United Oil & Gas Plc (LON:UOG) has revealed that the planned Colter appraisal well on the south coast of England has passed an important administrative milestone and remains on-track for drilling in the fourth quarter of this year.
The explorer noted that an ‘authorisation for expenditure’ has now been signed, ascribing a £7.5mln total cost for the well – which would equate to just over £1mln of costs to United.
Colter was first discovered in 1986 within the same play as Wytch Farm, the UK’s largest onshore oil operation producing some 450mln barrels of crude to date, and, whilst the original Colter well was seen to be exposed to only 4mln barrels of resources the whole feature is believed to be larger.
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It is estimated that Colter may host a possible 15mln barrels of prospective resources (a mid-case estimate). The planned appraisal well is guided by modern 3D seismic data analysis and it aims to confirm the discovery in an ‘up-dip’ location.
Brian Larkin, UOG chief executive, said: “Colter has an excellent address, being located close to Europe's largest onshore oil field; is targeting a historic discovery that has significant upside and has good access to infrastructure.
“Colter may be a low-risk appraisal play but with independently assigned contingent resources of 4mln barrels and additional gross prospective resources of 15mln barrels, it has the potential to generate a high reward for United shareholders.
“I look forward to providing further updates on activity not only at Colter but across our portfolio of near-term, low-risk development opportunities in Europe and higher-risk, high-impact exploration in Jamaica, during what promises to be an exciting period for United."
UOG has a 10% interest in the project, acquired via a farm-in deal that committed it to pay 13.33% of costs associated to the Colter well.
Colter is operated by Corallian Energy Ltd which owns a 45% stake alongside fellow exploration partners Corfe Energy with 40% and Baron Oil Plc (LON:BOIL) which has 5%.