--UPDATE, ADDS SHARE PRICE DETAILS--
Horse Hill shares were off to the races on Tuesday Morning after the latest flow test results from the so-called Gatwick Gusher oil project impressed.
UK Oil & Gas shares, after just over an hour of trading in London, rose about 30% and set a new high for the year at 3.34p, while fellow Horse Hill stakeholders Solo Oil (LON:SOLO), Alba Minerals (LON:ALBA) and Evocutis (LON:EVO) also rallied strongly.
It was revealed this morning that Horse Hill’s Upper Kimmeridge zone, the second of three zones to be tested, has flowed oil to surface at a rate in excess of 900 barrels per day.
Added to last week’s result, which showed rates above 450 bopd from the Lower Kimmeridge zone, the well has so far seen aggregate rates in excess of 1,360 bopd.
A further test of the Upper Kimmeridge is currently ongoing, and a further update is expected once the new data is available.
Stephen Sanderson, chief executive of UK Oil & Gas Investment (LON:UKOG), a 20% stakeholder in the project, has described the flow test results as an “unequivocal proof of concept” for the Kimmeridge limestone oil play.
“The two Kimmeridge flow tests have not only shown that moveable oil exists within the Kimmeridge, but more importantly, that it can be extracted at commercial rates even from vertical wells without significant stimulation,” he said in a statement.
“This result is therefore very significant for the company and the Weald Basin of the UK.”
Sanderson added that the aggregate rate looks to be one of the highest natural flow rates recorded in a UK onshore wildcat well since the Wytch Farm discovery in the 1970s, and future work could potentially enhance the rates further.
“It should be noted that the planned use of horizontal appraisal and development wells may further significantly enhance production flow rates seen to date,” Sanderson said.
He highlighted also that, following the completion of the final test on the separate Portland zone, the plan would be to “move full speed ahead” into the development of Horse Hill - the next stage of which would see a horizontal well drilled, with a longer term production test.
Solo Oil chairman Neil Ritson, in a separate statement, said: “The results obtained to date are truly ground breaking and move the Kimmeridge limestone play in the Weald Basin firmly in the direction of commercial production."
Solo owns a 6.5% interest in the Horse Hill project.
The investments are made into the Horse Hill Developments Ltd (HHDL) vehicle which has a 65% interest in the project which is located about 5 miles from Gatwick airport.