UK Oil & Gas PLC (London AIM: UKOG), is pleased to announce that aggregate test production from the Portland reservoir at the Horse Hill oil field, in which the Company has a 50.635% majority interest, now exceeds 10,000 barrels (“bbl”).
The continuous Portland dry oil flow (i.e. oil with zero water content), at a stable daily average rate of over 220 barrels per day (“bopd”), forms a key part of the schedule of works required to finalise the Portland field development plan and to the targeted establishment of permanent long-term Portland production by end 2019.
The Horse Hill-1 (“HH-1”) well and surrounding highly prospective licences PEDL137 and PEDL246 are operated by UKOG’s subsidiary Horse Hill Developments Ltd.
For prudent reservoir management purposes, the average test production rate from the Portland section has been maintained below the previously reported 362 bopd calculated optimised sustainable rate.
Rig tender documents have also been issued to contractors for the drilling of the HH-2 Portland and HH-1z Kimmeridge horizontal appraisal/production wells and for which planning and environmental permits are in place. Drilling is targeted to start in spring 2019.
HH-1 test production is planned to continue until the completion and testing of the new HH-2 Portland well.
Further details of extended well test (“EWT”)results to date are summarised below.
Horse Hill 2018-19 EWT Oil Production Milestones:
· Over 35,000 barrels (“bbl”) aggregate Kimmeridge and Portland oil production to date.
· Over 25,000 bbl total Kimmeridge oil production.
· Over 10,000 bbl total Portland production to date, flow continues.
· 165 tankers of crude exported primarily to Perenco’s Hamble oil terminal. The Portland’s 36° API Brent quality crude containing zero produced water, continues to be sold at prevailing Brent crude oil prices, less a small deduction for handling and marketing.
Stephen Sanderson, UKOG’s Chief Executive, commented:
“The Portland’s continued excellent production performance, particularly from a non-optimised vertical well, provides building confidence that the previously reported 720-1,080 bopd horizontal well production targets are increasingly attainable. The recent rig-tender exercise also means we remain fully on track to begin the first horizontals in Spring, with long term production testing of both wells planned to follow directly afterwards. This programme puts UKOG in a strong position to deliver real growth and positive cash flow in the near future.”
Qualified Person’s Statement
Rob Wallace, UKOG’s principal technical advisor, who has over 40 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Wallace is a Chartered Scientist, Chartered Geologist and Fellow of the Geological Society of London, an active member of the American Association of Petroleum Geologists, a member of the Petroleum Exploration Society of Great Britain and a member of the South African Geophysical Society.
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