UKOG Energy for Britain

Licence numbers: PEDL137 and PEDL246
UKOG interest: 85.635%

UKOG has an indirect interest of 85.635% in two Horse Hill area licences: PEDL137 and PEDL246. The operator of the licences is Horse Hill Developments Limited (HHDL) Click HERE to visit the HHDL website, in which UKOG has a 42% shareholding. Specific information relating to the Company’s ongoing evaluation of these assets can be found in the RNS section of the website.  HHDL has recently flow tested the Portland Sandstone and Kimmeridge Limestone intervals of the Horse Hill-1 (HH-1) oil discovery well.

HH-1 was drilled by HHDL in 2014. The well discovered oil in the Portland Sandstone, as well as in deeper formations including the Kimmeridge Clay, Oxford Clay and Liassic Shale. The well has penetrated and flow tested a significant new oil play in the Kimmeridge Limestone section, together with a potential shale oil play in the Kimmeridge Clay, Oxford Clay and Lias shales.

The Company’s focus for future activities in the licences will be to carry out further extended well tests in the Kimmeridge Limestones and appraise the Portland oil discovery.

HH-1 is located within PEDL137, on the northern side of the Weald Basin near Gatwick Airport. HHDL is a special purpose company that owns a 65% participating interest and operatorship of PEDL137 and the adjacent PEDL246.

Portland Discovery
The HH-1 Portland Sandstone discovery lies within an approximately 100-ft gross thick conventional Jurassic Upper Portland sandstone reservoir, within a 6km by 3km Late Cimmerian age tilted fault block structure and trap, as defined by 2D seismic. The crest of the Upper Portland oil discovery lies at approximately 1760ft true vertical depth subsea and most likely extends over a mapped maximum areal closure of approximately 2000 acres. The Upper Portland reservoir is productive at the nearby Brockham field, some 9km NNW, in which UKOG has an indirect interest of 3.6%, by virtue of UKOG’s 6% shareholding in Angus Energy.

A CPR conducted by Xodus in June 2015 indicates a Best estimate or P50 stock tank oil initially in place (STOIIP) of 21 million barrels (MMbbl) (Table 1). The OIP hydrocarbon volumes estimated should not be considered as either Contingent or Prospective Resources or Reserves.

Table 1: Xodus’ Estimation of Gross STOIIP for the Portland Sandstone

Limestone and Shale Oil Plays
Geochemical analyses of over 250 samples indicate that the HH-1 well penetrated a very thick 1500ft section of world-class, thermally mature, oil saturated source rocks in the Kimmeridge section. The source rock shales encase three Kimmeridge Limestones reservoir units. Further thermally mature shale source rock sections were encountered in the Oxford Clay and Lias shale sections.

Electric log analyses performed by Nutech, utilising all geochemical, and rock calibration points from the HH-1 well, strongly indicate that the Kimmeridge contains a potential oil pay section of over 300ft with a further 73ft of potential oil pay in the Oxford and Lias.

Nutech’s considerable global knowledge base and play library indicates that the Horse Hill Upper Jurassic rock sequence is potentially analogous to known oil productive hybrid reservoir sections of the Bakken of the US Williston Basin, the Wolfcamp, Bone Springs, Clearfork, Spraberry, and Dean Formations in the US Permian Basin and the Bazhenov Formation of West Siberia.

Further recent investigations also indicate that the Kimmeridge Limestones are likely analogous to the Austin Chalk in terms of permeability characteristics and the Eagleford in terms of an oil saturated self-sourcing tight limestone and calcareous shale reservoir unit.

Nutech and Schlumberger have estimated STOIIP for the HH-1 tight Jurassic shale and limestone units, as shown in Tables 2 and 3. Analysis of the wells surrounding and offsetting the Horse Hill licence area and the Company’s other assets in the Weald Basin suggest that a highly significant petroleum resource exists in the basin. The HH-1 and licence area likely lies within the central “sweet spot” of Kimmeridge and Oxford Clay oil in place development.

Table 2: Nutech’s Estimated Tight Jurassic Gross STOIIP for PEDL137 and PEDL246

Table 3: Schlumberger’s Summary of Estimated Gross STOIIP for PEDL137 and PEDL246

Flow Testing
In February and March 2016, HHDL carried out flow testing of the Portland and Kimmeridge limestone intervals of the HH-1 discovery well.

On 21 March 2016, UKOG reported that the final total aggregate stable dry oil flow rate from the two Kimmeridge Limestones plus the overlying Portland Sandstone was 1688 bopd: