UK Oil & Gas Inv PLC (AIM:UKOG) Drilling Update at Broadford Bridge-1

 

Fractures, Live Oil Seeps, Shows in Kimmeridge Limestone KL2-KL4 Cores at Broadford Bridge-1 Exploration Well, PEDL234 Licence, Weald Basin, UK

Highlights

·      Conventional coring programme successfully executed, 13 cores totalling 554 ft recovered

·      12 continuous cores totalling 493 ft taken through KL3-KL4 fractured limestone and shale reservoir section, one 61 ft core taken in KL2 reservoir target

·      Mobile light oil seeps and oil staining at top KL4. Elevated wet gas readings and oil recovered from drilling fluid throughout cored interval from 4018 ft to base KL2 at 4779 ft measured depth (“MD”), a total possible gross oil-bearing zone of 761 ft MD. KL1 not yet reached

·      Kimmeridge geological section and observed wet gas readings near identical to Horse Hill-1 KL3 and KL4 oil discovery 27 km to NE, where oil flowed at 1365 bopd from KL3 and KL4

·      Significant lost-circulation zones at top KL3 and base KL2 indicate presence of well-developed and spatially connected natural-fracture system; abundant fractures in limestone and shales observed throughout cores

·      Now drilling ahead to KL1 target expected at around 5100 ft MD. Electric logging and flow testing to follow shortly

UK Oil & Gas Investments PLC (London AIM and NEX: UKOG) is pleased to announce that it has successfully completed an extensive conventional coring programme at its 100% owned Broadford Bridge-1 (“BB-1”) exploration well located in licence PEDL234. 13 cores totalling 554 ft were successfully recovered throughout the Kimmeridge Limestone 2 (“KL2”), KL3 and KL4 naturally fractured reservoir target zones. Coring operations were carried out by ALS Corpro, globally recognised experts in this specialised sector.

Early core samples: oil saturated Kimmeridge Limestones

Twelve continuous cores, totalling 493 ft, were taken to capture the entire KL3 and KL4 reservoir target zones. The continuous cored section includes a series of interbedded limestones and shales above the KL4 reservoir zone and a complete section of highly organic-rich black calcareous shales and thin limestones lying between KL3 and KL4. A single 61 ft core was recovered over the entire KL2 reservoir target, the first core through this section in the UK.

The cored and drilled section to date indicates that the Kimmeridge geological section at BB-1 is, based on data collected from the well to date, almost an exact mirror image of the Company’s Horse Hill-1 (“HH-1”), oil discovery well, 27 km to the NE (UKOG interest 31.2%).

As previously reported, mobile light oil was observed seeping from fractured KL4 calcareous shales and limestones within the upper section of the KL4. Mobile light oil was also consistently recovered from the drilling fluid or “mud” throughout the cored and drilled section from 4018 ft MD to 4779 ft MD (761 ft), the current depth just below the base of KL2. Wet gas readings were recorded throughout the cored interval, further indicating the presence of oil within the section. Wet gas readings consistently mirrored those seen in the HH-1 KL 3 and KL4 oil discovery well, 27 km to the NE, which flowed oil at a stable aggregate rate of 1365 barrels of oil per day.

The combination of direct and indirect oil indications observed is strongly indicative that the well has encountered a total possible gross oil-bearing zone of 761 ft MD. It should be noted that as the deeper KL1 reservoir target, lying around 300 ft below KL2, has not yet been reached, it is possible that the gross possible oil-bearing section could further increase.

Abundant fractures were seen in both limestones and calcareous shales throughout the core. Oil was seen seeping from several fractures in the upper cored section. Two significant lost circulation zones (“LCZs”) were observed whilst coring.

The LCZs encountered demonstrate that the BB-1 Kimmeridge section contains a well-developed and spatially connected natural fracture system. Evidence of natural fracturing from HH-1, the recent Brockham X4z and Balcombe-1&2 wells (in which UKOG has no interest) support the Company’s hypothesis that the Kimmeridge limestones and shales are fractured on a basin-wide scale within the Weald.

Conclusions to Date

The initial observed presence of mobile oil in fractured Kimmeridge limestone and shale at BB-1, possibly over a 761 ft plus vertical section, lying within a geological feature without any observed conventional structural or stratigraphic trapping configuration, is in the Company’s opinion supportive that the well provides “proof of concept” that the Weald contains a significant continuous oil deposit.

The observant on that the Kimmeridge geology and hydrocarbon shows at BB-1 are near identical to the HH-1 oil discovery, 27 km to the NE, provides further supporting evidence that both wells may penetrate the same oil accumulation.

The significant vertical gross oil-bearing section within both fractured limestones and shales at BB-1 also likely supports the HH-1 flow test conclusions that oil production was derived from a much larger reservoir “tank” than the two individual KL3 and KL4 limestone units tested.

Forward Operations

The well is now drilling ahead towards the remaining KL1 objective and then to its planned total measured depth of around 5740 ft. Following completion of the drilling an extensive electric logging and formation imaging programme will commence. The logging programme will be carried out by Schlumberger, a global leader in the field. Logging and well completion, expected to be completed over the next few weeks, will be followed by an extensive flow testing programme.

Stephen Sanderson, UKOG’s Executive Chairman commented:

“The highly successful coring programme continues to provide supporting evidence that BB-1 has possibly encountered an extensive oil-filled natural fracture network, sitting within both the Kimmeridge Limestones and oil generative Kimmeridge shales.

The observed light mobile oil, together with the indications of a possible thick gross oil zone within a geological feature without any conventional oil trapping configuration, provides further “proof of concept” that the Kimmeridge of the central Weald may contain an extensive, thick, continuous oil deposit. This is an important milestone for the Company.

I look forward to the following electric logging and flow test programmes, which will hopefully provide both further “proof of concept” and demonstrate the commerciality of BB-1.”

About BB-1

BB-1 is located near Billingshurst, West Sussex, within the 300 km² PEDL234 licence, in which the Company has a 100% interest via its ownership of the licence’s operator, Kimmeridge Oil & Gas Limited (“KOGL”). The well, an exploration step-out, is designed to penetrate four naturally fractured Kimmeridge Limestone units (KL1-KL4), the uppermost two units of which flowed at record rates in the Horse Hill-1 discovery near Gatwick Airport. 

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.

UK Oil & Gas Inv PLC (AIM:UKOG) Unaudited results for the six-month period ended 31/3/17

 

 

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