Area (km(2) ) Status
Interest
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
UKOG (GB) IGas Energy Field in stable
Avington (1) PEDL070 5% Limited Plc 18.3 production
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Baxters Copse PEDL233 50% UKOG Weald IGas Energy 89.6 Appraisal/development
(2) Limited Plc well planned; licence
extended to 2018
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Kimmeridge Oil Kimmeridge Oil
Broadford Bridge & Gas Limited & Gas Limited BB-1 drilling
(3) PEDL234 100% (4) (4) 300.0 underway
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Holmwood (3) PEDL143 30% UKOG Europa Oil & 91.8 Holmwood-1
Gas (Holdings) exploration well
plc planned in 2017
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
UKOG (GB) IGas Energy Field in stable
Horndean (1) PL211 10% Limited Plc 27.3 production
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Horse Hill (5) PEDL137 32.435% Horse Hill Horse Hill 99.3 Submitted planning
Developments Developments application for long
Ltd Ltd term production tests
and drilling of two
wells
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Horse Hill Horse Hill
Developments Developments
Horse Hill (5) PEDL246 32.435% Ltd Ltd 43.6 As above
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Isle of Wight UKOG Solent UKOG Solent Preparing drilling
(Offshore) (3) P1916 100% Limited Limited 46.7 planning submission
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Isle of Wight
(Onshore) (2, Preparing drilling
3) PEDL331 65% UKOG TBA 200.0 planning submission
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Markwells Wood PEDL126 100% UKOG (GB) UKOG (GB) 11.2 Submitted planning
(2) Limited Limited application for
appraisal and field
development
---------------- --------- --------------- --------------- --------------- -------------- ----------------------
Notes:
1. Oil field currently in production.
2. Oil discovery pending development and/or appraisal
drilling.
3. Exploration asset with drillable prospects and leads.
Contains the extension of the Godley Bridge Portland gas discovery
and the site of the forthcoming Broadford Bridge-1 well.
4. UKOG has a 100% interest in Kimmeridge Oil & Gas Limited,
which has a 100% interest in PEDL234.
5. Oil discovery with recently completed flow testing.
6. UKOG has a direct 48% interest in HHDL, which has a 65%
interest in PEDL137 and PEDL246.
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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