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UK Oil & Gas backtracks on Horse Hill oil find claims

Work outside of its licence areas was not sufficient to comment on the amount of oil in place across the Weald Basin.
UK Oil & Gas backtracks on Horse Hill oil find claims

Horse Hill operator UK Oil & Gas (LON:UKOG) has been told to clarify its statements last week that the Weald Basin near Gatwick may hold 100bn barrels of oil.

The company created a press furore with the claims, which would amount to double the amount of oil produced from the North Sea so far.

Shares in UKOG and all the other companies in the Horse Hill consortium rocketed after chief executive Stephen Sanderson told the BBC there could be between 50 and 100bn barrels of oil in place in the ground.

The Horse Hill licences cover 55 square miles of the Weald Basin, in which UKOG has a 20.358% interest, but it said today it had not undertaken work outside of its licence areas sufficient to comment on the possible OIP (oil in place) in either the approximate 1,100 square miles or the whole of the Weald Basin.

The BBC reported today the company had been told by junior market AIM to clarify its earlier statements.

UKOG employed specialist US oilfield consultant Nutech to analyse the results from the Horse Hill-1, the only well drilled so far by the consortium, though it went much deeper than any previous drilling.

Nutech estimated Horse Hill-1 had total oil in place of 158 mln barrels per square mile.

“Further development work in the form of appraisal drilling, well testing and assessment of recovery factors will be required to seek to quantify net resources in relation to the company's licence areas and to prove its commerciality,” UKOG said in its statement.

"The OIP hydrocarbon volumes estimated should not be considered as either contingent or prospective resources or reserves."

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