UKOG Energy for Britain

HHDL’s focus for future activities in the Horse Hill licences (PEDL137 and PEDL246) is to carry out further extended well tests in the Kimmeridge Limestones and appraise the Portland oil discovery.

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.      

A Competent Persons Report conducted by Xodus in June 2015 indicated a Best estimate or P50 stock tank oil initially in place (OIP) 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 OIP for the Portland Sandstone

Limestone 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 up to six 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 OIP 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 suggest that a highly significant petroleum resource exists in the Weald Basin. The HH-1 well and licence area likely lies within the central Weald Basin “sweet spot” of Kimmeridge and Oxford Clay.

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 2016
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 1,688 bopd:

• The final Portland test of 323 bopd, over an 8.5-hour, period is the highest stable dry oil flow rate from any onshore UK Portland well. On further testing, with a larger pump, the rate doubled from the previously reported stable dry oil rate of 168 bopd. The Portland was produced at maximum pump capacity and showed no clear indication of depletion. It is likely that the rate can be further increased using a higher capacity downhole pump during the next planned test
• Proof that the Kimmeridge limestones contain significant volumes of moveable light oil that can be flowed to surface at commercial rates
• As previously reported, the stable, natural dry-oil flow rate of 464 bopd from the Lower Kimmeridge Limestone is the first ever flow from this rock unit in the Weald Basin and onshore UK
• Based on the analysis of published reports from all significant UK onshore discovery wells, the Company concludes that the well’s 1,688 bopd is likely to be the highest aggregate stable dry-oil flow from any onshore UK new field wildcat discovery well
• Based on the analysis of published reports from all significant UK onshore discovery wells, the Company concludes that the 901 bopd from the Upper Kimmeridge zone is the highest stable natural dry oil flow rate from a single reservoir in any UK onshore new field wildcat discovery well
• High quality Brent Crude produced: light, sweet oil (40 degrees API in Kimmeridge, 35-37 degrees API in Portland) 1,940 barrels delivered to the Esso Fawley refinery
• Preliminary analysis confirms that the Lower and Upper Kimmeridge Limestone units are naturally fractured reservoirs with high deliverability
• Strong possibility for further optimisation and increased flow rates from all 3 zones in future development and production wells, particularly through the use of horizontal wells.

Summary Table of Test Results