REG - UK Oil & Gas PLC - Turkey: Operational Update & New Pinarova-1 well

UK Oil & GasAnnouncement

11/01/2023 07:00

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RNS Number : 3123M  UK Oil & Gas PLC  11 January 2023

UK Oil & Gas PLC

("UKOG" or the "Company")

 

Turkey: Operational Update & New Pinarova-1 well

 

Further to the analysis of the Q3 2022 Phase 2 Seismic Programme UK Oil &
Gas PLC (London AIM: UKOG) is pleased to announce that the Resan JV (UKOG 50%
working interest) has identified and plans to drill in Q1 2023, a new
potential shallow oil accumulation, Pinarova, of some 9 km² areal extent,
located 6 km north of the Basur-1 oil discovery. The new Pinarova-1 well is
designed to test a working hypothesis, supported by well and seismic data,
that the active (41.7˚API) light oil seep found last summer in a seismic shot
hole (see RNS of 30 June 2022) above the Pinarova structure, is directly fed
by and connected to an underlying light oil accumulation within Eocene Hoya
group limestones, 300-645m below surface.

The presence of movable oil within Pinarova is indicated by results of the
2018 Kezer-1 shallow geothermal well, located near the apex of the Pinarova
geological feature. Kezer-1 reported strong oil shows throughout the Hoya and
flowed heavily oil-cut fluids to surface on a short open-hole geothermal test.
Kezer-1 was deemed unsuitable for geothermal purposes and abandoned. Both new
and legacy seismic data also show a series of vertically stacked seismic
amplitude anomalies within the core of Pinarova's Hoya structure, possibly
directly indicating hydrocarbons and/or the development of good reservoir
within the Hoya.

The Company and its joint partner Aladdin Middle East ("AME") consider
Pinarova to offer similar potential success case outcomes to a Basur-4
appraisal well, but at a much lower drilling cost (c. $0.66 million gross
versus c. $4.12 million gross) and with a shorter time to execution and
delivery.

Pinarova-1 will, therefore, be designed to test if light oil is present in
commercially viable saturations and quantities within the Hoya and, if
successful, will be completed as a pumped oil production well. If successful,
Pinarova-1 would likely be followed by a Pinarova-2 well and/or a Basur-4
appraisal well drilled from a new site west of Basur-1 (see below).

Basur oil discovery update

 

Analysis of the new Phase 2 seismic data also supports the directors' belief
that the Basur structure extends more westwards than first mapped and can now
be better appraised from a newly identified site, 1 km west of the Basur-1 oil
discovery. The new site will enable the core of the Basur discovery to be
reached and appraised with reduced horizontal deviation than from the Basur-3
site, and without the need to drill through the major NW-SE thrust fault zone
immediately to the south. The new location thus removes the potential lost
circulation, stuck pipe and significant cost overrun risks associated with
drilling through the heavily fractured limestones within the thrust-fault
zone. The new site will, however, require a new pad and longer access track to
be constructed.

Stephen Sanderson, Chief Executive, commented:

 

"Pinarova's prospectivity, potential success case volumes and modest drilling
costs make it an attractive short-fuse project worth pursuing. We are actively
supporting our operator AME to get Pinarova-1 drilled as soon as practicable
in 2023 and, if successful, either Pinarova-2 and/or a Basur-4 appraisal well
drilled from a new site 1 km west of the Basur-1 discovery."

Qualified Person's Statement

 

Matt Cartwright, UKOG's Commercial Director, who has 39 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.

 

Glossary

 °API                       a measure of the density of crude oil, as defined by the American Petroleum
                            Institute
 discovery                  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
 geothermal well            a well designed to harness geothermal heat within the earth by transferring
                            heat from hot formation water at depth to surface via a borehole. The heat
                            transfer to surface can be via direct circulation of formation water to
                            surface (circulating loop) or via means of a heat pump within  the borehole
                            (closed loop).
 limestone                  a sedimentary rock predominantly composed of calcite (a crystalline mineral
                            form of calcium carbonate) of organic, chemical or detrital origin.
 lost circulation           occurs when drilling mud is lost into one or more geological formation due to
                            the presence of faults, fractures, or highly permeable layers.
 oil seep                   a natural flow of crude oil at or close to the earth's surface whose origin is
                            from a petroleum accumulation or oil source rock at depth.
 seismic amplitude          a measure of the seismic reflection strength at a given subsurface interface
 seismic amplitude anomaly  a seismic amplitude that is either higher or lower than the general amplitudes
                            seen elsewhere at the same geological interface
 shot hole                  a shallow borehole in which a small amount of explosive is detonated in order
                            to generate a seismic signal
 stuck pipe                 a situation where the drill string becomes stuck in the borehole requiring
                            specialist equipment and techniques to recover it to surface or for a
                            mechanical sidetrack to drill around the stuck pipe.
 thrust fault               a type of fault that forms in areas where the earth's crust is under
                            compression such as in orogenic (mountain) belts and where the upper block
                            moves up and over the lower block.

 

For further information, please contact:

     UK Oil & Gas PLC
     Stephen Sanderson / Allen D Howard                    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

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.

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