Surrey’s would-be oil drillers claim that crude flows could gush from the Home Counties at triple the expected rate by next year – although not everyone is convinced.
By Jillian Ambrose, energy editor 18 October 2018
Fresh testing of an oil well near Gatwick has revealed that up to 1,000 barrels of oil could flow from Surrey’s sandstone layers every day, according to the company behind the plans.
UK Oil and Gas (UKOG) sparked a 6pc share price bounce by telling investors that its plans for the Portland oil licence are “commercially viable”.
Stephen Sanderson, UKOG’s chief executive, said by the end of this year it would apply to Surrey County Council for permission to begin commercial drilling in 2019.
However, experts have once again poured doubt on the latest round of claims from the company.
Ashley Kelty, an analyst with financial services group Cantor Fitzgerald, described the announcement as “spurious” and said it was “extremely unlikely” that UKOG would be able to recover as much of the oil reserves as it claims.
“The company has been saying that the Portland well is commercial for a while now, so this is probably more to keep the voracious appetite of the retail punters for news sated,” he said.
He added that a flow rate of 1,000 barrels of oil a day “seems a leap of faith” given the testing achieved only 360 barrels of oil a day.
UKOG has come under fire in the past for over-stating the potential of its oil plans in the Weald Basin near Gatwick Airport which it claims could hold billions of barrels of oil.
Shares in the company can be snapped up on the junior Aim market for as little as 2p, even after a flurry of buying on the market following the announcement.
The company is worth a fraction of its value last year when shares climbed to over 8p after the Environment Agency gave the go-ahead to drill the onshore licence to test its oil flows.
By Jillian Ambrose, energy editor 18 October 2018
