Horse Hill 2018

Preparatory civil works, including the relaying of the well pad surface and installation of a new site fence, have been completed at Horse Hill as Horse Hill Developments Ltd prepare to return to the site for further operations in the near future. We will endeavour to keep you updated on a regular basis, but we thought this information sheet would help you to understand what we are planning to do.

1.  Planning Permission was granted by Surrey County Council (SCC) in November 2017 for:

  • The retention of the existing exploratory well site and vehicular access onto Horse Hill;
  • The appraisal and further flow testing of the existing borehole, Horse Hill-1 (HH-1) for hydrocarbons, including the drilling of a (deviated) sidetrack well and flow testing for hydrocarbons;
  • Installation of a second well cellar and drilling of a second (deviated) borehole, Horse Hill-2 (HH-2) and flow testing for hydrocarbons;
  • Site preparation including erection of security fencing on an extended site area, modifications to the internal access track, installation of plant, cabins and equipment, all on some 2.08ha, for a temporary period of three years, with subsequent restoration to agriculture and woodland.

The Environment Agency (EA) has granted the necessary permits to enable HHDL to carry out extended flow tests at HH-1, store any produced oil, drill and test both a sidetrack from the existing HH-1 well and new borehole HH-2.

2. The Horse Hill well site (located in licence PEDL137) is operated by Horse Hill Developments Ltd (HHDL).

3. The HH-1 Kimmeridge Limestone and Portland Sandstone oil discovery well is located on the northern side of the Weald Basin, 3km north of Gatwick Airport. Two naturally-fractured limestone members within the Kimmeridge section, known as KL3 and KL4, flowed dry, 40 degrees API oil, at an aggregate stabilised natural flow rate of 1,365 barrels per day ("bopd") with no clear indication of depletion.

The overlying Portland Sandstone flowed dry, 35-degree API gravity oil at a stable pumped rate of 323 bopd. The Portland oil was produced at the rod-pump's maximum achievable rate and thus flow was constrained by the pump's mechanical capacity.

4. The Horse Hill appraisal programme is separated into four phases:

  • Phase 1 (210 days) – the carrying out of extended well tests (EWT’s) and a short-term well test of the existing HH-1 well to appraise the technical and commercial viability of the hydrocarbon accumulations discovered. Each of the well tests will involve flowing, pumping (as required) and pressure testing with the purpose of evaluating the characteristics of the oil resource that was discovered during the original exploration of HH-1;
  • Phase 2 (100 days) – this is dependent on the outcome of Phase 1 and may in practice follow Phase 3 below; it involves the drilling of a deviated sidetrack from the existing HH-1 borehole. This will be followed by the carrying out of an EWT;
  • Phase 3 (110 days) – this is also dependent on the outcome of Phase 1 and involves the drilling of a new appraisal well Horse Hill-2 (HH-2) from the existing well pad. This will again be followed by an EWT.
  • Phase 4 (45 days) - restoration of the well site to agriculture and woodland, unless a new planning application is submitted.

If the appraisal programme demonstrates commercial viability, HHDL intends to submit a further planning application for a production phase in due course.

5. Horse Hill will be drilled to the following approximate vertical depths: Portland 623m, KL4 840m and KL3 910m. The well will use safe, tried and tested conventional oil field techniques, approved by the EA and as used at Broadford Bridge, Singleton and Storrington in West Sussex and Wytch Farm in Dorset.

6. The Kimmeridge Limestone rock intervals are extensively naturally-fractured in HH-1, enhancing the rock’s ability to enable oil to flow into a well at good rates. Consequently, the well does NOT require the use of the unconventional oil-field process of massive hydraulic fracturing, commonly known as “fracking”. This natural fracture-system lies solely within the Kimmeridge rocks, which occur between a half and a little over three-quarters of a mile beneath the surface. It does not extend above the Kimmeridge rocks to the surface. This fact is proven by the 100+ conventional legacy wells drilled through the Kimmeridge rock formation in the Weald Basin and the absence of natural oil and gas seeps at surface in the basin.

7. Our drilling activity will have ZERO IMPACT on ground water or water supplies. Even though there are no potable drinking water sources underlying or surrounding the site, it is UKOG’s policy to use a water-based, non-toxic, biodegradable, zero-hazard, drilling fluid made from modified plant starches, to lubricate the drill bit during drilling through groundwater zones (usually those shallower than 300-400m). This drilling fluid is used by water well drilling companies in the UK, and is registered with the Centre for Environment, Fisheries and Aquaculture Science (CEFAS). It is also the only drilling fluid to be formally approved by the Department for the Environment, Food and Rural Affairs for use in drilling water wells for public water supply.

8. Horse Hill’s well pad is specifically designed and constructed to ensure that zero fluids, including rainwater, can discharge down into the ground beneath and adjacent to the site. The pad has five liquid containment systems to ensure ZERO DISCHARGE and complete isolation of surface activities from the underlying and surrounding ground, including; both a man-made impermeable membrane and an impermeable natural clay-layer underlying the entire well pad, a membrane-lined perimeter ditch, impermeable concrete well cellars and bunding of all storage tanks and chemicals. Even rainwater from the site is not discharged locally during operations but is collected by road tanker and sent to an EA approved disposal site.

9. Before any oil can flow into any well, the well will be completely isolated from the surrounding rocks by three sets of overlapping heavy gauge steel tubing (casings), which are bonded to the surrounding rock by hundreds of feet of impermeable concrete.

10. The largest number of vehicle movements is anticipated during the preparatory civil works at the site; these works and the related vehicle movements have been completed. This will be a maximum of 15-20 two-way HGV movements per day. During the drilling and well testing phases 5-10 two-way HGV movements per day are expected. The proposed increase in traffic, particularly HGV movements, would predominately be contained within a number of brief peak periods of the phased development.

11. There are many unfounded claims made about acidisation or acid-wash, which has been used safely in the global oil and water industry for 120 years, and for over 50 years throughout the UK. This technique has been safely used over many years in a limestone oil reservoir in the Wytch Farm oil field. At the Horse Hill well site, diluted hydrochloric acid will flow at low pressure via the cemented steel casings solely to the limestone oil reservoir rocks, lying between half to over three quarters of a mile beneath the surface. The dilute acid dissolves small amounts of the limestone (rocks comprised of calcium carbonate) within only a few metres or less of the well bore. This process enables the well bore to properly connect with the natural fracture system and permits greater fluid flow into the well bore. The reaction with the limestone neutralises the acid, forming water, calcium chloride (a natural component of sea water) and small volumes of carbon dioxide. The dilute acid (85% water, 15% hydrochloric acid) is similar in strength to that contained in domestic toilet bowl cleaners and lime scale removers. It is approximately half the concentration of the acid typically used by the public water supply industry when drilling water wells in limestone rocks. Note that the dilute acid is NOT forced into the well to artificially fracture the limestone.

12. The Horse Hill appraisal programme will directly employ around 30 full time staff, including 10-12 Surrey based office staff, together with an extensive direct and indirect supply chain within the south east of England and wider UK. The rig’s crew will also utilise accommodation, food, fuel and other supplies directly from Surrey. Site maintenance also uses local suppliers. We intend to utilise British-made steel for our well casing. In the success case, oil produced from the well will support the UK chemical industry, which currently employs around 40,000 people, as well as the UK oil refining industry.

HHDL is committed to paying 6% of gross revenues to the local community (including business rates to SCC). We are in discussions with the industry advisory body, UK Onshore Oil & Gas (UKOOG) and HMRC to finalise the details of this scheme.

Onshore oil and gas exploration and production is among the most regulated industries in the UK and, therefore, one of the world’s safest and environmentally rigorous sectors. In addition to the local mineral planning authority consent and conditions, our activities at Horse Hill are governed by the Environment Agency, the Health and Safety Executive and the Oil and Gas Authority.

Our daily lives in the UK currently require approximately 1.4 million barrels of oil per day for all our transportation (land, sea and air), all plastics and essential chemicals. Until such technologies become available to provide viable alternatives, we need oil and gas simply to survive. With the rapid decline in North Sea oil production, more than a third of this daily requirement is currently imported, and is estimated to rise to over two thirds by 2030. Imports require extensive carbon emitting transportation from around the globe without the added benefits of direct and indirect jobs, supply chain and tax contribution of indigenous oil.