Industry

Portland has “viable commercial volume” of oil at Horse Hill, says UKOG

Horse Hill oil site blockaded by protesters

Blockade of the Horse Hill site in Surrey, 20 August 2018. Photo: RobHarbinson.com

The company behind oil exploration at Horse Hill near Gatwick Airport has released further details of the extended well test currently underway.

UK Oil & Gas plc said today analysis of the first stage of testing of the Portland formation suggested that the well had connected to a reservoir containing 7-11 million barrels of oil in place (OIP).

The company described this as:

” a robustly viable commercial volume for a single well”

Stephen Sanderson, chief executive of UKOG said:

“The Portland continues to out-perform our initial expectations and looks set to provide the production and cash flow base that can underpin UKOG’s future growth.

He said the extended well test on the Kimmeridge Limestone 4 layer (“KL4”) had now begun:

“Our immediate operational focus now switches to the Kimmeridge extended well test, which, if successful, has the potential to make Horse Hill one of the UK’s leading onshore producing oil fields and to help unlock the value within our extensive Kimmeridge asset portfolio in the Weald.

Last week, UKOG revealed plans to extend the site and increase the number of wells to six.

DrillOrDrop key facts page for the Horse Hill oil site

5/10/18 Headline picture changed

53 replies »

  1. Jonathan-I only question your concern as you seem to not have done the basics to arrive at it.

    Whilst you seem to have a problem with exploration companies seeking funding for exploration (a very risky business) you do not have the same concern for Tesla doing the same on a much larger scale and still burning through cash at an alarming rate having made no profit after 15 years. I happen to think Mr. Musk is brilliant in some respects, but he should be kept away from running a business for the financial security of investors. But then there are always those willing to gamble on outcomes. Mr. Buffett once said the market is there to move money from the impatient to the patient. Perhaps there are a lot of very patient Tesla investors.

    I have had two hybrid vehicles, and have moved back to diesel. If, and when, an electric vehicle comes on the market that does not require as many compromises I may look at it again, but I suspect by then hydrogen will be rolling out also. Where would the hydrogen come from?

    There will always be areas where the larger oil companies decide not to invest, as they see “better” opportunities elsewhere. It certainly does not mean they are always correct. Some did exactly that with regard to US and Canada shale and are now playing expensive catch up. Much of the decision process regarding UK on shore relates to the cost and timescale of the authorisation process rather than the geological considerations. Share holders in companies like Shell will exert pressure against projects which are deemed risky in relation to authorisation.

    Meanwhile Brent crude hit a four-year high of $84/barrel. You will not have long to wait to see that impact your pocket. Would oil from the Weald directly alter that? No. Would it indirectly adjust for that? Yes.

    • Dear Martin,
      Your replies are always interesting, and thought provoking, which I appreciate. Here’s my response. What are the basics that you feel are required for the concern that I feel? My concern is not an abstract intellectual one. It is borne of my emotional response to the behaviour of the characters involved in this highly opportunistic industry. ‘Capitalism’ lauds the risk-taker, and yet in this instance, the risk taker is taking risks with our shared environment and other people’s money. How much of his own money is invested? Any more than he has rewarded himself in share issues? His motivation appears to be purely and simply to get rich, and to live in the Bahamas, as he has stated. Such lowly self-centred motivations aren’t easily trusted. They don’t seem to take on board any big picture considerations. And, try as I might, I can’t help but be suspicious of people that create paper shares, award them to themselves, and then buy and sell them for profit. Money from thin air. Similar to much of the money earnt by investment bankers. Someone suffers, as many of us did during the banking crisis, but not those that are pulling the strings. Others, that they have enticed to invest. Regarding your vehicles, similar non-big-picture thinking appears to be governing your purchases. You appear to be happy to experiment with a hybrid if it provides a tangible economic benefit but gain no satisfaction whatsoever from being part of a global warming solution rather than being part of the global warming problem (I am hoping to buy into electric by the way with the next generation of longer range vehicles, by which time I should be able to afford one). There is precious little in your statement above in fact that doesn’t relate to money and profit, as if nothing else mattered. You seem to imply that companies such as UKOG and Angus Energy may be mopping up opportunities that larger companies have missed. And yet, where are their revenues from drilling? I can see how money has been generated through investment schemes, but where is the oil in the Weald that is proving profitable for them? And have you seen the state that shale exploration has left vast swathes of Canada, the US, and Australia in? Where is the net benefit to mankind in all of that? Some money to some people. And not that many at that? Are there really shale companies in those countries that are long term healthy in terms of their financial situation, given the very short life of most wells, and the very high costs of exploration? And when you talk about delays in authorisations for speculative onshore drilling, that’s because people such as I, who have to live with the consequences, are extremely concerned about it? Habitat destruction, soil contamination, water contamination, etc. It’s not all about money Martin. You can’t eat money, you can’t drink money, you can’t breathe money, and you can’t live on a planet that’s no longer habitable.
      Very best wishes,
      Jonathan.

      • I,m sure Jonathan plumridge you are living a very comfortable live somewhere in the south of England.surround by your possessions produced from oil & gas imported from half way around the world .[edited by moderator]

  2. The majority of people in this country chose their car based upon what vehicle fulfills the way they wish to use that car. I would not buy a two seater sports car if I had a family of five.

    Sorry Jonathan, your view is different to mine. I will look at green alternatives and invest in them if I feel they do not seriously compromise how I want to live. Yes, an air sourced heat pump meets my criteria so I invested in one, a hybrid car didn’t so I decided to opt out until one comes along that does. I am deeply suspicious that hybrids/electric may prove to be a bigger version of Gordon Browns diesel-gate, time will tell. Also, the production of electric vehicles is hardly that eco friendly. But I tried two, and then decided. I don’t think I will even bother trying a Yurt.

    I fail to understand though why you have difficulty understanding that any company exploring/developing is in a pre-production phase (apart from small assets) and therefor not going to be making a profit-yet. Any new product being developed costs money during development in order to then make a profit when in production. Not all “new products” get there, hence the risk element. Angus and UKOG are in that situation and I am sure the individuals running those companies do so for a profit motive, and hope to make money, just the same as a manufacturer of Yurts, or Teslas. (Perhaps take a look at Mr. Musk’s lifestyle. Can’t see anyone running UKOG or Angus with that sort of ambition.)

    In terms of long term profitability of shale-totally separate to what is happening in the Weald- as I have stated before Shell, plus others, just investing $31 BILLION in Canada to produce and transport gas to Far East. Shell (“never sell Shell” reputation) achieved share growth of 14% in the last 6 months and an annual dividend income of around 5.3%. They will certainly continue to do similar if oil prices stay where they are, which is the most likely scenario. They may also look around to purchase more assets they missed out on, and some small exploration company has proven.

    No, it is not all about money. But, companies invest to make money and then pay taxes to help fund the countries they operate in. If they didn’t then the individual tax payer picks up the tab. That equation does not balance without companies paying taxes. Oil taxes from production paid in the country using that oil is better for individuals in that country against importing oil and paying taxes to the country that produced the oil the other side of the world. So, I have nothing against companies making a profit producing stuff in this country we are going to use in this country. If they can do that fine, if they can’t do it, then they will not. But, to try and stop them doing so via a mixture of false information, scaremongering and mob rule-as has been attempted, might delay the process but in reality all it will achieve is that less benefit from any production will be available to the public because less tax will accrue. That’s the risk such protests take, because that can, and often becomes public knowledge, and they tend to get annoyed.

    • Well said Martin I could not of put it better myself .Can,t stand Not in my backyard nimblest.Who live a comfortable live surrounded by their procession produced for oil .2 cars on the drive central heating .And then protest because a uk company like to produce home grown oil and gas hypocrisy at its worst

    • Hi Martin. Have you seen today’s report compiled by eminent scientists on the imminent dangers presented by global warming? It makes very difficult reading. Are you not prepared to allow such statements to affect your behaviour in any way? Do you not accept any personal responsibility for the planet’s current difficulties? You do live here. Growth, and money, with no wider references, lead to this point. Irresponsible consumption leads to this point. Exploitation with no regard to conservation will lead us to extremely dark places unless we are extremely careful. By the way, your assertion that companies make money and pay taxes to contribute much needed money to the public purse doesn’t ring very true to me. The lowly in society do pay their taxes. They are obliged to. The bigger the companies, the less tax they appear to pay, and the more they appear to be able to dodge their liabilities. Accounts are held in places where they cannot be accessed. Companies are created to act as smokescreens in order to avoid tax obligations. And international concerns exploit their bases abroad in ingenious ways to avoid contributing to the societies that they exploit as markets. It’s not nearly as neat as you paint it. And why does Stephen Sanderson wish to retire to the Bahamas? To make sure that he pays all taxes due? I doubt it. People generally aren’t opposed to Stephen Sanderson making money. It’s the manner of it that upsets them. Conjuring it up from thin air and investors. Stealing it from our national natural resource base. And potentially creating a God-awful mess in the process of doing so. What you term mob rule, others term protest. What you term mob rule, others see as the only course of action open to them. What you term ‘producing stuff’ others view as theft. Unfortunately for those of us that wish to think ‘big picture’ the British media generally support the interests of the wealthy and influential few, presenting ‘Ministry Of Truth’ missives for an ill-informed and innocent-of-the-truth general public to get angry about. The media decide who is ‘the enemy’ and who is responsible for all our woes. Jeremy Corbyn apparently. The general public frequently gets annoyed at the wrong people. They are played by influential puppeteers that write their scripts for them and then oversee their performance.

      • Jonathan are you living in a wood house made from pallet and riding your horse to market to buy you farm grow veg .Or do you drive to Tesco ever morning to get your plastic rapped food .Then go back to your central heated bungalow watch plastic tv then send messages on your plastic computer Sorry you are living in a plastic world like all of us .When not produce that oil needed as close to where you live .Instead of using huge amounts of fuel to import half way around the world .????

        • What do you know about me Gordon? What do you know about my life? What do you know about my thoughts? You THINK I’m a hypocrite, so you accuse me of being a hypocrite. But you KNOW nothing. If given the choice between using more oil and less oil I will choose to use less oil. Will you? Given a voice between walking and driving I’ll walk. Will you? Hypocrisy is not what makes you and I different Gordon. What makes us different is the willingness to face global warming and all the issues associated with it and do something about it. There is no “holier than thou” about what I am saying and doing. I’m simply doing what I can, in the situation that I find myself in, not to make anything worse. Will you only listen to people that live ‘off grid’ in tree houses and ride horses? Why? When vehicles powered by renewable energy are available. And why are you so aggressive? Why is it that the moderator of this site has to edit so many of your posts? Why are you unable to discuss things without resorting to insults and personal attacks? I believe you have a right to an opinion, and I would defend that right in most circumstances. I also believe that we should be discussing issues so that we arrive at an understanding of one another’s point of view. Why do you feel the need to behave so disrespectfully towards people? What do you hope to gain from being rude? My personal experience of aggressive behaviour is that it makes everyone feel bad. Both the aggressor and the person on the receiving end. So to be clear. Given a choice, I would live in a rural setting in a house with a negligible carbon footprint. Why don’t I have that possibility? Because our society isn’t prioritising the things that would facilitate the construction and affordability of such houses. I’m not a hypocrite because I live where I do. I’m a person with a limited range of choices. Should I purchase a pre-wrapped sandwich, if a non plastic wrapped vegetarian option is available I will most likely purchase it. If no such option is available I will recycle whatever I can of the packaging in most circumstances, even taking it home in some instances rather than simply using the nearest bin. I recycle everything that I can. And when I can afford an electric vehicle with a decent range I’ll buy one (next year I hope). This is who I am Gordon. Who are you?

          • Dear Jonathan plumridge .It was not a personal attack .It was to generalise at today society.Using oil base processions in their general live .Then go out protesting about companies who What to produce energy close to home Uk instead of importing from half way around .What is Eco about that ? Unfortunately we as an society are addicted to plastic oil base products .You or l will not change that overnight.So in the meantime produce oil gas as close to home .But what l can’t stand is nimblest.Not in my back yard hypocrisy.So selfish.Sorry if l used you as an example.It was not personal.I also hate to see rubbish thrown about .To a point when l go to the beach or out walk l pick up other people rubbish and take it home to recycle.That is the way l was bought up by my parents.Unfortunately l have been to some of these protestors sites and seen the rubbish they leave behind when they move on to their next project of the month That is hypocrisy

            • Glad we’ve found some common ground Gordon 🙂 My theme if you like, is that many people don’t have the choices available that they’d like to make. Many people on low incomes for example have no option but to eat unhealthy food or not eat at all. Just as I can’t as yet afford a Tesla Model 3. Re being addicted to plastic oil based products, the first essential step to overcoming any addiction is to recognise it and begin to take baby steps towards confronting it. We as a society appear to be largely addicted to consumption, producing and then throwing away far more than we really need. One less plastic item, one less car journey, one less iPhone. It would all help to stem the tide. When talking about protesters against onshore oil drilling it is also very tempting, but inaccurate, to generalise. Amongst my protesting friends are all sorts of personality types, with what some people like to term ‘swampies’ in the minority by far. There’d be many more environmentalists for example, quite a significant number of church-goers with concerns for their communities, a fair number of idealistic youngsters, etc. Each of these personality types with have their own feelings with regard to rubbish and will behave differently accordingly. There will on the other hand be a significant degree of uniformity of opinion when it comes to the non-restoration of unsuccessful drilling sites by exploration companies or the tipping of toxic waste from drilling sites into our oceans. My personal experience with regard to objections to many of the onshore drilling projects currently underway is that people are so alarmed by them that if they are able they will travel significant distances to protest (guilty myself of not having travelled outside my own county because of other life pressures), frequently making significant sacrifices to do so. In my own case I’ve given up a number of days of work. Regarding the motivation of onshore drilling companies I have yet to meet a single person involved in exploratory drilling in the Weald that has convinced me that their motivations are anything to do with anything other than personal gain. They are certainly no eco-warriors battling to defend us from the need to environmentally destructively import oil from other countries. I’d love to meet one. They’d have extraordinarily rich perspectives. But I haven’t. I’m really cheered to hear Gordon that you will pick up rubbish when you’re out or at the beach, but the sea that you’re enjoying an outlook over might well be dead to most aquatic life before long because of all the toxic wastes and plastic that are being tipped into it. Very best wishes, Jonathan.

  3. “Irresponsible consumption”!! Well, that consumption, in terms of oil and gas is happening in the UK. It is irresponsible simply to export that to over the horizon.
    If oil is produced in the Weald will that produce a binging of oil consumption? Does on shore oil produced elsewhere in the UK do that? No, it simply means less imported from overseas. Maybe one or two pilots would be unhappy.

    Maybe SS suffers from arthritis and longs for a sunny, warm retirement. Why does one of the antis “experts” live in France, why does another drive his diesel from protest to protest? Dangerous to guess what peoples motives are-they are rarely what is guessed.

    What mess? Have you visited Wytch Farm? Described by someone I know who did, and was a University lecturer in business, as “the best example of industry merging seamlessly with the environment”. Oil has been extracted at Stockbridge for many years. Is the River Test now a dirty, polluted waterway? No, it is still one of the top fly fishing rivers in the world, with crystal clear water.

    Yes, some companies and individuals minimise/delay tax. But, how much UK tax is paid on Middle East oil? I think JC was fined for completing his return late-same thing. I don’t think there is any evidence that oil companies are any worse than any other, but all companies can claim development costs against subsequent taxation. Supposed to encourage them to grow.

    I will quite happily measure my consumption against most, but some will be more heroic than me. Meanwhile, those who produce children that live, take their antibiotics to stay alive themselves or have the gall to live to 90+, should be thoroughly ashamed! Because, if that didn’t happen, climate change would be a much smaller problem. Perhaps the UN should sort out what the UN is widely involved in doing?

    Must depart, and turn off my “green” heating otherwise the dog will be cooked! (Yes, I could have not put it on, but paid out £50 today for his acupuncture and a bit of heating, extracting moisture at the same time, will save me repeating that for 5 weeks. Otherwise will have to increase use of his herbal treatment, that now requires a vet. script which means £40 for the consultation as well. “Alternative” not without cost, and is more limited on vet. insurance.) Hey ho!

    • Good to hear Stockbridge is still going. I was part of the team that planned and drilled the original wells for Amoco in the 1980’s. Sold to Ultramar I recall and Amoco bought up by BP.

      The wells were matrix acidised to improve production, Great Oolite formation. Highly deviated and drilled with oil based mud. We used to mix the oily cuttings with fly ash from power stations and give it to farmers who used it to surface their tracks. Set solid and lasted ages. I bet you can’t do that now!

      We used to frequent the Leckford Hutt and White Hart.

  4. Okay Martin. I’ll take a look at Wytch Farm. I know next to nothing about it, and you mention it every second post. Did you miss today’s announcement on global warming then? You didn’t mention it once in your reply. And, just to be clear, I am not arguing that UK onshore oil is worse for Britain than imported oil, I’m arguing that all oil usage generally must be kept to a minimum (as were the scientists who published today’s report). We need much more work from our government to incentivise the energy practises that will do the least damage to our environment (you know, the one that we both depend on?) We can all help out as individuals the report states by using less meat and dairy products, driving electric vehicles, walking or cycling short distances, eating locally sourced food, throwing less away, not relying so much on tumble dryers, insulating our homes, and insisting on the low carbon manufacturing of goods. No mention as yet of eugenics. Sorry to hear of your dog’s troubles. Nice to know you’ve a soft side. Re SS’s chosen bolt hole of the Bahamas, there are plenty of nice warm sunny places which aren’t sterile tax havens Martin, and the last time I checked France was by no means a tax haven, but can offer an extremely pleasant quality of life, particularly in the south. Not much need to guess re SS’s motivations by the way. He has declared them on TV. Hope the acupuncture works. Hate to see animals in distress. Very best wishes, Jonathan.

  5. I mention Wytch Farm Jonathan simply because it is Europe’s largest on shore oil field. Now producing somewhat less than it did years ago. The fact you have not heard much about it is that it is sitting snug amongst nature reserves, not far from some of the most expensive houses outside London and a marine “playground” for the wealthy boat owners-yet, it is doing all that without causing an issue. Oil is piped underground through the New Forest to Hamble where it is then tankered round the corner to Fawley Refinery. Oil from HH is taken by lorry to Hamble also. When that oil is processed some of it is piped back to Gatwick Airport as aviation fuel.

    You can check on the Internet to see how much oil is processed/year at Fawley Refinery (due to be expanded) and see how much is imported up the Solent that could be replaced in part by a few more UK Wytch Farms. The refinery itself actually helps clean the Solent via treatment of cooling water prior to return. I am more concerned about the maritime “mess” that could be caused via tankers coming from half way across the world. I do remember the Torrey Canyon, and there are a number of those every year.

    I did watch some of the coverage yesterday regarding the UN report, but quite quickly switched over to other things as the vested interests took over the debate-encouraged by the media. Once I had drawn a mental picture of armies of carers arriving at clients homes this am, suggesting they put on a cardy, turn down the thermostat, throw their eggs and bacon out, and sit around in soiled clothes to avoid using the washing machine or drier I decided the garden was for me whilst I am able and before I face that brave new world.

    Having my flu jab this weekend. Maybe better to cancel it and encourage a centenary event?

  6. Thanks for raising a smile Martin. Extreme viewpoints do tend to hijack any debate. However, I do feel that the main thrust of the UN report is a valid one: that we should all do what we can (and that will of course vary considerably according to our circumstances), and that we should all take an individual responsibility for our personal carbon footprint. Special use-of-plastics dispensation for your flu jab LOL

  7. I hate some plastic, but love some of it. But I do take personal responsibility that what I use is unlikely to cause a problem to others. Single use is burnt and produces electricity, “hard” plastic is separated and recycled. I certainly don’t expect anyone to lecture me (not pointing to you) that the material should be banned rather than deal with the issue like I do, and others can. The concern to me is that our politicians find more mileage in fanning the flames (virtue signalling I think is the modern term) than solving the disposal issue.

    Equally, I do sit on the toilet and expect that I pay to stop that reaching the ocean. (It used to, when the politicians were in charge of water.)

    I suppose it just goes to show politicians are politicians because they would make useless business managers! But, they have had the last 40 years where managing anything has not been high on their list of priorities. The next 20 years will come as a shock to most of them.

    On a less jolly note, if you have a scan of today’s Times you will see a ship leaking oil in the Med. after a collision with another ship. Fortunately not an oil tanker on it’s way to Fawley Refinery.

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