RNS Number : 7976E
UK Oil & Gas Investments PLC
22 July 2016
 

UK Oil & Gas Investments PLC

("UKOG" or the "Company")

 

Acquisition of Further Interest in Horse Hill-1 Oil Discovery and Licences, Weald Basin, UK

 

UK Oil & Gas Investments PLC (London AIM and ISDX: UKOG) announces that it has acquired the entire 3.9% interest of Flowermay Limited ("Flowermay") in onshore Weald Basin licences PEDL137 and PEDL246 ("the Licences"). The Company now holds a 31.2% total interest in the Licences.

 

The Licences, covering an area of 55 square miles north of Gatwick Airport, contain the Horse Hill-1 ("HH-1") Portland and Kimmeridge Limestone oil discoveries. As previously reported on 21 March, HH-1 flow tested at a significant "North Sea-like" commercial aggregate stable dry oil rate of 1,688 barrels of oil per day. Regulatory permissions are being sought for a significant long-term production testing and appraisal programme of the productive Kimmeridge Limestones and Portland oil-bearing reservoirs.

 

Transaction Summary

For a total consideration of £1 million, the Company will receive a 3.9% beneficial interest in the Licences via the purchase of Flowermay's remaining 6% shareholding in Horse Hill Developments Ltd ("HHDL"). The total Consideration, with an effective date of 21 July 2016, is comprised of £150,000 payable in cash and £850,000 in the form of the issue of new ordinary shares in UKOG ("Consideration Shares"). The Consideration Shares will be calculated on the 10-day volume weighted average price prior to the completion of the transaction. Completion of the acquisition is conditional on the consent of HHDL. A further announcement will be made on completion.

 

HHDL and the Company's Interest in the Licences

HHDL is a special purpose vehicle, which owns a 65% working interest and operatorship of the Licences. UKOG now owns a 48% beneficial shareholding in HHDL, which equates to a 31.2% net working interest in the Licences. The remaining 35% interest in the Licences is held by Magellan Petroleum (UK) Limited.

Stephen Sanderson, UKOG's Executive Chairman, commented:

"This acquisition brings our overall interest in the Horse Hill project to 31.2%, a very material interest in a project with multiple oil bearing reservoirs that have been proven to flow at high initial commercial rates. The acquisition is a logical fit within our ongoing strategy to consolidate and expand our licence position in the new and potentially significant Kimmeridge Limestone oil province. We now look forward to the conclusion of the regulatory permit application cycle at Horse Hill and to resuming extended well testing and appraisal drilling at the site."

Qualified Person's Statement:

Stephen Sanderson, UKOG's Executive Chairman, who has over 35 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Sanderson is a Fellow of the Geological Society of London and is an active member of the American Association of Petroleum Geologists.

 

For further information, please contact:

UK Oil & Gas Investments PLC

Stephen Sanderson / Jason Berry                                                                             Tel: 020 7440 0640

WH Ireland (Nominated Adviser and Broker)

James Joyce / James Bavister                                                                                      Tel: 020 7220 1666

Square 1 Consulting (Public Relations)

David Bick / Brian Alexander                                                                                      Tel: 020 7929 5599

 

Glossary

 

discovery

a discovery is a petroleum accumulation for which one or several exploratory wells have established through testing, sampling and/or logging the existence of a significant quantity of potentially moveable hydrocarbons

flow test

a flow test or well test involves testing a well by flowing hydrocarbons to surface, typically through a test separator. Key measured parameters are oil and gas flow rates, downhole pressure and surface pressure. The overall objective is to identify the well's capacity to produce hydrocarbons at a commercial flow rate

limestone

a sedimentary rock predominantly composed of calcite (a crystalline mineral form of calcium carbonate) of organic, chemical or detrital origin. Minor amounts of dolomite, chert and clay are common in limestones. Chalk is a form of fine-grained limestone. The Kimmeridge Limestones are effectively chalks being comprised of the remains of calcareous planktonic algae.

 

Notes to Editors:

The Company has interests in the following UK licences:

Asset

Licence

UKOG's Interest

Licence Holder

Operator

Area (km2)

Status


Avington 1

PEDL070

5%

UKOG (GB) Limited

IGas Energy Plc

18.3

Field in stable production.


Baxters Copse 2

PEDL233

50%

UKOG Weald Limited

IGas Energy Plc

89.6

Reviewing economics of appraisal/ development well.


Broadford Bridge

PEDL234

100%

Kimmeridge Oil & Gas Limited

Kimmeridge Oil & Gas Limitied

300.0

BB-1 well permitted; expected 2017 spud date.


Brockham 1

PL234

3.6%

Angus Energy 5

Angus Energy 5

8.9

Drilling of sidetrack well being considered.


Holmwood 3

PEDL143

30%

UKOG

Europa Oil & Gas (Holdings) plc

91.8

H-1 exploration commitment well planned.


Horndean 1

PL211

10%

UKOG (GB) Limited

IGas Energy Plc

27.3

Field in stable production.


Horse Hill 4

PEDL137

31.2%

Horse Hill Developments Ltd 6

Horse Hill Developments Ltd 6

99.3

Extended flow testing of HH-1.


Horse Hill 4

PEDL246

31.2%

Horse Hill Developments Ltd 6

Horse Hill Developments Ltd 6

43.6

Extended flow testing of HH-1.


Isle of Wight (Offshore) 3

P1916

77.5%

UKOG Solent Limited

UKOG Solent Limited

46.7

Preparing drilling planning submission.


Isle of Wight (Onshore) 2, 3

PEDL331

65%

UKOG

TBA

200.0

Preparing drilling planning submission.


Lidsey 1

PL241

4.2%

Angus Energy 5

Angus Energy 5

5.3

Drilling of infill well being considered.


Markwells Wood 2

PEDL126

100%

UKOG (GB) Limited

UKOG (GB) Limited

11.2

Compiling Field Development Plan.


 

Notes:

1. Oil field currently in production.

2. Oil discovery pending development and/or appraisal drilling.

3. Exploration asset with drillable prospects and leads.

4. Oil discovery with recently completed flow testing.

5. UKOG has a 6% interest in Angus Energy, which has a 70% interest in Lidsey and a 60% interest in Brockham.

6. UKOG has a direct 30% interest in HHDL, plus an indirect 0.72% interest via Angus Energy; HHDL has a 65% interest in PEDL137 and PEDL246.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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