George Frangeskides, Alba Minerals Resources Plc’s (LON:ALBA) executive chairman, is looking forward to the rapid progression of the Horse Hill oil field into the development phase, and, subsequently into production.
Alba owns an 11.765% beneficial interest in the Horse Hill project, via a shareholding in the HHDL vehicle.
READ: UKOG declares Horse Hill’s Portland reservoir “commercially viable”
UK Oil & Gas Investments PLC (LON:UKOG), the largest London listed stakeholder in Horse Hill, today, declared Horse Hill’s conventional Portland oil reservoir as “commercially viable”.
At the same time, UKOG detailed the envisaged development which would comprise three production wells and two pressure support wells.
It would include the horizontal HH-2 well which is planned and permitted (planning and environmental consents are in place) for early 2019 following the completion of the HH-1 extended production testing programme – which is presently ongoing in the well’s deeper Kimmeridge zones.
It follows on from the successful extended test of the conventional Portland reservoir, which exceeded expectations with a calculated vertical well production rate of 362 barrels of oil per day.
The proposed HH-2 well will have a targeted production rate of 720 to 1,080 bopd from the Portland.
Consultant Xodus has modelled the Portland’s production profile and claims that up to 45% of the Portland reservoir’s oil-in-place could be recovered if certain pressure support measures are put in place.
It is envisaged that long-term production operations could begin during 2019. The development – of the Portland and Kimmeridge zones - will require additional planning permission. UKOG said the application is nearing completion, and, submission is anticipated before the end of 2018.
UKOG eyes Horse Hill ‘transformation’
UKOG holds an indirect 46.735% beneficial interest in Horse Hill, via its shareholding in the HHDL vehicle which in turn owns 65% of the asset.
"HHDL's declaration of Portland commercial viability is a significant milestone for the Company,” said UKOG chief executive Stephen Sanderson.
“It transforms Horse Hill from solely exploration into a fully-fledged field development with a full-scale oil production start-up targeted in 2019.”
He added: “The better than expected EWT results have robustly demonstrated that the Portland has significant daily production potential in its own right, which could see the first planned horizontal producer attain sustained oil rates of 720-1,080 bopd.
“If realised, these rates could make the Horse Hill Portland oil field one of the UK onshore's top producers.”
Kimmeridge testing continues
Sanderson also highlighted that the Portland conventional oil field project could be combined with the development of the deeper, unconventional Kimmeridge zones – which are presently on the extended test.
Latest results, released earlier this week, exceeded those seen in the previous tests back in 2016.
The first Kimmeridge test has seen oil flow continuously and naturally from the KL3 zone to surface.
Test flows measured production rates between 563 and 771 barrels of oil per day, before further testing programme resumed with pressure build up, clean-up, flow stabilization, oil sampling.
After that, the programme moves on to test production from the KL4 zone where, in 2016, a rate equivalent to 901 bopd was measured over a four hour period.