REG - UK Oil & Gas PLC - Acquisition of Further Interest in Horse Hill

UK Oil & GasAnnouncement

30/08/2018 07:05

RNS Number : 2044Z
UK Oil & Gas PLC
30 August 2018
 


 
UK Oil & Gas PLC
("UKOG" or the "Company")
 
Acquisition of Further 15% Interest in Horse Hill Oil Discovery and Licences.
PEDL137 & PEDL246 Licences, Weald Basin, UK
 
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that it has entered into a sale and purchase agreement with Solo Oil Plc ("Solo") to acquire their 15% shareholding in Horse Hill Developments Ltd ("HHDL"), the operator and 65% interest holder in the Horse Hill-1 ("HH-1") Portland and Kimmeridge Limestone oil discovery and 55 square mile (143 km2) PEDL137 and PEDL246 licences ("the Licences"). Upon completion the Company will hold a majority 71.9% HHDL shareholding, equating to 46.735% beneficial interests in the Licences, the largest single beneficial interest-holding in both Licences.
 
As previously reported in July and August, a comprehensive 150-day extended well test programme, designed to confirm the HH-1 well's commerciality, is in progress. Results to date from the Portland oil pool have been very positive. Testing of the two Kimmeridge Limestone oil pools will commence following completion of the Portland test.
 
Transaction Summary
 
For a total consideration of £4,500,000, the Company will purchase Solo's 15% shareholding in HHDL, equating to a further 9.75% beneficial interest in the Licences. The total consideration of £4,500,000 with an effective date of 28 August 2018, will be satisfied through the issue of 234,042,221 new ordinary shares in UKOG ("Consideration Shares"). The Consideration Shares are calculated based on the 10-day volume weighted average price from 24 August 2018 of 1.92 pence.
 
In addition, and to ensure parity with the acquisition of 7% of HHDL announced on 20 August 2018 we have agreed with Gunsynd PLC ("Gunsynd") and Primorus Investments PLC ("Primorus") to issue a further 2,600,469 and 6,501,173 new ordinary shares respectively in UKOG so that both the Solo transaction and the Gunsynd and Primorus transactions will be completed at £300,000 per 1% of HHDL.
 
Completion of these acquisitions, which will be announced in due course, is conditional on HHDL consent. In the year ended December 2016, HHDL made a loss of £146,208.
 
Stephen Sanderson, UKOG's Chief Executive, commented:
 
"This further strategic acquisition firmly cements UKOG as the dominant player in the Horse Hill Portland and Kimmeridge oil discoveries and Licences. UKOG's three recent HHDL acquisitions provide a valuable controlling interest and exemplify the rationale behind our recent change of AIM status to an operating company. With the positive Portland test results to date, UKOG, supported by its remaining three coventurers, can now steer the way towards permanent HH oil production in 2019."
 
Qualified Person's Statement
 
Rob Wallace, UKOG's principal technical advisor, who has over 40 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Wallace is a Chartered Scientist, Chartered Geologist and Fellow of the Geological Society of London, an active member of the American Association of Petroleum Geologists, a member of the Petroleum Exploration Society of Great Britain and a member of the South African Geophysical Society.
 
For further information, please contact:
 
UK Oil & Gas Investments PLC
Stephen Sanderson / Kiran Morzaria                                                      Tel: 01483 243450
 
WH Ireland (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
 
Public Relations
Brian Alexander / David Bick                                                                     Tel: 01483 243450
 
 
UKOG Licence Interests
 
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 currently shut in




Broadford Bridge 3


PEDL234


100%


UKOG (234) Ltd 4


UKOG (234) Ltd 4


300.0


BB-1 & 1z completed, preparing two further planning applications




Holmwood 3


PEDL143


40%


UKOG


Europa Oil & Gas (Holdings) plc


91.8


Holmwood-1 exploration well planned in 2018




Horndean 1


PL211


10%


UKOG (GB) Limited


IGas Energy Plc


27.3


Field in stable production




Horse Hill 5


PEDL137


46.735%


Horse Hill Developments Ltd ⁶


Horse Hill Developments Ltd ⁶


99.3


Production tests ongoing, further appraisal well(s) scheduled for 2018/19




Horse Hill 5


PEDL246


46.735%


Horse Hill Developments Ltd⁶


Horse Hill Developments Ltd ⁶


43.6


As above




Isle of Wight (Onshore) 2, 3


PEDL331


65%


UKOG


UKOG


200.0


Preparing planning submission  for Arreton-3 oil discovery appraisal well




Markwells Wood 2


PEDL126


100%


UKOG (GB) Limited


UKOG (GB) Limited


11.2


Revised drilling and testing planning application underway



               
Notes:
 
1. Oil field currently in production.
2. Oil discovery pending development and/or appraisal drilling.
3. Exploration asset with drillable prospects and leads. PEDL234 contains the Broadford Bridge-1 and 1z

  discovery well, the extension of the Godley Bridge Portland gas discovery plus further exploration

  prospects.
4. UKOG has a 100% interest in UKOG (234) Ltd, which has a 100% interest in PEDL234.
5. Oil discovery with successful flow test in 3 zones, further long-term testing scheduled in 2018
6. UKOG has a direct 71.9% interest in HHDL, which has a 65% interest in PEDL137 and PEDL246.
 
 
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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