UK Oil & Gas PLC (LON:UKOG) Portland Oil Production now exceeds 20,500 barrels

Horse Hill-1 Production Test Update

 

 

Stephen Sanderson, UKOG’s Chief Executive, commented:

“The Portland test programme continues to exceed our technical expectations with dry oil production now exceeding 20,500 bbl. Our overall testing costs have also been significantly offset by the associated sales revenues. Moving forwards, we now expect to exceed 25,000 bbl Portland test production before the HH-1 test is switched back to the Kimmeridge to facilitate the drilling of HH-2.

 

 

Horse Hill-1 Production Test Update

Portland Oil Production now exceeds 20,500 barrels

 

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that, following a successful week-long pressure build-up test (“PBU”), the aggregate total Portland oil production at the Horse Hill oil field, in which the Company has a 50.635% majority interest, now exceeds 20,500 barrels (“bbl”). The Portland continues to produce at a stable rate of over 220 barrels of dry oil per day (“bopd”) at a modest reservoir pressure draw-down. No formation water has yet been produced to surface.

The latest PBU yielded significantly better than expected results, with little or no apparent pressure depletion compared to the last PBU in early April. The potential positive impact on connected oil in place will therefore be thoroughly evaluated and reported in due course.

The successful Portland and Kimmeridge extended well test (“EWT”) programme has now produced an aggregate volume in excess of 45,500 bbl to date, with a landmark target of 50,000 barrels set to be achieved over the coming month and prior to the start of the forthcoming horizontal well campaign. In order that the HH-2 Portland well can be drilled, the current plan envisages that once HH-1 Portland test production exceeds 25,000 bbl, production will be switched back to the Kimmeridge oil pool.

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Oil Man Jim Company Oil & Gas Update’s 13th October 2019

For prudent Portland reservoir management purposes and to ensure there is no detriment to the expected high performance of the HH-2 Portland horizontal well, the average pumped rate from HH-1 continues to be maintained below the previously reported 362 bopd calculated sustainable rate. As previously stated, based upon well-established reservoir engineering metrics, it is expected that HH-2 has the potential to achieve a rate of 2-3 or more times the HH-1’s vertical rate of 362 bopd.

Following a successful tender process, the Company is now finalising contracts for the forthcoming drilling campaign and preparations are now well advanced for simultaneous test production and horizontal drilling operations at Horse Hill.

The HH-1 well and surrounding highly prospective PEDL137 and PEDL246 licences are operated by UKOG’s subsidiary Horse Hill Developments Ltd in which the Company holds a 77.9% direct interest.

 

Further details of EWT results to date are summarised below.

 

Horse Hill 2018-19 EWT Oil Production Milestones:

· Over 45,500 bbl aggregate Kimmeridge and Portland oil production to date.

· Over 25,000 bbl total Kimmeridge oil production.

· Over 20,500 bbl total Portland production to date, flow continues.

· 213 tankers of crude exported primarily to BP’s Hamble oil terminal. The Portland’s 36° API Brent quality crude, containing zero produced water, continues to be sold to Perenco at prevailing Brent crude oil prices, less a small deduction for handling and marketing.

 

 

Stephen Sanderson, UKOG’s Chief Executive, commented:

“The Portland test programme continues to exceed our technical expectations with dry oil production now exceeding 20,500 bbl. Our overall testing costs have also been significantly offset by the associated sales revenues. Moving forwards, we now expect to exceed 25,000 bbl Portland test production before the HH-1 test is switched back to the Kimmeridge to facilitate the drilling of HH-2.

READ
Weekly Oil and Gas Highlights, 20th October 2019

The recent extensive pressure build-up also indicates HH-1 is likely connected to a larger oil volume than previously recognised. Further Portland test data will now be collected and analysed before the HH-2 drilling campaign to confirm this important development.

The Horse Hill oil field and its associated significant future cash flow stream is of paramount importance to UKOG and will, therefore, continue to be the Company’s prime short-term focus. In this respect, we remain on track to commence drilling HH-2 as previously reported.”

 

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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