UK Oil and Gas Investments Plc announced this morning it was not seeking a time extension of an exploration licence, off the south west coast of the Isle of Wight.
In a formal statement to investors today, the company said its 100% interest in offshore licence P1916 in Compton Bay had now lapsed.
But researchers on the Isle of Wight discovered that UK Oil and Gas Investments (UKOG) surrendered the licence more than six weeks ago.
The Oil & Gas Authority, the regulator of hydrocarbon licences, confirmed to DrillOrDrop this afternoon that the surrender was effective from 18 December 2017.
One of the researchers, Sylvia May, has complained to the AIM stock market and the Financial Conduct Authority (FCA) about UKOG statements made on or after the surrender date which still listed P1916 as a company asset.
“This failure to provide accurate and timely information of assets is misleading investors and raises questions on the integrity of the UK financial system.”
UKOG told investors this morning:
“In the Company’s view the offshore Licence’s low geological prospectivity, high environmental sensitivity and consequential high associated drilling costs merited no further commitment of UKOG’s financial or technical resources. No remaining P1916 Licence obligations remain.”
Frack Free Isle of Wight and local Liberal Democrat, Nick Stuart, have also been investigating the surrender of licence P1916.
People were first alerted that the licence may have lapsed when UKOG issued a Regulatory News Service (RNS) communication on 9 January 2018. The RNS did not refer to a licence surrender but P1916 was not on the list of company-held licences at the end of the communication.
Nick Stuart said the offshore licence was on a list of company assets on the UKOG website on 21 January 2018. Sylvia May said a page about P1916 was on the UKOG website on 28 January 2018 when she complained to AIM and the FCA.
A spokesperson for Frack Free Isle of Wight said:
“Interesting to see UKOG have finally informed their investors they no longer hold P1916. But six weeks after the date OGA say they surrendered the licence, 18th December 2017. The licence was due to expire today, 31st January 2018.
“So why would UKOG delay the announcement until now when they knew they had surrendered it 6 weeks ago? It doesn’t exactly inspire confidence in the company’s integrity.”
UKOG first acquired an interest in P1916 in 2014 from Northern Petroleum PLC. A UKOG document in 2015 valued it at $12.5m-$69m. The licence was extended in January 2017 for a year.
DrillOrDrop invited UKOG to comment on concerns that for several weeks investors may have believed that the company held P1916 when it had already been surrendered.
A UKOG spokesperson said:
“We were obliged to give a month’s notice to the OGA, which we adhered to. The Licence expired today.”
Onshore island interests
UKOG still has onshore interests on the Isle of Wight. Today’s RNS said the company was focusing on the oil licence PEDL331 at Arreton in the centre of the island.
UKOG said its consultants, Xodus, had estimated 227 million barrels of oil in place in the area and 15.7 million barrels recoverable. If this were accurate, it would give UKOG, with its 65% interest, 10.2 million barrels.
The company said it was preparing applications to carry out drilling in the licence area in the first half of 2019.
UKOG’s Executive Chairman, said:
“The Arreton discovery on the Isle of Wight’s remains a key element of the company’s 2018 and 2019 growth strategy and plans. We look forward to working with our partners towards a successful 2019 appraisal drilling campaign.”
Keith Taylor, the Green Party’s MEP for the Isle of Wight, said:
“While UKOG gives with one hand, by surrendering its Compton Bay drilling licence, it slaps the people of the Isle of Wight in the face with the other, by announcing destructive plans for onshore drilling in the village of Arreton.”
Mr Taylor, who visited campaigners on the island earlier this month, said:
“The further exploitation of oil and gas resources either by conventional or unconventional means is a form of dangerous climate denial, especially when the Island has the capacity to be a world-leader in renewable energy production.
“I will stand by the local campaigners and residents who will be fighting to protect their environment, their communities and the planet by opposing UKOG’s plans tooth and nail.”