UK Oil & Gas PLC (LON:UKOG) Horse Hill-1 Production Test Update

Horse Hill-1 production hits 60,000 barrels via the new Phase 2 Kimmeridge test

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that in preparation for the late summer start of the Horse Hill-2/2z (“HH-2/2z”) Portland drilling programme, test production was switched successfully from the Portland to the deeper Kimmeridge oil pool.

 

 

From 6th July to date, the Phase 2 Kimmeridge test has produced a further 5,524 barrels (“bbl”) of dry Brent quality oil. Total aggregate Portland and Kimmeridge test oil production from the Horse Hill oil field, in which the Company has a 50.635% majority interest, now totals a significant landmark of 60,186 barrels (“bbl”).

Kimmeridge oil flow was re-established at initial half-hourly metered rates of up to 332 bbl of oil per day (“bopd”), with continued stable production of dry oil at daily rates of 200-266 bopd. Total Kimmeridge production to date now exceeds 30,618 bbl with no apparent produced formation water. Following a 5-month shut-in, flow rates and flowing bottom hole pressures appear more stable than during Phase 1 Kimmeridge testing.

Prior to the Kimmeridge production switch, which was necessary for the safe drilling and coring of HH-2/2z through the Portland reservoir, total aggregate Portland production reached 29,568 bbl, with HH-1 continuing to produce dry Portland oil at a stable rate of over 220 bopd. Preliminary Company analysis of the final Portland pressure build-up test indicates that the Portland connected oil volume accessed by HH-1 has significantly increased from 7-11 million bbl to 11-14 million bbl, a robustly commercial volume.

Kimmeridge test production is planned to continue throughout the drilling of HH-2/2z except for two short shut-ins to enable the moving of oil storage tanks and installation of the drilling rig. The drilling rig is now scheduled to arrive on-site following routine servicing after the completion of its current job.

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The Horse Hill oil field and surrounding highly prospective PEDL137 and PEDL246 licences are operated by UKOG’s subsidiary company Horse Hill Developments Ltd, in which UKOG holds a 77.9% direct interest.

Horse Hill 2018-19 EWT Oil Production Milestones:

· 60,186 bbl aggregate Kimmeridge and Portland oil production

· 29,568 bbl total Portland production

· 30,618 bbl total Kimmeridge oil production

· No discernible formation water produced from either reservoir

· Stable Portland test production has continued to prove more oil in the ground

· Kimmeridge flow resumed at more stable rates and flowing pressures after 5 months shut-in

Stephen Sanderson, UKOG’s Chief Executive, commented:

“The resumption of Kimmeridge oil flow at more stable rates than previously seen is welcome news for the Kimmeridge’s commercial future and further justifies the decision to conduct simultaneous Portland drilling and HH-1 Kimmeridge test production at the site. The successful production switch from Portland to Kimmeridge now paves the way for the expected late-summer arrival of the rig and the HH-2/2z Portland horizontal drilling and testing campaign.

The test results to date also signify that after a year of production testing, the simple non-optimised vertical HH-1 well remains capable of continuous production from both Portland and Kimmeridge zones at an aggregate rate of 450 bopd. Consequently, as a result of the test’s ongoing success, in the opinion of the Directors, the future potential for significantly higher rates from the Portland HH-2z horizontal together with production from the underlying Kimmeridge, therefore, remains an even more tangible, imminent and exciting prospect.”

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Qualified Person’s Statement

Matt Cartwright, UKOG’s Commercial Director, who has over 35 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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