Markwells Wood

Licence number: PEDL126
UKOG interest: 100%

The Markwells Wood-1 discovery well was drilled in 2010. It is operated by UKOG’s fully-owned subsidiary UKOG (GB) Limited. The discovery is a conventional Jurassic Great Oolite limestone reservoir, the same as in the Horndean producing oil field (UKOG 10%), which is located 3 km to the west.

The well was tested over a 6-month period in 2011-12, producing 3,931 bbl of oil.

UKOG has applied to extend the Markwells Wood planning permission to 30 September 2016. Approval is expected shortly.

Xodus recently completed a Competent Person’s Report (“CPR”, or independent reserves review) for Markwells Wood, estimating Best Case (P50) STOIIP of 45.6 MMbbl and 2C Contingent Resources of 1.25 MMbbl. These Contingent Resources are based on a 5-well, multi-phase potential development.

Top reservoir map of the Horndean and Markwells Wood fields


Source: UKOG

Xodus also estimated in their CPR that, by redrilling the Markwells Wood-1 well as a horizontal lateral, the reservoir could produce 600,000 bbl of oil in a P50 (Best Case) over 40 years of production. The Horndean field has been in stable production since 1987 producing a gross total of 2.4 MMbbl to date.

UKOG has commenced work on a Markwells Wood Field Development Plan (“FDP”), which upon completion, will be submitted to the OGA for field development consent. UKOG will also use the FDP to help compile and submit an application to the South Downs National Park Authority for the necessary planning consent to drill the planned Markwells Wood-1 sidetrack.

Estimated Markwells Wood Gross STOIIP (Xodus CPR, September 2015)

Gross STOIIP (MMbbl)

Low (P90)

Best (P50)

High (P10)

Mean

Cornbrash

0.15

0.37

0.89

0.46

Interbedded Oolite

6.74

13.4

22.9

14.3

Upper Massive Oolite

13.8

22.4

35.0

23.6

Oncolite

0.36

0.98

2.09

1.13

Lower Massive Oolite

2.66

6.3

12.4

7.07

Markwells Wood Total

32.7

45.6

61.8

46.6

As UKOG owns 100% of Markwells Wood, successful development could potentially significantly increase production and cash flow to the Company. As noted by Xodus. important recoverable volume upsides could potentially exist above the current Xodus estimates should initial development be successful, with the potential to drill five production wells currently envisaged by Xodus in its 2C and 3C scenarios.

Estimated Markwells Wood Contingent Resources (Xodus CPR September 2015)

Oil Contingent Resources

Gross Volumes

Net UKOG Volumes

Risk Factor *

Operator

(MMbbl)

1C (low estimate)

2C (best estimate)

3C (high estimate)

1C (low estimate)

2C (best estimate)

3C (high estimate)

 

 

Markwells Wood

0.63

1.25

2.71

0.63

1.25

2.71

75%

UKOG (GB) Limited

* The Risk Factor (or estimated chance, or probability, that the volumes will be commercially extracted) was determined by Xodus to be 75% for these Contingent Resources, to reflect the remaining subsurface, operational, commercial and socio-economical risks related to the development and implementation of the full field, which will likely be significantly influenced by the results from the first horizontal production well

UKOG’s Notional Phased Field Development Plan

Source: UKOG

Xodus‘ Production Forecasts for Markwells Wood-1 Horizontal Sidetrack


Source: UKOG