TIDMUKOG
RNS Number : 6284D
UK Oil & Gas PLC
10 October 2018
UK Oil & Gas PLC
("UKOG" or the "Company")
Extended Well Test ("EWT") Update: Kimmeridge oil flows
continuously to surface
Horse Hill-1 ("HH-1") Portland and Kimmeridge Oil Discovery,
Weald Basin, UK
UK Oil & Gas PLC (London AIM: UKOG) announces that Horse
Hill Developments Ltd ("HHDL"), a UKOG subsidiary company and the
operator of the HH-1 Kimmeridge Limestone and conventional Portland
Sandstone oil discovery, has informed the Company that the
Kimmeridge Limestone 3 ("KL3") EWT programme has recorded sustained
light, sweet, 40-41deg API crude oil flow continuously and
naturally to surface over the past 50 hours at sustained rates
significantly exceeding those recorded during the KL3 short flow
test programme in 2016. HH-1 is located in licence PEDL137 in which
UKOG holds a 46.735% beneficial interest. Key EWT results to date
are summarised below:
Key Points:
-- KL3 EWT flow sequence commenced ahead of planned KL4 test.
-- KL3 flowed 40-41deg API continuously and naturally to surface
(i.e. without any pump) over a 50 hour initial planned oil flow
period. Oil flow initiated instantaneously with minimal pressure
"draw-down". First planned 24-hour shut-in and pressure build-up
test ("PBU") now underway.
-- Sustained continuous oil rates of between 563 and 771 barrels
of oil per day ("bopd") on 36/64 and 38/64 inch choke,
respectively, recorded over last 24 hours through test separator.
Gas rates up to 186,000 cu ft per day measured through enclosed
flare. Flow sustained at constant stable bottom hole pressure.
-- Recorded sustained rates significantly exceed the 464 bopd
over a short 7.5-hour total flow period reported in 2016.
-- Initial well productivity index of between 1.4 to 2.5 bpd/psi
is around twice that seen in 2016 KL3 test.
-- To date four tankers of KL3 crude have been exported to Fawley refinery.
-- Zero formation water produced. Metered associated water rates
of 52 barrels per day ("bpd") decreasing to 14 bpd (i.e. 9%
decreasing to 2%) in the past 24 hours. Produced water consists
wholly of returned heavy completion brine. Well continues to
"clean-up" with decreasing water content.
-- Simultaneous pressure data recorded in overlying KL4 is
indicative that KL3 and KL4 are one single connected oil pool with
an implied minimum vertical extent of 358 ft.
-- Further updates to be provided in due course following
completion of the ongoing PBU test, further well clean-up, flow
stabilisation, downhole oil sampling and further pressure build up
tests.
-- The KL4, which flowed at a reported rate of 901 bopd over a
4-hour period in 2016, will be flow tested after completion of the
current KL3 EWT.
Stephen Sanderson, UKOG's Chief Executive, commented:
"I am delighted to have witnessed first-hand the resumption of
significant continuous and sustained oil flow from the Kimmeridge
at Horse Hill. Whilst it has been a long wait since the successful
2016 flow tests, it has been made more momentous by the
Kimmeridge's significantly increased performance and
productivity.
Whilst these are early days in the planned KL3 EWT sequence,
with the well still "cleaning-up", the continuous and sustained
high oil rates can only be seen as highly encouraging for the
overall EWT objective of establishing the commerciality of the
Kimmeridge. The Directors consider that these positive KL3 test
results now make it increasingly likely that both the Kimmeridge
and Portland oil pools are set to make Horse Hill one of the UK's
leading onshore producing oil fields. Permanent production at Horse
Hill is targeted in 2019. I look forward to the continuing news
flow from the remainder of the KL3 test and the final KL4 EWT."
Qualified Person's Statement
Matt Cartwright, UKOG's Chief Operating Officer, who has over 35
years of relevant experience in the oil industry, has approved the
information contained in this announcement. Mr Cartwright is a
Chartered Engineer and member of the Society of Petroleum
Engineers.
For further information, please contact:
UK Oil & Gas PLC
Stephen Sanderson / Kiran Morzaria Tel: 01483 243450
WH Ireland (Nominated Adviser and Broker)
James Joyce / James Sinclair-Ford Tel: 020 7220 1666
Cenkos Securities PLC (Joint Broker)
Joe Nally / Neil McDonald Tel: 0207 397 8919
Novum Securities (Joint Broker)
John Bellis Tel: 020 7399 9400
Public Relations
Brian Alexander / David Bick Tel: 01483 243450
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
draw down the difference between the average static reservoir
pressure and the flowing bottomhole pressure
---------------------------------------------------------
extended well a flow test or well test, as per the permission
test granted by the Oil and Gas Authority, with an
aggregate flow period duration over all zones
of greater than 96 hours and up to 90 days maximum
---------------------------------------------------------
flow test a flow test or well test involves testing a well
by flowing hydrocarbons to surface, typically
through a test separator. Key measured parameters
are oil and gas flow rates, downhole pressure
and surface pressure. The overall objective is
to identify the well's capacity to produce hydrocarbons
at a commercial flow rate
---------------------------------------------------------
Productivity A mathematical means of expressing the ability
Index of a reservoir to deliver fluids to the wellbore.
The PI is usually stated as the volume delivered
per psi of drawdown at the sandface (bbl/d/psi).
---------------------------------------------------------
UKOG Licence Interests
The Company has interests in the following UK licences:
Asset Licence UKOG Licence Operator Area Status
Interest Holder (km(2)
)
Avington UKOG (GB) IGas Energy Field currently
(1) PEDL070 5% Limited Plc 18.3 shut in
----------------- ---------- -------------- ------------------ -------- ----------------------
Broadford BB-1 & 1z oil
Bridge UKOG (234) UKOG (234) discovery, planning
(4) PEDL234 100% Ltd (4) Ltd (4) 300.0 application approved
----------------- ---------- -------------- ------------------ -------- ----------------------
Seeking alternate
Europa Oil sites to drill
Holmwood & Gas (Holdings) Holmwood and other
(3) PEDL143 40% UKOG plc 91.8 Kimmeridge prospects
----------------- ---------- -------------- ------------------ -------- ----------------------
Horndean UKOG (GB) IGas Energy Field in stable
(1) PL211 10% Limited Plc 27.3 production
----------------- ---------- -------------- ------------------ -------- ----------------------
Production tests
ongoing, 2 further
Horse Hill Horse Hill appraisal wells
Horse Hill Developments Developments scheduled for
(5) PEDL137 46.735% Ltd Ltd 99.3 2018/19
----------------- ---------- -------------- ------------------ -------- ----------------------
Horse Hill Horse Hill
Horse Hill Developments Developments
(5) PEDL246 46.735% Ltd Ltd 43.6 As above
----------------- ---------- -------------- ------------------ -------- ----------------------
Preparing planning
submission for
Arreton-3 oil
Isle of appraisal well
Wight (Onshore) and Arreton South
(2, 3) PEDL331 65% UKOG UKOG 200.0 exploration well
----------------- ---------- -------------- ------------------ -------- ----------------------
Revised drilling
Markwells UKOG (GB) UKOG (GB) and testing planning
Wood (2) PEDL126 100% Limited Limited 11.2 application underway
----------------- ---------- -------------- ------------------ -------- ----------------------
Notes:
1. Oil field currently in production.
2. Oil discovery pending development and/or appraisal
drilling.
3. Exploration asset with drillable prospects and leads. PEDL234
contains the Broadford Bridge-1 and 1z
oil discovery well, the extension of the Godley Bridge Portland
gas discovery plus further exploration
prospects.
4. UKOG has a 100% interest in UKOG (234) Ltd, which has a 100%
interest in PEDL234.
5. Oil discovery in 3 zones, EWT ongoing, two further wells
HH-1z and HH-2 planned in early 2019
6. UKOG has a direct 71.9% 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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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