RNS Number : 4190F
UK Oil & Gas PLC
09 March 2020

UK Oil & Gas PLC

("UKOG" or the "Company")


Dry Oil Flows to Surface Following Successful Horse Hill-2z Water Shut-Off Programme  




UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that the intervention to shut off significant formation water ingress into its Horse Hill-2z ("HH-2z") horizontal production well has been successful.


Following the identification of the water ingress source via production logging, a rigid setting Thermatek® plug was set over a zone of open natural fractures clustered at the deepest part or "toe" of the wellbore. Initial testing of HH-2z post-Thermatek® has demonstrated a continuous flow of dry oil to surface, confirming that the plug has eliminated underlying formation water ingress into HH-2z.


Dry oil flow rates during the initial 48-hour "clean-up" period to date are encouraging, with metered daily rates averaging 223 barrels of oil per day ("bopd"). However, as is to be expected in the early clean-up stage of such a horizontal wellbore, both oil and associated gas rates have been very variable. Half hourly rates have thus ranged  from a high of 778 bopd to a low of around 10 bopd during intermittent short periods of "slugging" (i.e. the return of discrete pockets of gas and/or completion fluids).  


The water ingress problem meant that HH-2z remained shut-in for almost 3 months, with spent drilling and completion fluids within the near wellbore. Consequently, it is expected that the full clean-up process is likely to take a number of weeks of aggregate flow. As part of the clean-up process, to ensure the full remaining horizontal section contributes towards aggregate oil flow, further interventions are planned to help fine-tune and optimise flow from the well.


HH-2z clean-up operations are planned to continue over the coming week, after which essential maintenance and a planned upgrade of well test and production facilities will occur. These operations, designed primarily to enable simultaneous production from HH-1 and HH-2z, will require both HH-1 and HH-2z to be shut-in for a period of up to ten days.  


Full extended well test operations with simultaneous multi-well production are planned to resume directly after the shut-in.


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:


"Such water shut-off operations are routinely undertaken in production wells. However, success, particularly  in horizontal wellbores and where water ingress is via open natural fractures, is by no means guaranteed. Consequently, this is an excellent result for the Company as it has enabled HH-2z to flow dry oil to surface at encouraging initial rates. Our operations team deserves tremendous credit for this successful outcome."


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 941493


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: 020 7397 8919


Novum Securities (Joint Broker)                                                                                                              

John Bellis                                                                                                     Tel: 020 7399 9400


Public Relations

Brian Alexander                                                                                           Tel: 01483 941493





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


a Halliburton trademarked rigid setting fluid plug designed to isolate zones within a completed wellbore

well test

or flow test involves testing a well by flowing hydrocarbons to surface, typically through a test separator over a flowing period of up to 96 hours; 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. An extended well test or EWT is a well test with duration of over 96 hours and up to 90 or 180 flowing days aimed at assessing longer term production viability and the connected oil in place seen by the well.


UKOG Licence Interests


The Company has interests in the following UK licences:




UKOG Interest

Licence Holder


Area (km2)


Avington 1



UKOG (GB) Limited

IGas Energy Plc


Field currently temporarily shut in

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



UKOG (234) Ltd 4

UKOG (234) Ltd 4


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

A24 3






Finalising new site selection to drill Portland and Kimmeridge prospects

Horndean 1



UKOG (GB) Limited

IGas Energy Plc


Field in stable production

Horse Hill 5



Horse Hill Developments Ltd 

Horse Hill Developments Ltd 


Production tests ongoing, HH-2/2z drilling completed

Horse Hill 5



Horse Hill Developments Ltd 

Horse Hill Developments Ltd 


As above

Isle of Wight (Onshore) 2, 3






Preparing planning submission for Arreton oil appraisal well and Godshill exploration well

Markwells Wood



UKOG (GB) Limited

UKOG (GB) Limited


MW-1 P&A




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, EWT ongoing, production planning consent granted in September 2019, appraisal/development drilling campaign completed. Long term Production start expected Spring 2020.

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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