Loxley gas project: Xodus volumetric study confirms significant gas resource
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that a report from Xodus Group details that the area of the Loxley Portland gas discovery lying within its 100% owned and operated PEDL234 licence, is interpreted to contain a significant mean case gross gas initially in place (“GIIP” i.e. gas in the ground before any future production) of 49 billion cubic feet (“bcf”). The portion of GIIP estimated to be recoverable to surface via any future production, the mean gross recoverable resource, is cited as 34 bcf, representing an estimated recovery factor of approximately 70%.
Reported high case net PEDL234 GIIP and estimated high case recoverable resources are 76 bcf and 54 bcf, respectively.
As shown in Tables 1 and 2 below, approximately 78% of the overall Loxley gas accumulation’s gross mean GIIP and recoverable gas resource of 63 bcf and 44 bcf respectively, are interpreted to lie within the Company’s PEDL234 acreage.
In terms of recoverable gas resources, the calculated figures places Loxley as one of the largest gas accumulations discovered and flow tested in the UK onshore. If proven by future production, the calculated gross mean recoverable resources would place Loxley second after the Saltfleetby gas field, the UK onshore’s largest gas field to date, which produced approximately 73 bcf.
These results further underline the Company’s view that the 48 km² Loxley geological structure contains materially significant gas volumes, which in a success case of around 4-5 bcf/year, on an energy equivalent basis, could have the capacity to power around 200,000 homes per year.
In the event that planning consent for the Company’s appraisal and long-term testing programme is granted (see planning consent status below), and Covid-19 permitting, the Company seeks to drill the Loxley-1 well in the second half of 2021.
Loxley planning consent update
Following Surrey County Council’s (“SCC”) August 3rd decision to redetermine the Company’s Loxley gas appraisal planning application, the Company understands that SCC are now working towards a rerun on 22 October, the first available planning committee meeting (“PCM”) date.
The rerun decision was taken by SCC following receipt of external advice regarding the Company’s and over 100 other formal complaints questioning the lawfulness of SCC’s 29 June PCM. During this PCM the members voted by 6 to 5 against SCC’s planning officer’s recommendation to consent to UKOG’s Loxley development.
A permit, covering all environmental aspects of the proposed development, was issued by the Environment Agency in June 2020
Further PCM timing updates will be issued in due course.
Qualified Person’s Statement
Matt Cartwright, UKOG’s Commercial Director, who has 37 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.
Stephen Sanderson UKOG’s Chief Executive commented:
“The report underlines the Company’s stated viewpoint that Loxley is a material UK gas resource, potentially one of the largest in the UK onshore’s history, capable in the success case of making a significant and timely contribution to the local and national requirement for net zero compliant energy.”
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