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UKOG eyes long term production at Horse Hill as Portland test flows resume

“The flow test results to date, combined with the prospect of further near term drilling, place Horse Hill in a strong position to deliver positive ‘free’ cash flow."

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A total of 142 tankers worth of crude have been successfully delivered to the Hamble oil terminal

UK Oil & Gas PLC (LON:UKOG) told investors that continuous production is now underway from the Portland reservoir at the Horse Hill project as efforts focus on the field development plan.

It is targeting long-term production starting in late 2019.

In the current extended well testing phase of production, the Portland reservoir is flowing at a stable rate between 208 and 218 barrels of oil per day.

Stephen Sanderson, UKOG chief executive, noted that the Portland is showing a good performance following a 6-month shut-in period.

READ: UK Oil & Gas increases stake in Horse Hill project

“The continued good flow performance from the Portland further reinforces the viability of Xodus' and the company's 720-1,080 bopd horizontal well production targets,” he said in a statement.

UKOG highlighted that during the whole extended well testing to date some 30,200 barrels of oil have been produced, in aggregate from the Kimmeridge and Portland zones. The majority, around 25,000 barrels, came from the Kimmeridge.

A total of 142 tankers worth of crude have been successfully delivered to the Hamble oil terminal and the oil continues to be sold at prevailing Brent prices (less a small deduction for handling and marketing).

Sanderson added: “We remain on course to commence the first two horizontals in Spring, with long term production testing of both wells planned to follow directly afterwards.

“The flow test results to date, combined with the prospect of further near term drilling, place Horse Hill in a strong position to deliver positive ‘free’ cash flow to UKOG in the near and foreseeable future."

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Price: 1.15 GBX

AIM:UKOG
Market: AIM
Market Cap: £73.49 m
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