Results of well testing at the Horse Hill oil exploration site in Surrey have exceeded expectations, the leading investor said this afternoon.
In a statement to investors, UK Oil & Gas plc (UKOG) forecast that the Portland formation could achieve a production rate of 362 barrels of oil per day (bopd). This would put it in the top five onshore oil wells in the UK.
UKOG said plans were being made to extract oil from the Portland using a sidetrack to the existing well (HH-1) or a new horizontal appraisal well (HH-2). The target production rate of the new well would be 720-1,080 bopd, the statement said.
Horse Hill has all the necessary planning permissions and environmental permits for the new wells. A planning application to Surrey County Council for long-term production was expected soon, UKOG added.
The statement said the HH-1 Portland formation was “robustly commercial” at 140 bopd and oil prices below $60 per barrel.
The tests re-perforated the Portland section of the HH-1 well, resulting in an increase in productivity of up to 65%, the statement added.
Stephen Sanderson, UKOG’s chief executive, said:
“We are delighted that the HH-1 re-perforation and optimisation programme has resulted in the forecast sustainable Portland production rate of 362 bopd, which significantly exceeds our initial test programme expectations.
“This high rate, together with our economic modelling, strongly indicates that the HH-1 Portland vertical well is commercially viable and robustly economic at the lowest observed sustainable test rates and the predicted future sustainable production rates.
“We also look forward to the near-term prospect of a new Portland horizontal appraisal well attaining a sustainable test rate in early 2019. This commercial result would make the Portland a significant asset and would underpin both the Horse Hill oil discovery’s and the Company’s future.”
The UKOG statement said Portland production after perforation had been restricted to what it described as a sustainable 24/7 rate of 140-160 bopd. It added that this did not reflect the Portland’s full flow potential from “further optimisation” of the HH-1 well or a new horizontal production well.
UKOG said preparation was now underway for extended well tests on what the company regards as the primary target at Horse Hill, the Kimmeridge Limestone (KL) formation.
The tests aim to establish whether the KL3 and KL4 zones of the vertical well are commercial.
Lies, damned lies, statistics, and UKOG production estimates.
Ostriches up on Leith Hill now?
Reality has a nasty habit of upsetting the fantasy.
Oh here we go [edited by moderator] to rip some investors off, that’s if there are still some gullible enough to invest and lose their money. You got more chance of getting a 100?1 shot on the horses than any return from these cowboys lol The [edited by moderator] Weald oilers will be out in force targeting the over 65’s
Fracking law FS
UKOG 0.57p Sept 13, now 2.15.
So far a better return that Footasylum and Debenhams ( 400%, and has been more ).
But why would UKOG target the over 65s? At that age a low risk portfolio is required, unless you have a bit of cash to burn.
Over 65s are targeted by equity release firms and or pension advice people in my opinion.
Maybe buying UKOG at 0.9p in June 2018 was OK?
But no dividend, that is for sure.
A long wait for the next set of results I guess.
We live in a time of ‘revaluation = assets that don’t actually exist’….these numbers are just that, numbers designed to rip off the gullible.
I am not so sure the majority of investors are gullible.
It’s more like…hopefull.
Especially as these days there is plenty to read on the subject, be it professors on DOD or eternally hopefull people on the bulletin boards.
Where ‘investments’ are concerned, the old adage, you cannot make something out of nothing’ does not seem to apply; our system is creating a virtual world, it no longer relates to the real value of a company; the winners, well you know their names, the losers, those who believe that you can generate money for nothing (no don’t start singing Dire Straights PhilC 🙂 ]; there are ALWAYS consequences. The number of ‘gamblers’ is on the increase, they will destroy our economy.
Why accept the pain of many to pamper the few? Time for change. Take responsibility for your actions. In the worlds of a famous rabbi ‘ the LOVE of money is the root of ALL that is bad’.
Great news for home grown energy oil/gas .Hope in the future will not be held to ransom from Russia or poisoned by Russia agent .Now let get production / jobs /income for Surrey U.K. And get rid of these Ecco warriors littering the countryside .Have you seen there rubbish at Leigh hill site ?
And the first Injector
Weald Oiler arrives right on cue. How much acid does this type of extraction use per well Slade?
Not a lot, depends on the type of acid job (wash or matrix or squeeze) but it is insignificant. An acid frack of course is a different story – as much as operationally possible……
Gonna laugh my “socks” when it all goes wrong.
Question: Slade, what do you actually do to help protect and safeguard the environment for the future… no doubt nothing.
Oh the bitterness.
Do not despair flfs. There will always be a place for discussing fantasies. I suggest you contact Mr. Musk, if you can break through the wacky backy haze. You may find he is a little distracted at the moment trying to hold the doors shut-to stop anyone else leaving!
Or generating publicity…….in the meantime…..
Reading the actual press release reminds me of the early days of a Canadian explorer with zero cash flow that I worked for whose PRs were always very upbeat to maintain interest in the company.
My take on the Portland at HH-1 (with over 30years upstream experience) is that it is economically marginal at best. There is too much waffle in the PR. Pumps / gas slugs / intermittent natural flow all add up to not much on it’s own. The GOR of around 100SCF/Bbl indicated is positive from a lift perspective but pumps don’t like gas so the intake pressure will need to be kept above the bubble point or a gas separation system may be required below the pump. Also positive is the stated no depletion in the reservoir pressure during the test but this depends on how much fluid actually extracted. And no water production is also good. But the flow rates are low for the costs involved.
UKOG must be hoping that the Kimmeridge produces at a much higher sustainable rate (as previously tested in 2016) without significant reservoir pressure decline.
[Comment corrected at poster’s request]
The market didn’t take the news seriously. The share price didn’t respond. Maybe just hype pr again by a very smooth operator.
TW-the market had already absorbed much of the news. It was fairly well known/calculated this was already commercial.
The bigger reaction will be to the Kimmeridge and the horizontal in the Portland. It will be slowly assessed this time. Perhaps less gushing.
I think cuckoo we would seek to protect the environment from another Torrey Canyon. Takes more than your socks to mop that up if it happened in the Solent. (A lot of Torrey Canyons to move 22m tonnes.)
Is nowhere in nature sacred now? Everything is being plundered by greedy people seeking profit!