Industry

UKOG publishes numbers from Horse Hill oil tests

1810 Horse Hill UKOG1

Horse Hill oil site near Gatwick Airport, October 2018. Photo: Used with the owner’s consent

The leading company behind exploration at the Horse Hill oil site near Gatwick said total production from the flow test so far had reached nearly 14,000 barrels.

In a statement to investors today, UK Oil & Gas said most of the oil – 10,248 barrels – had come from the Kimmeridge KL3 zone of the well. The result made the zone “commercially viable”, it said

The company said the KL3 zone had initially produced oil at a rate of 771 barrels of oil a day (bopd). The average rate over the 30 day test period was 342 bopd.

UKOG said more than 40 road tankers, each carrying 220 barrels of KL3 crude oil, had been exported to the Hamble oil terminal. About 500 barrels of stock tank oil remaining at the site, it said.

Today’s statement added that the KL3 flow test had produced 3.5 million cubic feet of gas. The flow test from the Portland formation had produced 3,672 barrels. No formation water had returned to surface from either the Kimmeridge or Portland formations.

Stephen Sanderson, UKOG’s Chief Executive, said the results “firmly establishes Horse Hill as a commercially viable oil field”.

He described this as “the most significant milestone” in UKOG’s history. He added:

“The Company will spare no effort to push Horse Hill towards full time production in late 2019/early 2020.”

UKOG said it would next text the KL4 section of the well.

17 replies »

  1. And all without tremors or fracking! Take the slippery stuff out and the ground stops slipping and sliding. Yep-those dots seem to join up, so must be scientific.

    Seems the “puddle” is somewhat larger than some “experts” speculated.

    Interesting at this stage, but the key IMO is what will be experienced in terms of output when this moves to horizontal drilling. Hence the muted reaction with the share price.

    6% of revenue to the surrounding area, being discussed, may actually be something reasonably substantial. Wonder what they get from Gatwick?

      • Early days R8 LMX (sounds like a Star Wars character). The ‘self-proclaimed expert Smythe’ held a relevant professorship, awarded by others. He’s no need to hide behind a robot moniker either, and is quite happy to use his own name. On the subject of Horse Hill he felt that there was sufficient natural fracturing in the substrata to enable significant flow in the early stages of any extraction process, but that the project would struggle to survive long term without some serious ‘fracking’ (original and international, except for in the UK, definition) further down the line. So. Not surprised he is quiet at the moment. All is progressing exactly as he foresaw.

    • ‘Cent pour cent d’accord TW’. Maybe the name Gatwick Gusher would be more apply applied to Stephen Sanderson. His oily flow seems far more constant and forceful to me than that of any of the wells that he is involved with. As for commercial viability long term, it would seem far too early to me to make such a claim, given the complexity of the geology that UKOG are endeavouring to exploit at Horse Hill. Worryingly, I’d say that the jury is also out regarding possible environmental damage.

  2. Yes, Jackie, we know that.

    But you need to DYOR and check the history of antis claiming fracking was going to happen at HH and that a cluster of recent earth tremors around the area were due to oil exploration-although HH was not even being tested at the time.

    A wally maybe, but an informed one.

      • Depends if your name is Walter, Jonathan. Maybe Shirley is the oxymoron?

        Strange defence for the Prof. before K4 is tested, when the previous couple of sections have already been declared commercial. And, all based around a vertical well when the obvious, and intended route to proceed with is horizontal.

        A lot of speculation around this one, but the antis have been more guilty of this than the investors, or the companies.

        The bigger the better for the locals, if the 6% of revenue suggested, comes to pass.

        But, we will be told that this will be rejected as “blood money” (just as proposed for PNR) and then find it is trousered with alacrity.

        • ‘Trousered’ by whom Martin? You seem to be implying that ‘antis’ as you refer to them are hypocrites. The money will be ‘trousered’ by the local authorities who failed to oppose the drilling in the first place, not by any ‘antis’. Point of fact. Another point of fact is that opposition to this form of fossil fuel extraction does not largely concern itself with whether the drilling is vertical or horizontal. It concerns itself with the fact that it is taking place at all. Are you a disinterested party Martin? Or might you be ‘trousering’ income from these wells?

          • I’m an interested party Jonathan, but currently-to the best of my knowledge-have no investment in HH. What fund managers do with my investments I do not check daily, but I doubt this would be high on their list and many are precluded from AIM listed companies. Good attempt to try and devalue someone’s opinion but not sure it was necessary, or that there is a significant audience who would care. Lots of 4X4s around HH, and quite a few ‘planes-all drinking oil products.

            Point of fact is that the antis quoted repeatedly that locals around PNR were so against the exploration there that they would reject any compensation payment. Didn’t quite turn out that way. Never does, which is why the antis want to stop such sites before that comes into play. The public have a habit of actually being quite savvy, and do consider cost/benefit-if that becomes evident-rather than just cost.

            My point about horizontal was referring to the output that may be obtained. Maybe greater output would be more income for the locals and therefore more attractive than lower output and lower income. After all, Wytch Farm produced 100k barrels per day at one time and now about 15k, but I suspect the locals don’t notice the difference around the site between the two and would rather have a percentage of the former. (Don’t know if they do get a %. I suspect not from comments I have heard.)

            • No attempt to belittle you Martin. I was just trying to point out that it was unfair to suggest that ‘antis’ as you call them would be happy to ‘trouser’ 6% of drilling revenues. For a start, there is no homogenous group of ‘antis’, people of many different backgrounds oppose these fossil fuel extractions for an equally wide variety of reasons. With a little bit of gumption from a government that really cared about our country and our planet we’d be well on the way to significantly winding down our reliance on fossil fuels already. Next year for example looks very exciting for electric cars, with all sorts of new models on the way with ranges of 200 to 300 miles. We just have to hope that someone in government will assist this very necessary transition through the encouragement of the necessary charging infrastructure. Re the public being savvy and considering cost/benefits, I’m not sure that the public have much say. How many local public bodies in Lancashire rejected fracking? If you mean that people have a tendency to gravitate towards their own short-term self interests over the long-term interests of the many, I’m afraid, sadly, that much evidence would seem to support that. I believe that the major problem that we face energy-wise in this country is a total inability to plan effectively long term. Care to join me next weekend in London for the Extinction Rebellion protest?

            • No, I will not join a rally that focuses upon stopping supply when demand is increasing. Suggest you work upon the solutions to reduce demand and then you will find greater sympathy. Problem with that, when it is attempted those solutions are found to be inadequate or have to be paid for by someone else, so fail to convince more than a few.

              I tried two hybrids, and have returned to the demon fossil fuel. Simply because the hybrid drove on fossil fuel most of the time and did so very inefficiently. When/if that is solved I may reconsider.

              But have a nice day.

            • I’m not interested in hybrids either Martin, but I should be able to enjoy an electric provided it has a more than 200 mile range and a quick-charge facility. I don’t see the stopping of supply in a rising demand context as the point of the Extinction Rebellion. I don’t think that our government is doing anywhere near enough to combat climate change, and I believe that to be a really serious issue. I’m also delighted to see members of our frighteningly apathetic populace getting involved in protest. The many have been exploited by the few for far too long. I also hate to see what our corporate-driven over-producing capitalist comedy show is doing to our planet. Create a demand, produce some crap that claims to meet it, and then create another demand. Which brings me to a point of agreement between us. I sincerely believe that we’d all be a lot happier if we demanded less. Insatiable hunger ain’t comfortable. Contentment by contrast is a wonderful feeling. Wishing you contentment. XJ

            • Jonathan-“the British carbon footprint shrank to smallest since 1859.” Telegraph 17/10/18.

              The UK is not bad at making this sort of progress, but such is not a case for now chucking out existing technology and infrastructure when good alternatives are not ready. Yes, alternatives are increasing but so is energy demand. Alternative energy sources are usually very costly to get started. Why should this be a net cost to all consumers if there is an alternative of utilising more UK energy sources (eg HH), gaining tax, that can mitigate against costs of alternatives and therefore encourage the necessary research and development?

              The reality in our patch is there are plans to expand Heathrow, Gatwick and Southampton Airports and Fawley Refinery is also planning a large expansion. This is all related to demand, and that demand will happen. Recent political problems in parts of the world we have relied upon in the past suggests to me the UK should look inward rather than outward if that is an option. I don’t want to experience the 1970s again in respect of the cost of energy insecurity. I remember it was the poorest in society who were hit hardest, and whilst I am no longer of working age I have empathy for those that are.

  3. How much methane does a cow’s fart contain? The entire population of the UK is told to stop eating meat and cow and sheep population should be cut by 50%, yet according to these figures, UKOG have flared (burned and wasted) 3.5 MILLION cubic feet of gas in the past 30 days. They have no planning permission to ‘produce’ gas, only permission to flare.

  4. Good point Lisa3. They have flared the gas because they have no permission to do anything else, ie. they are following the conditions that are set by the appropriate authorities.

    Longer term, as and when, they enter into production then it would be possible to utilise this gas to generate electricity on site, and introduce to the N. Grid. I think another company in the Weald has that authorised now. So, the sooner the relevant authorities give the permissions the less will be wasted.

    By the way, I have not been told to stop eating meat. Equally, I will not tell others what to eat. Think you are confusing the UK with N. Korea.

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