Acquisition of a Further Interest in Onshore Licence PEDL143,
Holmwood-1 Kimmeridge & Portland Exploration Prospect, Weald Basin, UK
UK Oil & Gas Investments PLC (London AIM: UKOG) is pleased to announce that it has agreed to acquire a further 10% interest in Licence PEDL143 (“the Licence”) from Warwick Energy Exploration and Production Limited (“Warwick”). Upon completion, the Company will hold a 40% interest in the Licence, which is currently operated by Europa Oil & Gas Limited.
The Licence, covering an area of 91.8 km2, contains the Holmwood prospect, which provides a near -term opportunity to test Kimmeridge, Portland and Corallian reservoir targets lying within a look-alike geological feature to both the Company’s Horse Hill-1 (“HH-1”) oil discovery, located some 8.5 km to the east, and the Broadford Bridge-1 and 1z discovery located some 24 km to the south. As previously reported on 21 March 2016, HH-1 flow tested at a significant commercial aggregate stable dry oil rate of 1,688 barrels of oil per day from the two uppermost Kimmeridge Limestone units and the overlying Portland.
Planning consent from Surrey County Council is in place to drill and flow test the Holmwood-1 exploration well, which is now scheduled for the coming winter season.
For a Purchase Price of £750,000, the Company will receive Warwick’s 10% working interest in the Licence. The total Purchase Price is payable via the issue to Warwick of 9,382,271 new ordinary shares in UKOG with an effective date of 22 September 2017. Completion of the acquisition is conditional upon the Oil and Gas Authority’s usual regulatory consent. Upon completion, the Company’s Holmwood-1 farmout obligation to Warwick will cease.
A further announcement will be made upon completion.
Stephen Sanderson, UKOG’s Executive Chairman, commented:
“This acquisition is another step in UKOG’s strategy to further consolidate and increase its holdings in the Kimmeridge oil play. The forthcoming Holmwood well provides a valuable near-term opportunity to test a geological look-alike of both our Broadford Bridge and Horse Hill oil discoveries, and which can hopefully provide further proof of the new Kimmeridge play concept. The significant overlying Portland target also provides additional low-risk potential reserve upside. We look forward to the well’s spud in the coming winter and the valuable information it will provide for our quest to monetise the Company’s Kimmeridge and Portland oil.”
Qualified Person’s Statement:
Stephen Sanderson, UKOG’s Executive Chairman, who has over 35 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Sanderson is a Fellow of the Geological Society of London and is an active member of the American Association of Petroleum Geologists.
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