REG - UK Oil & Gas PLC - Loxley Gas Project Update

UK Oil & GasAnnouncement

01/05/2024 07:00

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RNS Number : 7089M  UK Oil & Gas PLC  01 May 2024

UK Oil & Gas PLC

("UKOG" or the "Company")

 

Loxley Gas Project Update

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that it has
appointed UK based oil and gas divestment and project marketing specialists,
Envoi Limited to facilitate the farmout of up to a 50% working interest in the
Company's material 100% owned Loxley gas and hydrogen feedstock project
("Loxley"). The farmout seeks to fully fund the planned Loxley-1 appraisal
drilling and testing programme with the Company's share of costs being carried
by the farminee or farminees. The project has incontestable planning consent
to proceed ahead (see RNS 10(th) January 2024).

Separately from Envoi's mandate, active discussions are ongoing with two UK
listed energy companies interested in pursuing the farmout opportunity.

Loxley, one of the UK onshore's largest historic gas discoveries, was assessed
in its most recent February 2023 Competent Persons Report ("CPR") to contain
mid-case recoverable 2C Contingent Resources of 31.0 billion cubic feet net to
UKOG, with an associated net to UKOG post-tax present values (discounted at
10%) of £124 million using 31 December 2022 gas prices and £87 million using
an RPS Energy forward price forecast (see RNS 21st February 2023). Further
development of the asset post appraisal would be required to move the 2C
classification to Reserves (see glossary definitions).

The CPR is available on the Company's website www.ukogplc.com
(http://www.ukogplc.com) .

Stephen Sanderson UKOG's Chief Executive commented;

"The farmout process is designed to fully fund the Loxley appraisal programme
and, if successful, remove the requirement for the Company to raise additional
funds for its share of costs for this material project. We look forward to
working with Envoi and with prospective farminees".

For further information, please contact:

UK Oil & Gas Plc

Stephen Sanderson / Guzyal Mukhametzhanova
                                       Tel:
01483 941493

 

WH Ireland Ltd (Nominated Adviser and
Broker)

James Joyce / James Bavister / Andrew de Andrade
                              Tel: 020 7220 1666

 

Communications

Brian Alexander
 
                     Tel: 01483 941493

 

 

Glossary of terms

 2C          the mid-case or average estimate of Contingent Resources, where the estimated
             quantity is assessed to have a 50% probability that the quantity recovered
             will equal or exceed the estimate.
 CPR         Competent Person's Report, a Petroleum Resources report prepared by an
             independent Competent Person(s), providing an estimated range of remaining
             recoverable resources and their potential monetary valuation in accordance
             with the relevant reporting standard (in this case the 2018 Society of
             Petroleum Engineers' PRMS). The RPS CPR was not prepared under the AIM rules
             for oil & gas companies.
 Contingent  those quantities of petroleum estimated, as of a given date, to be potentially

           recoverable from known accumulations, but the applied project(s) are not yet
 Resources   considered mature enough for commercial development due to one or more
             contingencies. Contingent Resources are further categorised in accordance with
             the level of certainty associated with the estimates and may be sub-classified
             based on project maturity and/or characterised by their economic status.
 discovery   a petroleum accumulation (gas in Loxley's case) 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.
 farmout     An oil sector term characterising a transaction where a party (the farminee)
             bears the full or part costs of a commitment work programme to earn an equity
             or commercial interest in an oil and gas property. Most commonly, farmouts
             involve the farminee paying the costs of a well and or a seismic programme.
 PRMS        Petroleum Resources Management System created by the Society of Petroleum
             Engineers. A global standard of petroleum reserve and resource classification
             together with guidelines and accepted methodologies for the definition and
             estimation of petroleum resources and their monetary valuation.
 Reserves    those quantities of petroleum anticipated to be commercially recoverable by
             application of development projects to known accumulations from a given date
             forward under defined conditions. Reserves must satisfy four criteria:
             discovered, recoverable, commercial and remaining (as of the evaluation's
             effective date) based on the development project(s) applied. Reserves are
             further categorised in accordance with the level of certainty associated with
             the estimates and may be sub-classified based on project maturity and/or
             characterised by development and production status.

 

The information contained within this announcement is deemed by the Company to
constitute inside information under the Market Abuse Regulation (EU) No.
596/2014, as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018. Upon publication of this announcement, this information
is now considered to be in the public domain.

 

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