REG - UK Oil & Gas PLC - Turkey: General operational update

UK Oil & GasAnnouncement

10/12/2021 07:00

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RNS Number : 2536V  UK Oil & Gas PLC  10 December 2021

UK Oil & Gas PLC

("UKOG" or the "Company")

 

Turkey: General operational update

UK Oil & Gas PLC (London AIM: UKOG) ("the Company") announces that
following its first covid permitted technical and management visit to its
partner Aladdin Middle East's ("AME") offices in Ankara and to the company's
Basur-Resan licence area in which UKOG holds a 50% non-operated interest, it
is pleased to provide the following general update:

Basur-Resan Seismic Acquisition

 

Further to AME's August decision to temporarily halt drilling of the proposed
Basur-3 ("B-3") mechanical sidetrack ("B-3S") until new seismic over the
target area was acquired, good progress has now been made by Viking
Geophysical Services ("VGS") in acquiring the 2D seismic programme.

 

The Company's geophysicist visited the VGS operation for over a week and
continues regular in-person oversight of the acquisition. VGS' acquisition
programme is also being overseen by the Company's UK-based expert acquisition
quality control consultant to ensure the best data possible is acquired.

 

A first tranche of acquisition and fast track processing ("Phase 1") is due to
be completed within the first quarter of 2022, factoring in anticipated
winter-weather down-time in the Siirt region. It should be noted that seismic
acquisition in this area of Turkey is challenging due to the remote location,
rough and steep topography, significant elevation changes and presence of
several significant river gorges and lakes.

The Phase 1 processing contractor has been chosen and priority will be given
to fast-track process 3 lines covering the B-3S area and trajectory, plus the
proposed new Resan-6 drilling location. Existing legacy data has also been
recently reprocessed and a pre-stack depth migration process has commenced
aimed at sharpening the seismic imaging and spatial positioning of faults that
may be encountered along the B-3S trajectory.

B-3S Drilling

 

Active planning of B-3S is well underway and initial discussions with
prospective drilling rig contractors have taken place, with detailed well
planning and contractor selection progressing. It is planned that the well
will commence upon receipt and interpretation of the fast-track seismic
processing.

 

In the interests of maximising cost efficiencies, plans are in place for
surplus UKOG-owned casing to be transferred to the B-3S site for utilisation
during drilling, thus reducing UKOG net costs

 

The Company is working closely with AME's operations team and spent a full day
involved in joint contractor meetings and well planning during its Ankara
visit.

 

B-3S is located within the north-western structural culmination of the 60 km²
Basur-Resan anticlinal structure, with a surface location approximately 1.2 km
north of the 1964 Basur-1 oil discovery well. UKOG's wholly owned subsidiary
UKOG Turkey holds a 50% interest in B-3 and the surrounding 305 km² Resan
M47-b1, b2 licence with AME, its joint venture partner and the operator of B-3
and B-3S.

 

As stated in August 2021 the Company's position in which it preferred to drill
B-3S before the conclusion of the seismic programme remains unchanged.
However, in the interests of JV harmony we will support the operator's
position and forward plan.

 

Additional Basur-Resan Licence Prospectivity

 

Recent detailed surface geological mapping of the licence area has identified
a previously unrecognised and undrilled surface anticline, currently referred
to as Lead Siirt. This new feature is a four-way dip thrust-related anticline,
geologically analogous in nature to AME's producing East Sadak field and
occupies a larger surface extent. Since AME's discovery of the nearby East
Sadak field in late 2013, they have successfully drilled 12 producing wells
plus 3 sidetracks in the field.

 

The joint venture may switch one or two of the less essential Basur-Resan
seismic lines to cover Lead Siirt with the object of better understanding its
potential hydrocarbon volumes prior to any drilling decision. Should such a
switch occur, it will not affect B-3S drilling or the definition of the
Basur-Resan structure.

 

Joint Venture Admin

 

A Resan Licence Operating Committee meeting was held in Ankara, the first face
to face meeting permitted since the pandemic, and which approved the 2022 work
programme and budget for seismic acquisition and B-3S drilling.

 

Sufficient funds are available to deliver the seismic and planned sidetrack as
stated above.

 

New Ventures

 

AME and the Company's bid for three new licences in last year's Turkish
mini-licence round, announced on 10 December 2020, was ultimately
unsuccessful. The mini licence round attracted several other bidders including
the Turkish national oil company TPAO. Although the result was disappointing
given the work programme offered by AME and UKOG, the bid was always ancillary
to the Company's main focus of appraising Basur-Resan.

 

We now understand from various sources in Ankara that whilst GDMPA, the
Turkish licence regulator, recommended the award of more than one licence to
the AME led group, the Ministry awarded all these licences in favour of TPAO
following their recent successes in the Black Sea.

 

The Company continues to look for additional projects in Turkey and has
reviewed a further new opportunity to the southeast of our Resan licence. This
contains an interesting and potentially material undrilled anticlinal feature
analogous to both East Sadak and Basur-Resan. Further information will be
issued in due course if our evaluations prove positive.

 

Qualified Person's Statement

 

Matt Cartwright, UKOG's Commercial Director, who has 38 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.

 

Stephen Sanderson, UKOG's Chief Executive commented:

 

"2022 promises to be an exciting year in our Turkish assets with the
conclusion of the Basur-Resan seismic programme and the drilling and testing
of Basur-3S. The additional prospectivity from Lead A also gives unexpected
further additional resources and drilling scope to the Licence."

 

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 / Andrew de Andrade                       Tel: 020 7220 1666

        Communications
        Brian Alexander                                       Tel: 01483 941493

 

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