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UK Oil & Gas confident as Horse Hill’s horizontal drilling starts

The plan is to have both the vertical HH-1 and horizontal HH-2z starting long-term production in late 2019

UK Oil & Gas PLC - UK Oil & Gas boasts confidence as Horse Hill’s horizontal drilling starts
It is now cutting some 3,200 feet through the 'sweet spot' of the Portland reservoir

UK Oil & Gas PLC (LON:UKOG) expressed confidence as it welcomed the start of horizontal drilling at the Horse Hill oil project near Gatwick airport.

Following recent completion of the HH-2 vertical pilot hole, which confirmed the ‘sweet spot’ in the Portland reservoir, the HH-2z horizontal will now stretch for some 3,200 feet within the reservoir's most oil productive zone.

It will be the first horizontal to be drilled at the project and it is expected to deliver enhanced oil flows compared to the successful vertical HH-1 well, which has so far produced close to 70,000 barrels of oil in extended testing.

READ: UKOG boosted as coring confirms reservoir “sweet spot” at Horse Hill

Both the HH-1 and HH-2z well will operate under test production status prior to the official start of long-term production at Horse Hill before the end of 2019.

The horizontal drilling programme is slated to conclude by mid-November.

In its statement, UKOG - the largest stakeholder in Horse Hill - also highlighted findings from analysis of HH-2 to date.

It noted that the sweet spot, with its significant oil saturations and high permeabilities observed in HH-2 core and logs, has likely contributed the lion's share of the 29,568 barrels of Brent quality oil produced from the Portland whilst testing the HH-1 well.

To optimise results from HH-2z the plan is to ‘geo-steer’ the horizontal drilling in order to stay within the sweet spot for as much of the well as possible.

"Our confidence in the HH-2z horizontal's ability to deliver significant flow rates has been further boosted by the pilot well's better than expected geological results,” said Stephen Sanderson, UKOG chief executive.

“Our subsurface team's focus is now firmly upon steering the well wholly within the target zone, the Portland sweet spot, demonstrably the most oil productive part of the reservoir. I have every confidence we can deliver the desired positive result."

UKOG owns a 85.635% controlling interest in the Horse Hill project, via direct project interests and a stake in project operator Horse Hill Development Limited (HHDL).

Meanwhile, AIM-quoted natural resources peer Alba Mineral Resources plc (LON:ALBA) holds an 11.765% interest in the HHDL vehicle, which has 65% of the project equity.

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Price: 1.025 GBX

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