The government has agreed to two more changes to the terms covering oil exploration licences in Surrey and West Sussex, according to UK Oil & Gas Investments, the company behind the Horse Hill oil well near Gatwick.
UK Oil and Gas Investments Ltd (UKOG) announced today (27/6/2016) that the initial exploration term for PEDL 143 in Surrey had been extended for two years until 30 September 2018. This is confirmed by details for the licence on the Department of Energy and Climate Change webpage.
UKOG has a 30% interest in PEDL 143, which is operated by Europa Oil and Gas Holdings. The licence includes the site of the proposed Holmwood-1 well site on the edge of Dorking. It is immediately west of PEDL 137, where UKOG has a stake in the Horse Hill well.
The following day (28/6/2016), UKOG announced that it and IGas had received an extension of the licence for PEDL 233, which includes the Baxters Copse oil exploration site in West Sussex, until 30 June 2018. This will allow time to drill another appraisal well at Baxters Copse, the company said.
On the PEDL 143 extension, Stephen Sanderson, executive chairman of UKOG, said:
“The forthcoming Holmwood-1 well is a key part of the Company’s near term strategy to push the Kimmeridge Limestone play forwards. The extension is very welcome.”
This is the latest in a number of variations approved or being considered by the Oil and Gas Authority, the organisation responsible for Petroleum Exploration and Development Licences (PEDLs).
Last week, Cuadrilla announced that the OGA had agreed to a change in the rules on its PEDL 165 in the Fylde area of Lancashire. This has allowed it to keep about 94% of the area after the initial term expires this week.
Campaigners from Frack Free Lancashire said the Department of Energy and Climate Change had told them Cuadrilla would need to surrender 50% of the area to progress to a second term. DrillOrDrop report
In West Sussex, UKOG has offered £3.5m for PEDL 165 on condition that the initial term, also expiring this week, is extended for at least a year. Today, local campaign groups wrote to DECC and the OGA objecting to any extension of the licence. DrillOrDrop report
DECC has confirmed that an application has been made to vary the licence of PEDL 189 in and around the city of Chester.
In a written answer to the Labour MP Chris Matheson, the Energy and Climate Change Minister, Andrea Leadsom, said: “The request is under consideration from the Oil and Gas Authority and a decision will be made shortly.” Link to question and answer
DrillOrDrop asked the OGA if a decision had been made but it has been unable to provide a reply so far. We will update this post when it does.
OGA comment on licence terms
The OGA did, however, reply today to an earlier set of questions by DrillOrDrop. In a statement it said:
“Several licensees proposed amendments to their Licences, either to extend the Initial or Second Term of their licences, or to adopt the latest Model Clauses (set out at Schedule 2 of the Petroleum Licensing (Exploration and Production) (Landward Areas) Regulations 2014 (see http://www.legislation.gov.uk/uksi/2014/1686/contents/made). Licensees adduced a range of grounds for their proposals.
“In those cases where OGA agreed the proposals, it has drafted and sent Deeds of Variation to the licensees for their signature. When the process is complete, OGA will place a list of the variations, and of the licences that will end on 30 June, on its website.
“The 2014 Model Clauses implemented certain changes from previous Model Clauses: principally that the retention of acreage is made subject to the agreement of Retention and Development Areas (clauses 16, 19 and 43), and there is a reduced confidentiality period for certain information about hydraulic fracturing (clause 32). While no Retention Areas or Development Areas have yet been agreed, Clause 5(3)(b) can modify the condition relating to a surrender of 50% of the initial Licensed Area where Retention Areas or Development Areas exist.”
Please contact DrillOrDrop if you know about variations in licence terms of other PEDLs