UK Oil & Gas Investments PLC (London AIM: UKOG) is pleased to announce that light, sweet crude oil and hydrocarbon gas continues to flow from the Kimmeridge Limestones at its 100% owned Broadford Bridge-1z (“BB-1z”) exploration discovery, located in licence PEDL234. BB-1z flow continues to clean up, demonstrating an increasing oil cut, together with sustained periods of associated gas flaring.
The shrouded flare stack has been in daily operation, exhibiting a clean burn of methane and wet gases delivered from the test separator. Oil samples have been dispatched for crude assay and for specialised geochemical analysis in the UK and USA. Flow testing continues.
· Broadford Bridge-1z (“BB-1z”) continues to flow light sweet oil and gas from the Kimmeridge Limestones.
· Flow continues to clean up, demonstrating an increasing oil cut, together with sustained periods of associated gas flaring. The shrouded flare stack has been in daily operation, exhibiting a clean burn.
· Flowing Kimmeridge light oil and associated gas at both BB1-z and Horse Hill-1 (“HH-1”) proves Kimmeridge contains a thick regionally extensive continuous oil accumulation.
· Optimised sequential flow testing of multiple 30-100ft zones planned to commence by end October 2017.
As previously reported, BB-1z was deliberately drilled in a location where no conventional hydrocarbon trapping mechanism within the Kimmeridge reservoir section is evident. Therefore, in the Company’s opinion, the presence of flowing, light Kimmeridge oil and associated solution gas at BB-1z provides proof that the Kimmeridge at BB-1z contains a significant continuous oil deposit of around 1400 ft gross vertical thickness.
The near identical Kimmeridge reservoir parameters and geology seen at BB-1z and the Horse Hill-1 (“HH-1”) Kimmeridge oil discovery, in which the Company holds a 32.435% interest, some 27 km to the northeast, demonstrates that the Kimmeridge oil accumulation is also laterally extensive across the Central Weald Basin.
UKOG, as the largest licence holder in the Kimmeridge oil accumulation’s prospective area is well positioned to exploit this extensive oil resource.
The Company will now press on immediately with the revised rig-less test plan to establish whether the extensive connected natural fracturing seen in BB-1 and BB-1z can flow oil in commercial rates and volumes.
Upon delivery of further testing equipment, scheduled for the end of this week, the current completion assembly will be removed and, as previously announced, a more finely focussed and optimal test plan implemented. The planned programme is as follows:
· Firstly, proceed ahead to isolate, acid-wash and sequentially flow test multiple 30-100 ft existing perforated zones in the naturally-fractured KL1-KL4, and then;
· Perforate further naturally-fractured limestone reservoir zones in the KL1, KL2 and KL3, isolate, acid-wash and sequentially flow test multiple 30-100 ft zones, and finally;
· Conduct a short cement squeeze in a section of the KL4/KL5, run a new cement bond log, re-perforate the newly cemented section, isolate, acid wash, and sequentially flow test multiple 30-50 ft zones.
· Flow will be initiated throughout the programme via the use of nitrogen-lift (without coil tubing), swabbing and/or pumping via the existing high-capacity linear rod pump
Testing is planned to continue until mid-December 2017.
Stephen Sanderson, UKOG’s Executive Chairman, commented:
“In the Company’s view, the volume and nature of the oil and gas recovered to date from the Kimmeridge proves that BB-1z contains a continuous oil accumulation some 1400 ft thick. The near identical reservoir characteristics seen at both BB-1z and HH-1, some 27 km apart, show this accumulation is laterally extensive over much of the Weald Basin. UKOG as the largest licence holder in the basin is in a prime position to exploit this resource.
This proof of geological and scientific concept is a major achievement and has significant positive implications for the prospectivity of PEDL234 and our extensive licence holdings in the Weald. Our focus now moves to delivering further proof that BB-1z can deliver both commercially viable rates and volumes of oil to surface.
The test results to date are technically significant and highly encouraging and I am confident that the more finely focussed and optimised testing plan can establish 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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