PEDL234. Source: Oil & Gas Authority
UK Oil and Gas predicted today it would drill two new wells next year following the extension of one of its Weald licences in southern England.
The company said the Oil and Gas Authority had allowed five years for appraisal of PEDL234, which includes the Broadford Bridge site in West Sussex.
In return, the licence operator, UKOG subsidiary Kimmeridge Oil and Gas Ltd, is required to:
- Drill two more exploration wells into the Kimmeridge Limestone
- Acquire 50km of seismic data
- Submit a Field Development Plan
UKOG Executive chairman, Stephen Sanderson, said the sites for the two new wells had been selected and “the regulatory permitting process” was underway. The company said one of the new wells would also appraise the section of the Godley Bridge Portland gas field in PEDL234.
Mr Sanderson said a further sidetrack of the Broadford Bridge well near Billingshurst “remains very much on the cards”.
“This key five-year plus licence extension will enable the Company to drill its two planned new Kimmeridge exploration wells in the deepest and most oil generative Kimmeridge section of the Weald Basin.”
Broadford Bridge well site, 23 December 2017. Photo: Broadford Bridge Action Group
PEDL234 is west of the oil exploration site at Balcombe and south west of sites at Brockham and Horse Hill in Surrey. It is operated by UKOG’s subsidiary Kimmeridge Oil and Gas Ltd. UKOG announced in March 2018 it had suspended the Broadford Bridge well after describing the observed oil flows as likely to be “sub-commercial”
The licence was granted after the 13th round in 2008, originally to Magellan and Celtique Energie. The initial, exploration, term of the licence was first set to expire in 2014. It was extended until 2016, when the licence was acquired by UKOG on condition that it was extended again. The latest intial term expiry date was the end of June this year.
Ben Dean, writing for DrillOrDrop last month, predicted that because the operator had drilled a well that met the initial term work programme, the licence would move to the second, appraisal term, and adopt the 2014 model clauses.
UKOG said today in a statement to shareholders:
“The Licence will now be converted to the 14th Licence Round Master Clauses Agreement which permits a Retention Area (“RA”) covering the entirety of the 300 km2 Licence area to be created.”
The appraisal term, which had been due to expire in June 2019, now looks likely to run until December 2023. This would leave 16 years for the final production term if the end date for the licence remains unchanged. The OGA has not yet updated the licence details on its website and UKOG did not respond to our question on this point.
UKOG statement to shareholders
Categories: Regulation
DRILL OR DROP? 
Another £8m to raise imo. When will it end?
Only when no one is left willing to supply the £8m, Mike.
Looking at Tesla, 15 years underway, still no profit, no dividend and probably needing to raise another $3 BILLION this year, the process would appear to be almost never ending.