REG - UK Oil & Gas Inv PLC - Update on Flow Test <Origin Href="QuoteRef">UKOGa.L</Origin>

UK Oil & GasAnnouncement

16/02/2016 07:10

RNS Number : 1444P
UK Oil & Gas Investments PLC
16 February 2016
UK Oil & Gas Investments PLC
("UKOG" or the "Company")
Update on Flow Test
Horse Hill-1 Oil Discovery, Weald Basin, UK
Significant Oil Flows to Surface from Lower Kimmeridge Limestone
UK Oil & Gas Investments PLC (London AIM and ISDX: UKOG) announces that Horse Hill Developments Limited has informed the Company that light, 40-degree API, sweet oil has flowed naturally to surface from an 80-foot zone within the Lower Kimmeridge limestone interval at a depth of approximately 900 metres below ground level. 
Flow commenced at around 10.00am GMT yesterday at an initial instantaneous rate in excess of 700 barrels per day using a 1-inch choke, in an approximate mix of 50:50 oil to water. The well was then choked back to 32/64 inches resulting in a steady early oil rate in excess of 463 barrels of oil per day over a further 7.3-hour period, in an approximate mix of over 99% oil and less than 1% water. 
The Lower Kimmeridge flow period is planned to continue today at 0700 following an overnight shut-in from 1900 Monday. Upon completion, Phase 2 and Phase 3 operations will move to the shallower Upper Kimmeridge limestone and Portland sandstone zones at approximately 840 and 615 metres below ground level, respectively.
The HH-1 discovery well, the original exploration drilling phase originally completed at the end of 2014, is located within onshore exploration Licence PEDL137, on the northern side of the Weald Basin near Gatwick Airport. UKOG owns a 20.163% interest in PEDL137. 
Stephen Sanderson, UKOG's Executive Chairman commented: 
"This is a very significant event for the company and for oil and gas activity in the Weald basin of southern England. Importantly, tests so far show oil has flowed to the surface under its own pressure and has not, so far, required artificial lift.
The flow test, the first ever in the Lower Kimmeridge limestone within the Weald basin, provides proof that significant quantities of moveable oil exist within the Kimmeridge section of the well and can be brought to surface at excellent flow rates. In this case from a vertical well with minimal stimulation. 
While these flow rates are significant and in excess of management's expectations, it should be borne in mind that the planned future use of a horizontal well and appropriate conventional reservoir stimulation techniques could likely increase flow rates even further.
We look forward to more news from the final test results from the Lower Kimmeridge limestone and the shallower tests. The Company will be starting the regulatory permit process forthwith, so we can return to the well to seek to demonstrate sustainable commercial production."
UKOG's interest in Horse Hill
The HH-1 well is located within onshore exploration Licence PEDL137, on the northern side of the Weald Basin near Gatwick Airport. UKOG owns a 30% direct interest in HHDL and a 1.02% interest in HHDL via its 6% interest in Angus Energy Limited. HHDL is a special purpose company that owns a 65% participating interest and operatorship of Licence PEDL137 and the adjacent Licence PEDL246 in the UK Weald Basin.
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 / Mark Leonard Tel: 020 7220 1666
Square 1 Consulting (Public Relations)
David Bick / Brian Alexander Tel: 020 7929 5599
Glossary
choke
Device incorporating a fixed or variable orifice that is used to control fluid flow rate during testing of an exploratory discovery 
degree API
A measure of the density of crude oil as defined by the American Petroleum Institute
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
extended flow test
a flow test, as per the permission granted by the Oil and Gas Authority, with an aggregate flow period duration over all zones of greater than 96 hours and up to 90 days maximum. 
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
sandstone
a clastic sedimentary rock whose grains are predominantly sand-sized. The term is commonly used to imply consolidated sand or a rock made of predominantly quartz sand.
sweet oil or crude
A type of oil that contains less than 0.42% Sulphur 
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.
Brockham 1
PL234
3.6%
AngusEnergy5
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
20.163%
Horse Hill Developments Ltd 6
Horse Hill Developments Ltd 6
99.3
Extended flow testing of HH-1
Horse Hill 4
PEDL246
20.163%
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 pending flow testing.
5. UKOG has a 6% interest in Angus Energy. Angus Energy has a 70% interest in Lidsey and a 60% interest in Brockham.


6. UKOG has a direct 30% interest in HHDL, plus an indirect 1.02% 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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