UK Oil & Gas PLC (LON:UKOG) HH-2z Completed as Horse Hill’s First Future Horizontal Oil Production Well

Stephen Sanderson, UKOG’s Chief Executive, commented: “Horse Hill’s first optimally placed horizontal is now poised to enter its next key phase, the eagerly anticipated flow testing campaign.

We remain confident that the 2,500 ft of permeable Portland sweet-spot reservoir section, 70 times that seen in HH-1, can deliver significant rates. We look forward to safe and successful EWT operations over the coming months.”

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that its Horse Hill-2z (“HH-2z”) Portland horizontal well (UKOG 85.635% net controlling interest) has been completed and temporarily suspended as a future oil-production well. HH-2z is now ready to enter into the planned extended well test (“EWT”) campaign. EWT operations are expected to start in early December, once the rig has left the site.

Following displacement of drilling fluids to clean completion brine, well completion operations included: the installation of 4.5″ diameter slotted steel liner, production tubing, a high-capacity/high-rate downhole electric submersible pump (“ESP”) and a new wellhead. Immediately following rig departure, HH-2z flow lines and ESP control cables will be connected, and the site’s oil stock-tank storage capacity will also be significantly increased.

To permit safe operations during the HH-2z rig-down operation, HH-1 Kimmeridge EWT production has also been temporarily shut in. Oil production from the HH-1 EWT has continued throughout HH-2/2z drilling and is planned to resume in parallel with the HH-2z EWT. Total HH-1 test production now stands at over 78,844 barrels (“bbl”), with over 49,276 bbl from the Kimmeridge oil pool.

HH-2z Summary

The HH-2z drilling campaign successfully delivered approximately 2,500 ft of horizontal trajectory wholly within the Portland reservoir’s most oil productive zone or “sweet-spot”. The gross thickness within the sweet spot is approximately 70 times greater than in the HH-1 Portland vertical discovery well.

READ
Oil Man Jim Company Oil & Gas Podcast, 20th November 2019

The significantly increased exposure to the sweet-spot within HH-2z, the first horizontal well in the field’s Portland oil pool, is the prime technical enabler for HH-2z to be capable of delivering significantly greater flow rates than those seen in the HH-1 vertical well.

Preliminary HH-2z electric log analysis suggests the horizontal trajectory has penetrated good to excellent reservoir quality and high oil saturations throughout the 35 ft thick sweet-spot zone. The drilling fluid density required whilst drilling the horizontal is also strongly indicative that HH-2z has penetrated an area of the Portland oil pool with significantly lower pressure depletion than expected, a positive indication for possible larger connected oil volumes than previously recognised.

HH-2z EWT Forward Plan

The HH-2z EWT testing programme will commence with a planned sequence of normal well “clean-up” operations, designed to ensure that the well can deliver at its full production potential. The clean-up process will run in tandem with flow periods and pressure build up tests.

Once full clean-up is achieved, the well will be flowed over a minimum 90-day flow period to assess its stable production performance. Following the EWT, and subject to the necessary consents from the Oil and Gas Authority, it is planned to transition HH-2z and HH-1 seamlessly from test production into long-term stable oil production. Planning consent for long term oil production over 25 years was granted by Surrey County Council on 27 September 2019.

UKOG holds a controlling 85.635% interest in the Horse Hill oil field and surrounding highly prospective PEDL137 and PEDL246 licences, which are operated by UKOG’s subsidiary company, Horse Hill Developments Ltd.

READ
Oil Man Jim Company Oil & Gas Podcast, 24th November 2019

Qualified Person’s Statement

Matt Cartwright, UKOG’s Commercial Director, who has over 36 years of relevant experience in the global 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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