UK Oil & Gas Investments, (LON:UKOG) the firm operating the so-called ‘Gatwick Gusher’ at Horse Hill, has reported a more modest oil deposit at Markwells Wood down the road.
A report by consultant Xodus suggested Markwells Wood potentially has a recoverable contingent resource of 1.25mln barrels (MMbbl) net.
UKOG sparked a furore earlier in the year when it said the Weald Basin in Sussex might contain 100bn barrels of oil after it drilled one well at Horse Hill and grossed it up.
The estimate for Horse Hill itself was 9-10bn barrels.
Markwells Wood, in licence PEDL126 to the west of the Weald Basin, is a few miles northeast of Portsmouth and 60km southeast of Horse Hill.
The competent person's report indicated Markwells Wood would be commercial and assumed a phased development commencing with the drilling of a horizontal sidetrack well, designated MW-1.
Xodus' reservoir simulation showed well performance is similar to the producing wells at the nearby Horndean field.
The CPR’s best case had a recoverable volume of approximately 400,000 barrels of oil after 20 years and 600,000 barrels after 40 years.
WH Ireland added 0.45p share to its net asset value estimate on the back of the CPR and raised its share price target by 10% to 5p.
‘Buy’ remains its investment view on the shares, which fell 3.5% to 1.74p.