Loxley
Licence no: PEDL234
UKOG interest: 100%
The Loxley gas field was discovered by Conoco in 1982 when they drilled the Godley Bridge-1 (GB-1) well.
The field is located just north of the South Downs, WNW of the town of Horsham in Surrey, UK. It comprises a west-east elongate anticlinal structure which is mapped as a 4-way dip closure.
In 1986 the GB-2 well was drilled and side-tracked to the GB-2z location; the Portland sandstone was found to be water wet. Also, in 1986 Conoco drilled the Alfold-1 well in PL203. The Alfold -1 well encountered Portland sandstone that was above an interpreted gas water contact but encountered tight sandstone and no gas was tested although it can be inferred to support the GWC by resistivity curves. Subsequently the block has been split into two licences PEDL 235 which is licenced to IGas Energy Plc and PEDL234 that is licenced to UKOG.
In April 2019 UKOG submitted a planning application to Surrey County Council (SCC) for drilling of the Loxley-1 well, which is intended to appraise the potentially significant GB-1 Portland gas discovery, located in the northwest of the licence, in a crestal location within PEDL234.
In October 2019, a Loxley permit application was submitted to the Environment Agency and subsequently granted.
Following SCC’s refusal of planning consent for UKOG’s Loxley gas project and UKOG’s appeal to the Planning Inspectorate, the Planning Inspectorate advised that the Secretary of State (SoS) for Levelling Up, Housing and Communities had recovered the appeal.
The Planning Inspectorate’s report recommending the appeal be granted was submitted to the SoS in March 2022 and the appeal determination by the SoS granted UKOG’s appeal, subject to conditions on 07th June 2022.
Planning and environmental consents for the Loxley gas project are now fully in place.
Technical and commercial planning for Loxley appraisal and subsequent development is now underway.
Work has commenced to discharge planning conditions for Loxley after which site construction plans can proceed. It is anticipated that site construction could commence before Q4 2023, with the drilling of Loxley-1 to follow thereafter.
UKOG were granted a two-year extension on their licence due to a prolonged planning consent process and the effects of the pandemic. Subsequently, UKOG has received approval from the North Sea Transition Authority (NSTA) for a revised Loxley work programme, meaning that in order to satisfy the licence's Retention Area programme, the drilling of their next well (Loxley-1) must now commence before 30th June 2024.
UKOG are currently a 100% interest holder in the PEDL 234 licence.
The Loxley-1 well is intended to be the first of two development wells within the PEDL 234 licence. Although the well will be designed and drilled as potential production well, it will still have an element of appraisal as it must first prove commercial flowrates are achievable which will depend on the height of the gas column and reservoir properties encountered.
Kappa Engineering supported a review of the previous 1983 Godley Bridge-1 well test which confirmed that the tested 1.3 MMscfd of gas was constrained by a high mechanical skin value on the well. This skin was likely caused by drilling damage. Analysis indicates that a zero skin well, achieved by improved drilling and completion practices, would provide gas rates of 15-18 MMscfd under the same test conditions.
An initial grid export study has been completed with network operator SGN for Loxley gas entry into the 38 bar Local Transmission System confirming a route for Loxley gas sales for a range between 10-30 MMscfd. Gas processing and facility cost studies have been completed.
RPS have been engaged to complete a Competent Persons Review for the Loxley discovery.
The Company intends to sell future Loxley gas for reforming into low-carbon blue hydrogen, entirely in accord with the low carbon ethos underpinning our new Portland hydrogen hub project. In addition, once Loxley is depleted of natural gas by around 2036, we are also investigating its use to store around 1 billion cubic metres of hydrogen, a further addition to the Company’s and UK’s much-needed future energy storage portfolio.
