Extended Well Test (“EWT”) Update: Kimmeridge oil flows continuously to surface
Horse Hill-1 (“HH-1”) Portland and Kimmeridge Oil Discovery, Weald Basin, UK
UK Oil & Gas PLC (London AIM: UKOG) announces that Horse Hill Developments Ltd (“HHDL”), a UKOG subsidiary company and the operator of the HH-1 Kimmeridge Limestone and conventional Portland Sandstone oil discovery, has informed the Company that the Kimmeridge Limestone 3 (“KL3”) EWT programme has recorded sustained light, sweet, 40-41° API crude oil flow continuously and naturally to surface over the past 50 hours at sustained rates significantly exceeding those recorded during the KL3 short flow test programme in 2016. HH-1 is located in licence PEDL137 in which UKOG holds a 46.735% beneficial interest. Key EWT results to date are summarised below:
· KL3 EWT flow sequence commenced ahead of planned KL4 test.
· KL3 flowed 40-41° API continuously and naturally to surface (i.e. without any pump) over a 50 hour initial planned oil flow period. Oil flow initiated instantaneously with minimal pressure “draw-down”. First planned 24-hour shut-in and pressure build-up test (“PBU”) now underway.
· Sustained continuous oil rates of between 563 and 771 barrels of oil per day (“bopd”) on 36/64 and 38/64 inch choke, respectively, recorded over last 24 hours through test separator. Gas rates up to 186,000 cu ft per day measured through enclosed flare. Flow sustained at constant stable bottom hole pressure.
· Recorded sustained rates significantly exceed the 464 bopd over a short 7.5-hour total flow period reported in 2016.
· Initial well productivity index of between 1.4 to 2.5 bpd/psi is around twice that seen in 2016 KL3 test.
· To date four tankers of KL3 crude have been exported to Fawley refinery.
· Zero formation water produced. Metered associated water rates of 52 barrels per day (“bpd”) decreasing to 14 bpd (i.e. 9% decreasing to 2%) in the past 24 hours. Produced water consists wholly of returned heavy completion brine. Well continues to “clean-up” with decreasing water content.
· Simultaneous pressure data recorded in overlying KL4 is indicative that KL3 and KL4 are one single connected oil pool with an implied minimum vertical extent of 358 ft.
· Further updates to be provided in due course following completion of the ongoing PBU test, further well clean-up, flow stabilisation, downhole oil sampling and further pressure build up tests.
· The KL4, which flowed at a reported rate of 901 bopd over a 4-hour period in 2016, will be flow tested after completion of the current KL3 EWT.
Stephen Sanderson, UKOG’s Chief Executive, commented:
“I am delighted to have witnessed first-hand the resumption of significant continuous and sustained oil flow from the Kimmeridge at Horse Hill. Whilst it has been a long wait since the successful 2016 flow tests, it has been made more momentous by the Kimmeridge’s significantly increased performance and productivity.
Whilst these are early days in the planned KL3 EWT sequence, with the well still “cleaning-up”, the continuous and sustained high oil rates can only be seen as highly encouraging for the overall EWT objective of establishing the commerciality of the Kimmeridge. The Directors consider that these positive KL3 test results now make it increasingly likely that both the Kimmeridge and Portland oil pools are set to make Horse Hill one of the UK’s leading onshore producing oil fields. Permanent production at Horse Hill is targeted in 2019. I look forward to the continuing news flow from the remainder of the KL3 test and the final KL4 EWT.”
Qualified Person’s Statement
Matt Cartwright, UKOG’s Chief Operating Officer, who has over 35 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Cartwright is a Chartered Engineer and member of the Society of Petroleum Engineers.
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