UK Oil & Gas Revised Flow Test and Workover Programme Planned

Broadford Bridge -1z Kimmeridge Limestone Discovery, PEDL234, Weald Basin, UK

UK Oil & Gas Investments PLC (London AIM: UKOG) is pleased to announce that it has recovered measurable volumes of light oil and solution hydrocarbon gas to surface from the Kimmeridge reservoir section during well clean-up operations, at its 100% owned Broadford Bridge-1z (“BB-1z”) exploration well, located in licence PEDL234.  The well has also free flowed for short periods during the well clean-up sequence in which spent completion fluids mixed with hydrocarbons were returned to surface. Well clean-up operations, utilising a high capacity linear rod pump, continue. Further developments will be reported in due course

To ensure that the flow testing of Kimmeridge reservoir zones is fully optimised, the Company will proceed ahead to workover the well and implement a revised testing programme.  The well clean-up operation will continue, then the current multi-zone completion assembly will be retrieved, the well worked over and flow tested sequentially over multiple, individual reservoir zones. Additional perforated zones will be added to the existing 1064 ft aggregate perforated section.

This operationally more flexible test operation will utilise a similar methodology to that successfully undertaken at the  Horse Hill oil discovery, albeit with a much-increased initial lifting capability. The rig-less test will involve both nitrogen lifting and pumping as permitted under BB-1z’s current regulatory consents.

The decision to workover the well follows receipt of two independent cement-bond analyses by Premier Oilfield Laboratories in Houston, USA and Xodus in the UK. These analyses, together with the Company’s own internal evaluation, demonstrate that the quality of the cement-bond over some of the reservoir zones within the current BB-1z well is less than optimal. The findings conclude that, due to the cement-bond condition over segments of the reservoir section, the current completion programme has not effectively connected the wellbore to much of the best open natural fractures. Therefore, the testing to date has not properly evaluated the full flow potential of the overall Kimmeridge reservoir sequence.

Rectifying poor cement bonding in a wellbore is standard oilfield practice and is carried out by squeezing further fresh cement slurry through new or existing perforations in the well’s heavy-gauge steel casing. Consequently, following the removal of the current BB-1z well completion assembly, the Company plans to carry out a short sequence of cement-squeezes through the 7-inch casing to rectify sections of the reservoir zone’s cement-bond.

Ongoing analysis of electric logs has also revealed further Kimmeridge reservoir zones of interest and these will be perforated and included in the new forward testing programme.

The cement-squeeze and new flow test programme is planned to commence upon the completion of well clean-up operations and delivery of the necessary equipment. The commencement of the programme will be announced in due course. 

Stephen Sanderson, UKOG’s Executive Chairman, commented:

The recovery of free, mobile light oil and solution gas to surface is significant and encouraging news and testament to the Kimmeridge Limestone reservoir’s ability to deliver hydrocarbons even from a less than optimal completion.  The periods of good natural flow and identification of additional prospective reservoir zones to flow test add further positive outcomes.

Although the forthcoming workover presents additional unplanned work, the reservoir zone’s cement-bond integrity is readily rectifiable by the planned short cement-squeeze phase, a common-place and routine oilfield practice. The well will then be restored to an optimal condition for further testing.

I am confident that the revised forward testing plan will be able to deliver the results that will help demonstrate BB-1z’s near term commercial viability.

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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