The Horse Hill partners, including Solo Oil PLC (LON:SOLO), have had their licence on the acreage extended for a further four years along with the rights to explore and develop a second area nearby.
The update from the partners also provided a timeline for testing the Horse Hill well in Surrey as well as setting out a detailed work programme.
The UK Oil & Gas Authority has granted rights over PEDL137 and PEDL246 out to September and June 2021 respectively. The former is the host to the Horse Hill well, which one of the most significant onshore finds of recent times.
The agreement with the OGA also maps out work programmes for the licences, referred to in the announcement as retention areas.
This includes production testing of the Portland horizon and Kimmeridge limestone; the latter is thought to be part of a thick oil-bearing layer that may span large tracts of the Weald Basin in the south of England.
There are also plans for two new wells - the HH-1z Kimmeridge and HH-2 Portland. Part of the programme will be 50 square kilometres of 3D seismic and 25 kilometres of 2D on nearby PEDL246 along with a step-out well on the acreage.
Positive development
"Extending the time we can retain the entirety of the licence areas by four years whilst we test and appraise the discoveries made by the Horse Hill-1 well is a positive development as it considerably increases our flexibility in completing the work programme,” said Solo’s Neil Ritson.
“Testing at Horse Hill will likely start in the second half of 2017 and is the next step in the evaluation process."
Solo owns 6.5% of the licences via its 10% ownership of the operator Horse Hill Developments.
Other investors include UK Oil & Gas Investments (LON:UKOG), Primorus Investments (LON:PRIM), Gunsynd (LON:GUN) and Alba Mineral Resources (LON:ALBA).
The Gusher
Known as the Gatwick Gusher because of its proximity to Britain’s second airport, the Horse Hill-1 well flowed 40-degree API oil at a natural flow rate of 1,365 barrels per day (bopd).
The overlying Portland flowed 35-37 API gravity crude at a stable pumped rate of 323 bopd.
An application for long-term production testing and further drilling has been submitted to Surrey County Council that will be decided at a planning committee meeting in July.
“Solo therefore envisages that these operations will commence in the second half of 2017 upon grant of the necessary remaining regulatory permissions,” the company said.