logo-loader
RNS
viewUK Oil & Gas PLC

UK Oil & Gas Inv PLC - Operational Update

RNS Number : 7291T
UK Oil & Gas Investments PLC
16 October 2017
 

UK Oil & Gas Investments PLC

("UKOG" or the "Company")

 

Operational Update

Oil & Gas Continues to Flow to Surface,

Broadford Bridge-1z Kimmeridge Limestone Oil Discovery, PEDL234, Weald Basin, UK

 

Highlights

·      Broadford Bridge-1z ("BB-1z") continues to flow light sweet oil and gas from the Kimmeridge Limestones.

·      Flow continues to clean up, demonstrating an increasing oil cut, together with sustained periods of associated gas flaring. The shrouded flare stack has been in daily operation, exhibiting a clean burn.

·      Flowing Kimmeridge light oil and associated gas at both BB1-z and Horse Hill-1 ("HH-1") proves Kimmeridge contains a thick regionally extensive continuous oil accumulation.

·      Optimised sequential flow testing of multiple 30-100ft zones planned to commence by end October 2017.

 

UK Oil & Gas Investments PLC (London AIM: UKOG) is pleased to announce that light, sweet crude oil and hydrocarbon gas continues to flow from the Kimmeridge Limestones at its 100% owned Broadford Bridge-1z ("BB-1z") exploration discovery, located in licence PEDL234. BB-1z flow continues to clean up, demonstrating an increasing oil cut, together with sustained periods of associated gas flaring. The shrouded flare stack has been in daily operation, exhibiting a clean burn of methane and wet gases delivered from the test separator. Oil samples have been dispatched for crude assay and for specialised geochemical analysis in the UK and USA. Flow testing continues.

 

As previously reported, BB-1z was deliberately drilled in a location where no conventional hydrocarbon trapping mechanism within the Kimmeridge reservoir section is evident. Therefore, in the Company's opinion, the presence of flowing, light Kimmeridge oil and associated solution gas at BB-1z provides proof that the Kimmeridge at BB-1z contains a significant continuous oil deposit of around 1400 ft gross vertical thickness.

 

The near identical Kimmeridge reservoir parameters and geology seen at BB-1z and the Horse Hill-1 ("HH-1") Kimmeridge oil discovery, in which the Company holds a 32.435% interest, some 27 km to the northeast, demonstrates that the Kimmeridge oil accumulation is also laterally extensive across the Central Weald Basin.

 

UKOG, as the largest licence holder in the Kimmeridge oil accumulation's prospective area is well positioned to exploit this extensive oil resource.

 

The Company will now press on immediately with the revised rig-less test plan to establish whether the extensive connected natural fracturing seen in BB-1 and BB-1z can flow oil in commercial rates and volumes.

 

Forward Operations

 

Upon delivery of further testing equipment, scheduled for the end of this week, the current completion assembly will be removed and, as previously announced, a more finely focussed and optimal test plan implemented. The planned programme is as follows:

 

·     Firstly, proceed ahead to isolate, acid-wash and sequentially flow test multiple 30-100 ft existing perforated zones in the naturally-fractured KL1-KL4, and then;

·     Perforate further naturally-fractured limestone reservoir zones in the KL1, KL2 and KL3, isolate, acid-wash and sequentially flow test multiple 30-100 ft zones, and finally;

·     Conduct a short cement squeeze in a section of the KL4/KL5, run a new cement bond log, re-perforate the newly cemented section, isolate, acid wash, and sequentially flow test multiple 30-50 ft zones.

·     Flow will be initiated throughout the programme via the use of nitrogen-lift (without coil tubing), swabbing and/or pumping via the existing high-capacity linear rod pump

 

Testing is planned to continue until mid-December 2017.

 

Stephen Sanderson, UKOG's Executive Chairman, commented:

 

"In the Company's view, the volume and nature of the oil and gas recovered to date from the Kimmeridge proves that BB-1z contains a continuous oil accumulation some 1400 ft thick. The near identical reservoir characteristics seen at both BB-1z and HH-1, some 27 km apart, show this accumulation is laterally extensive over much of the Weald Basin. UKOG as the largest licence holder in the basin is in a prime position to exploit this resource.

 

This proof of geological and scientific concept is a major achievement and has significant positive implications for the prospectivity of PEDL234 and our extensive licence holdings in the Weald. Our focus now moves to delivering further proof that BB-1z can deliver both commercially viable rates and volumes of oil to surface.

 

The test results to date are technically significant and highly encouraging and I am confident that the more finely focussed and optimised testing plan can establish commercial viability."

 

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

 

Glossary

 

casing

heavy-gauge steel pipe that is lowered into position in the open hole of a well and cemented into place. Casing is run to isolate rock formations with different pressure gradients from the well bore and to ensure that any fluids within the well are isolated from the surrounding rock and surface groundwater zone

cement

high grade impermeable Portland cement or concrete used to fill the space or annulus between the well's steel casing and surrounding rock formation. The cement bonds to both the steel casing and surrounding rock to form an impermeable pressure seal.

cement-squeeze

a remedial workover process whereby cement slurry is pumped into the well's annulus to fill uncemented areas or zones where cement bond is deemed to be inadequate

completion (assembly)

a generic term used to describe the assembly of downhole steel production tubing and equipment that allows safe and efficient production from an oil or gas well

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

flow test

a test period where hydrocarbons are flowed to surface 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 oil at a commercial flow rate and to recover oil in commercial quantities or volumes

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, being made of the remains of calcareous planktonic algae called coccoliths. The Kimmeridge Limestones are comprised of fine grained coccoliths, fine grained calcium carbonate mud, clay minerals, together with dark grey organic matter

solution gas

or associated gas, is gas generated by the process of transforming organic matter into oil that remains in solution within the oil reservoir under reservoir conditions

wet gas

associated gas derived during the generation of oil in the subsurface that contains methane, ethane, butane, propane and pentane. Wet gas shows were also encountered whilst drilling the Kimmeridge at BB-1z, HH-1 and most of the legacy wells drilled in the central Weald area

 

UKOG Licence Interests

 

The Company has interests in the following ten UK licences:

Asset

Licence

UKOG's Interest

Licence Holder

Operator

Area (km2)

Status

Avington 1

PEDL070

5%

UKOG (GB) Limited

IGas Energy Plc

18.3

Field in stable production

Baxters Copse 2

PEDL233

50%

UKOG Weald Limited

IGas Energy Plc

89.6

Appraisal/development well planned; licence extended to 2018

Broadford Bridge 3

PEDL234

100%

Kimmeridge Oil & Gas Limited 4

Kimmeridge Oil & Gas Limited 4

300.0

BB-1&1z drilling completed, testing underway

Holmwood 3

PEDL143

40%

UKOG

Europa Oil & Gas (Holdings) plc

91.8

Holmwood-1 exploration well planned in 2017

Horndean 1

PL211

10%

UKOG (GB) Limited

IGas Energy Plc

27.3

Field in stable production

Horse Hill 5

PEDL137

32.435%

Horse Hill Developments Ltd 

Horse Hill Developments Ltd 

99.3

Submitted planning application for long term production tests and drilling of two wells

Horse Hill 5

PEDL246

32.435%

Horse Hill Developments Ltd

Horse Hill Developments Ltd 

43.6

As above

Isle of Wight (Offshore) 3

P1916

100%

UKOG Solent Limited

UKOG Solent Limited

46.7

Preparing drilling planning submission

Isle of Wight (Onshore) 2, 3

PEDL331

65%

UKOG

TBA

200.0

Preparing drilling planning submission

Markwells Wood 2

PEDL126

100%

UKOG (GB) Limited

UKOG (GB) Limited

11.2

Submitted planning 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 Broadford Bridge-1 and 1z discovery well and the extension of the Godley Bridge Portland gas discovery.

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 49.9% 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 company news service from the London Stock Exchange
 
END
 
 
UPDGGGMUUUPMGCQ

Quick facts: UK Oil & Gas PLC

Price: 0.245

Market: AIM
Market Cap: £21.18 m
Follow

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE