UK Oil & Gas PLC (LON:UKOG) has again increased its stake in the Horse Hill oil project, this time in a transaction with fellow junior market stakeholder Doriemus.
It is acquiring a 6% interest in the Horse Hill Developments Limited (HHDL) vehicle which in turn holds 65% of the Horse Hill project.
Subsequently, UKOG will own 77.9% of HHDL and therefore 50.635% of Horse Hill.
The transaction sees UKOG paying Doriemus £2.1mln in shares, a total of 129.62mln UKOG shares, with a reference price of 1.62p per share (based on the average over five preceding trading days).
"We are delighted to acquire this further share of our Horse Hill flagship oil production project,” said Stephen Sanderson, UKOG chief executive.
“The transaction now firmly establishes UKOG as the majority interest holder in the Horse Hill Portland and Kimmeridge oil field, together with the highly prospective surrounding licence acreage.
“Horse Hill is UKOG's stated 2019 focus and we are on track to deliver continuous test-derived oil production until the start of long-term stable oil production by year-end.
“The plan is designed to make Horse Hill the Weald Basin's number one oil producing field in 2019 and to move UKOG upwards into the top tier of UK onshore oil producing companies shortly afterwards.”
It is anticipated that two new horizontal wells will be added to the Horse Hill project this year, with drilling slated to start in the spring, ahead of the planned start of permanent production later this year.
The plan is to produce some 720-1,080 barrels of oil per day from the conventional Portland reservoir in the upcoming programme.
Future new wells, from 2020 onwards, will aim to increase field production above 2,000 bopd.