RNS Number : 7658U
UK Oil & Gas PLC
27 November 2019
 

UK Oil & Gas PLC

("UKOG" or the "Company")

 

HH-2z Completed as Horse Hill's First Future Horizontal Oil Production Well

 

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that its Horse Hill-2z ("HH-2z") Portland horizontal well (UKOG 85.635% net controlling interest) has been completed and temporarily suspended as a future oil-production well. HH-2z is now ready to enter into the planned extended well test ("EWT") campaign. EWT operations are expected to start in early December, once the rig has left the site.

 

Following displacement of drilling fluids to clean completion brine, well completion operations included: the installation of 4.5" diameter slotted steel liner, production tubing, a high-capacity/high-rate downhole electric submersible pump ("ESP") and a new wellhead. Immediately following rig departure, HH-2z flow lines and ESP control cables will be connected, and the site's oil stock-tank storage capacity will also be significantly increased.

 

To permit safe operations during the HH-2z rig-down operation, HH-1 Kimmeridge EWT production has also been temporarily shut in. Oil production from the HH-1 EWT has continued throughout HH-2/2z drilling and is planned to resume in parallel with the HH-2z EWT. Total HH-1 test production now stands at over 78,844 barrels ("bbl"), with over 49,276 bbl from the Kimmeridge oil pool.

 

HH-2z Summary

 

The HH-2z drilling campaign successfully delivered approximately 2,500 ft of horizontal trajectory wholly within the Portland reservoir's most oil productive zone or "sweet-spot". The gross thickness within the sweet spot is approximately 70 times greater than in the HH-1 Portland vertical discovery well.

 

The significantly increased exposure to the sweet-spot within HH-2z, the first horizontal well in the field's Portland oil pool, is the prime technical enabler for HH-2z to be capable of delivering significantly greater flow rates than those seen in the HH-1 vertical well.

 

Preliminary HH-2z electric log analysis suggests the horizontal trajectory has penetrated good to excellent reservoir quality and high oil saturations throughout the 35 ft thick sweet-spot zone. The drilling fluid density required whilst drilling the horizontal is also strongly indicative that HH-2z has penetrated an area of the Portland oil pool with significantly lower pressure depletion than expected, a positive indication for possible larger connected oil volumes than previously recognised.

 

HH-2z EWT Forward Plan 

 

The HH-2z EWT testing programme will commence with a planned sequence of normal well "clean-up" operations, designed to ensure that the well can deliver at its full production potential. The clean-up process will run in tandem with flow periods and pressure build up tests.

 

Once full clean-up is achieved, the well will be flowed over a minimum 90-day flow period to assess its stable production performance.  Following the EWT, and subject to the necessary consents from the Oil and Gas Authority, it is planned to transition HH-2z and HH-1 seamlessly from test production into long-term stable oil production.  Planning consent for long term oil production over 25 years was granted by Surrey County Council on 27 September 2019.

 

UKOG holds a controlling 85.635% interest in the Horse Hill oil field and surrounding highly prospective PEDL137 and PEDL246 licences, which are operated by UKOG's subsidiary company, Horse Hill Developments Ltd.

 

Stephen Sanderson, UKOG's Chief Executive, commented:

 

"Horse Hill's first optimally placed horizontal is now poised to enter its next key phase, the eagerly anticipated flow testing campaign. We remain confident that the 2,500 ft of permeable Portland sweet-spot reservoir section, 70 times that seen in HH-1, can deliver significant rates. We look forward to safe and successful EWT operations over the coming months."

 

Qualified Person's Statement

 

Matt Cartwright, UKOG's Commercial Director, who has over 36 years of relevant experience in the global oil industry, has approved the information contained in this announcement. Mr Cartwright is a Chartered Engineer and member of the Society of Petroleum Engineers.

 

For further information, please contact:

 

UK Oil & Gas PLC

Stephen Sanderson / Kiran Morzaria                                                      Tel: 01483 900582

 

WH Ireland Ltd (Nominated Adviser and Broker)

James Joyce / James Sinclair-Ford                                                           Tel: 020 7220 1666

 

Cenkos Securities PLC (Joint Broker)

Joe Nally / Neil McDonald                                                                         Tel: 0207 397 8919

 

Novum Securities (Joint Broker)                                                                                                              

John Bellis                                                                                                     Tel: 020 7399 9400

 

Public Relations

Brian Alexander                                                                                           Tel: 01483 900582

 

Glossary

 

 

coring

a drilling technique that involves using a doughnut-shaped drilling bit to capture or "cut" a continuous cylinder-shaped sample of in-situ rock. The core is captured in a steel pipe or "core barrel" above the bit. Core is normally cut in 30 feet lengths, or multiples of 30 feet, and with a diameter of 3-4.5 inches. Core is taken in petroleum reservoir rocks for detailed laboratory analyses of geological, geochemical petrophysical and geomechanical properties

horizontal well

a well that during drilling is steered so as to follow and remain within a particular geological stratum or reservoir unit having a trajectory that runs approximately parallel to the top and or base of the target horizon

oil field

an accumulation, pool or group of pools of oil in the subsurface that produces oil to surface

well test

or flow 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 and volumes.

 

UKOG Licence Interests

 

The Company has interests in the following UK licences:

 

Asset

Licence

UKOG Interest

Licence Holder

Operator

Area (km2)

Status

Avington 1

PEDL070

5%

UKOG (GB) Limited

IGas Energy Plc

18.3

Field currently temporarily shut in

Broadford Bridge/Loxley/Godley Bridge 2, 3, 8

PEDL234

100%

UKOG (234) Ltd 4

UKOG (234) Ltd 4

300.0

BB-1/1z oil discovery, Loxley-1 gas appraisal well planning application submitted

A24 3

PEDL143

67.5%

UKOG

UKOG 7

91.8

Finalising new site selection to drill Portland and Kimmeridge prospects

Horndean 1

PL211

10%

UKOG (GB) Limited

IGas Energy Plc

27.3

Field in stable production

Horse Hill 5

PEDL137

85.635%

Horse Hill Developments Ltd 

Horse Hill Developments Ltd 

99.3

HH-2z well completion run prior to EWT

Horse Hill 5

PEDL246

85.635%

Horse Hill Developments Ltd 

Horse Hill Developments Ltd 

43.6

As above

Isle of Wight (Onshore) 2, 3

PEDL331

95%

UKOG

UKOG

200.0

Preparing planning submission for Arreton-3 oil appraisal well and Arreton South exploration well

Markwells Wood

PEDL126

100%

UKOG (GB) Limited

UKOG (GB) Limited

11.2

MW-1 P&A

               

Notes:

 

1.  Oil field currently in stable production.

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

3.  Exploration asset with drillable prospects and leads.

4.  Contains the Broadford Bridge-1/1z Kimmeridge oil discovery, the eastern extension of the Godley Bridge Portland gas discovery, plus further undrilled Kimmeridge exploration prospects.

5.  Portland and Kimmeridge oil field with productive and commercially viable zones, HH-2z EWT to commence shortly, production planning consent granted in September 2019, appraisal/development drilling campaign completed.

6.  UKOG has a direct 77.9% interest in HHDL, which has a 65% interest in PEDL137 and PEDL246.

7.  OGA consent received for the transfer of operatorship from Europa to UKOG.

8.  Gas discovery pending appraisal drilling and development with underlying Kimmeridge potential.

 

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014


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