Industry

Company profile: UK Oil & Gas plc

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As UK Oil & Gas publishes its latest results, DrillOrDrop reviews the company’s holdings, finances, plans and personnel.

The company reported a loss after tax of £16.7m for the 12 months to September 2018, compared with £2.268m for the same period a year before.

The figures included exploration and evaluation write-offs of £11.56m for sites at Broadford Bridge and Holmwood/Leith Hill and higher administrative costs.

But there were also increases in cash levels and total assets.


Licences

Interests

PL211 Horndean, Hampshire, 10%

PEDL070 Avington, Hampshire, 5%

PEDL126 Markwells Wood, West Sussex, 100%, operator

PEDL137 Horse Hill, Surrey, 50.64%,

PEDL143 Holmwood/Leith Hill, Surrey, 40%, operator subject to transfer consent

PEDL234 Broadford Bridge, West Sussex, 100%, operator

PEDL246 Horse Hill, Surrey, 50.64%

PEDL331 Isle of Wight onshore, 95%, operator

southern exploration licences

Licences in southern England. Map: Oil and Gas Authority

Recent acquisitions/relinquishments

25 September 2018: Acquired further 22% in Horse Hill Developments Ltd, which increased the company’s holding to 71.9%

9 July 2018: IGas relinquished PEDL233, Baxters Copse, West Sussex, in which UKOG held 50%

31 January 2018: UKOG relinquished P1916 offshore Isle of Wight (100%)

21 January 2019: UKOG purchased 30% interest in PEDL331 onshore Isle of Wight, which increased holding to 95%

20 February 2019: UKOG completed purchase of a further 6% increase in Horse Hill Developments Ltd, taking interest to 77.9%

14 March 2019: Europa transfers operatorship of PEDL143 to UKOG, subject to Oil & Gas Authority consent


Sites

Producing

  • Horndean, Hampshire: 140-150 barrels of oil per day (bopd)
  • Avington, Hampshire: currently shut in

Exploration/Appraisal

  • Broadford Bridge, West Sussex: BB-1/BB-1z currently suspended following wellbore damage and non-commercial well test
  • Holmwood, Surrey: site restored after renewal of lease refused
  • Horse Hill, Surrey: currently flow testing
  • Markwells Wood, West Sussex: plugged and abandoned, to be restored to woodland by end of 2019
1810 Horse Hill UKOG2

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

Horse Hill flow tests

On 15 March 2019, UKOG said flow tests in the Portland formation at Horse Hill had produced more than 10,000 barrels (bbl) and the Kimmeridge more than 25,000bbl. 165 tankers of crude oil has been sent for processing, mainly to the Hamble oil terminal.

The company said the Kimmeridge section of the well was currently shut in for a long-term pressure build up test.

The company has said repeatedly that operations at Horse Hill were not linked to an ongoing swarm of earthquakes centred on Newdigate, which began on 1 April 2018.


Plans

Based on annual report for year ending September 2018

PEDL126, Markwells Wood, West Sussex

2019: Landscape restored back to woodland, using original top soil

PEDL137/246, Horse Hill

Spring 2019: Drill horizontal Portland well HH-2 and carry out long-term test. Target production levels 720-1080bopd

Spring 2019: Application for long-term production and four additional wells due to be decided by Surrey County Council

End 2019: Start of long-term production, subject to permissions

PEDL234: Broadford Bridge, West Sussex

Date not given: Drill and test a further sidetrack well, BB-1y

2020: Appraise BB-1y and long-term well test

PEDL234: Dunsfold/Loxley, Surrey

Dunsfold Google Maps small

Location (marked in white) of UKOG’s Dunsfold site and access track, based on information in the company’s leaflet. Image source: Google Maps

Spring 2019: Submit planning application to drill, core, test Loxley-1 well targeting Portland gas accumulation and core/test underlying Kimmeridge

2020: Spud Loxley-1

Date not given: If successful, drill and test horizontal sidetrack, Loxley-1z, within Portland and carry out long-term test to establish viability

PEDL331, Arreton, onshore Isle of Wight

Late spring 2019: Apply for planning permission to drill and test exploration well, to be called Arreton-3

Early 2020: Drill and test Arreton-3 in Portland and Kimmeridge

Date not given: If Arreton-3 is successful, drill and carry out long-term test of horizontal sidetrack, Arreton-3z

Date not given: If Arreton-3 is encouraging, drill, core, test vertical pilot well in Arreton South prospect

Date not given: If Arreton South pilot well is encouraging, drill and test horizontal sidetrack


Company

Structure

Parent company: UK Oil & Gas plc

Subsidiary companies (Proportion held by UKOG plc in brackets): UKOG (GB) Limited (100%); UKOG Solent Limited (100%); UKOG Weald Limited (100%); UKOG (234) Limited – previously Kimmeridge Oil & Gas Limited (100%); Horse Hill Developments Ltd (77.9%); UKOG (KOGL) Ltd – previously Kimmeridge Energy Limited (100%); UK Oil & Gas Investments Limited – previously UK Oil & Gas Limited (100%)

Status

UKOG plc was readmited to the AIM junior stock market on 1 August 2018 as an oil and gas operating company

Key personnel

Stephen Sanderson DrillOrDropsmall

Stephen Sanderson. Photo: DrillOrDrop

Chief executive: Stephen Sanderson

Non-executive chairman: Allen Howard

Finance director: Kiran Morzaria

Non-executive director: Nicholas Mardon Taylor

Staff numbers

Year ending September 2018

Administration: 4

Operations: 2

Pay

Total director’s pay: £744,000 (2017: £645,000)

Total Stephen Sanderson’s pay: £584,000 (2017: £339,000)

Stated company aim

Stephen Sanderson said on 15 March 2019:

“Our stated aim is to become the largest oil producer in the Weald Basin and amongst the top three UK onshore oil producing companies by winter 2019/20.”


Injunction

180703 UKOG injunction DoD 1

Opponents of the UKOG injunction outside the High Court in London, 3 July 2018. Photo: DrillOrDrop

On 3 September 2018, UKOG was granted an injunction against protests outside sites at Broadford Bridge and Horse Hill and its Guildford headquarters. The Court of Appeal is to hear a challenge against the injunction in June 2019.


 

Finances

Key financial figures

All for year ending 30 September 2018 and, in brackets, for the previous 12 months

Production: 137 bopd

Operating costs: £18/bbl

Income: £0.23m from Horndean

Revenue: £0.225m (2017: £0.207m)

Gross profit: £0.128m (2017: £0.047m)

Costs of sales: -£0.097m (2017: -£0.254m)

Administrative costs: £3.24m (2017: £1.86m)

Legal and AIM related expenses: £1.1m (2017: £0.36m)

Operating loss: £3.76m (2017: £2.40m)

Loss on ordinary activities after taxation: £16.747m (2017: 2.268m)

Exploration and evaluation write off: £11.56m
                                    BB-1 well and B-1z test: £9.25m
                                    Holmwood: £1.21m

Loss before taxation: £16.75m (2017: £2.27m

Decommissioning expense: £0.697m (2017 -)

Net cash outflow from operating activities: £2.82m (2017: £1.85m)

Cash outflow from investing activities: £3.53m (2017: £8.2m)

Cash and cash equivalent at end of period: £12.43m (2017: £1.75m)

Total current assets: £13.65m (2017: £5.54m)

Total non-current assets: £31.0m (2017: £21.71m)

Exploration and evaluation assets: £22.6m (2017: £15.11m)

Total assets: £44.65m (2017:£27.25m)

Total current liabilities: £6.5m (2017: £3.73m)

Total non-current liabilities: £1.34m (2017: 0.36m)

Total liabilities: £7.86m (2017: £4.08m)

46 replies »

  1. No controversy, Passepartout. Did you not see the recent report that the majority of UK residents are more relaxed than others about individuals who are successful?

    So, in addition to the £hundreds of millions INEOS pays in UK taxes, Sir Jim plonks around £150m into sponsoring British sport, and then a lot more into fitness in British schools, and then more into African charities and more into environmental projects. Now, to me, that is a pretty good balance. Allow the Government to inefficiently use the tax your businesses pay, but manage your tax affairs so you can decide yourself how to allocate what you don’t allow the Government to waste. Suspect you do the same yourself, Passepartout, but on a smaller scale.

    On top of which he has even expanded the market for BMW engines, so reaction may be able to trade in his diesel!

      • Huston, we have a problem….

        Seven petrochemical tanks on fire in Huston Texas, great palls of toxic smoke over the city.

        https://www.bloomberg.com/news/articles/2019-03-18/houston-oil-tank-fire-sends-black-smoke-billowing-into-texas-sky

        Drinking water in UK may become scarce by 2025. Rivers may dry up by 80%, projections predict water scarcity caused by lack of planning to conserve water is the equivalent of “blowing cigarette smoke into the face of a baby”. Fracking and its associated avoidances’ of the word can use more than 10,000 litres of clean water per well per extraction.
        The equivalent of blowing cigarette smoke into the face of all children and future generations babies….

        Apparently Sir Hugh Janus has been feeding the whales from his plastic yachts again, young whales found washed up dead on beaches around the world with stomach’s full of plastic waste, up to 80 kg in one case.
        The whales died of suffocation and starvation due to their stomachs being full of indigestible plastic.
        Perhaps the whales are splitting their sides with hilarity at the human races poisoning of the oceans, or perhaps their sides are splitting because of all that poisonous plastic in their stomachs?

        Elsewhere thousands of turtles and cuttlefish are dying on beaches.

        Clearly the oceans are turning toxic due to anthropogenic activities.

        Forgive me if I dont split my sides with hilarity at the insane suicidal and genocidal activities of my fellow man, or will i split my sides with ingested micro plastic?

        Funny, isn’t it?

          • Moves for clean air inside and outside of schools with demonstrations of “playing dead” outside schools and “park and stride” to encourage walking to schools, banning drop off running engines and identifying industrial activities near to schools. Growing plants inside school buildings and having independent air quality measurement activities.
            https://www.theguardian.com/environment/2018/jul/13/uk-schools-move-to-ban-the-school-run-to-protect-pupils-from-air-pollution
            Activities from Glasgow to Ellesmere Port.
            Interesting moves considering the appeals at Ellesmere Port and elsewhere where schools are very close to fossil fuel exploration and extraction proposals.
            Perhaps this is little more than attempted government smoke and mirrors to appease the present protest upheaval against fossil fuel incursions in UK in school society as yet, but as we all now know, the school children are not so easily appeased and they will not stop there.

            • Of course this move for clean air in and near schools can also be used to overturn the planning officers “rolling over and playing dead” complicity with the fossil fuel proposals for traffic near schools.
              This gives the councils a perfectly valid reason to refuse planning applications on traffic proposal grounds on order to provide nearby schools with a cleaner air environment.

              Amazing what a few school strikes can do isn’t it?

              And this is only the start of many more changes to come, whether the fossil fuel industry likes it or not.

              An interesting program on Radio 4 at the moment with Jim Al-Khalili talking to Professor Corinne le Quere who is a scientist working on climate science and explains about natural and anthropogenic CO2 proliferation.
              Well worth listening to or on listen again.

              (Jameel Sadik “Jim” Al-Khalili OBE FRS FInstP is a British theoretical physicist, author and broadcaster. He is Professor of Theoretical Physics and Chair in the Public Engagement in Science at the University of Surrey. He is a regular broadcaster and presenter of science programmes on BBC radio and television, and is a frequent commentator about science in other British media.)

              [Correction and additions at poster’s request]

  2. Perhaps defrock all the antis who drive BMWs Passepartout!

    Sorry reaction, it seems the “real” antis only allow those who buy British. Suspect your Shiraz is off the menu as well. Mead is an option.

    Shame the policy doesn’t equally apply to oil and gas.

    (It may be better for some to actually do a little research around the project. It is to produce a more reliable and better engineered equivalent. I suspect Sir Jim tried to find some British engineers but was put off by their confusion between veg. oil and diesel.)

    • “The end of climate change requires the end of capitalism. Do we have the stomach for it?”

      States The Guardian:

      https://www.theguardian.com/commentisfree/2019/mar/18/ending-climate-change-end-capitalism

      Which takes us back to whales whose stomachs have been found to be full of toxic plastic waste.

      I am sure that all the sea and land life do not have the stomach for toxic plastic waste, but we do indeed have the stomach to end the financial fraud and slavery called Neo Classical Economics that has usurped capitalism and mutated money into fiat currency with exponential debt, boom and bust built in to turn us all into willing but totally ignorant slaves to economics.

      Time to wake up and smell the roses folks, before we all wake up on a beach somewhere dying of toxic plastic credit card poisoning.

      The question really is, not that we don’t want to have the stomach to overturn neo classical economics that has filled our heart and stomachs full of toxic plastic debt.

      But that we have no other choice but to do so.

  3. Interesting to see the delusions amongst the “we”.

    I am sure most on this site have the intelligence to make up their own minds rather than be gathered into a group by the sheep dogs.

    • Of course it’s not only exponential financial debt insanity we are also using 4.5 times the earths resource capacity each year and are deeply in debt to future generations. The Earth overshoot day is now happening with increasing frequency each year.

      https://m.huffingtonpost.co.uk/entry/earth-overshoot-day-planet-resources_us_5b608a93e4b0de86f49b5162

      We continue financial insane suicide and ecological suicide at our own peril.

      To continue all those exponential debts at the same time is simply utterly insane.

      • Sorry that is not quite right regarding the overshoot day, the USA is now using 5 times the Earths available resources, collrctively and globally we are using 1.7 times the Earths available resources and that debt will be passed on to future generations and can only increase at our present rate of overconsumption.

        ““At the moment, we’re able to live in this ecological debt by using up the Earth’s future resources to operate our economies in the present ― in other words, we’re running a Ponzi scheme with our planet,” Mathis Wackernagel, CEO of Global Footprint Network, told HuffPost. “It might work for now, but as we dig ourselves deeper into debt it will eventually all fall apart.”

        Wackernagel said he is certain that humanity will move out of overshoot. “The question,” he said, “is whether we do so by design or by disaster.”

        Rampant deforestation, acute freshwater shortages, collapsing fisheries and dramatic biodiversity loss show some of the ways that our overuse of resources is already being felt.

        There’s a human cost to all of this, said Michael O’Heaney, executive director of environmental campaign group The Story of Stuff.

        “When we don’t live in harmony with the Earth’s ability to sustain itself, people get hurt ― you see ecosystem collapse in places primarily impacting poor people, people in the global south,” O’Heaney said.

        Research indicates that while the effects of climate change will be felt everywhere, the poorest nations will be hit hardest.

        Yet it’s some of the wealthiest countries that are creating the most ecological debt. If the world’s population lived like the U.S. currently does we would need five planets to sustain consumption levels, according to Global Footprint Network’s data. In contrast, if the world lived like India we would require only 0.7 of a planet to maintain annual resource demands.

        Globally, we’re using up nature 1.7 times faster than our planet’s ecosystems can regenerate. In other words, our planet relies on 1.7 planets worth of resources.”

        https://img.huffingtonpost.com/asset/5b608d7a200000de02378997.jpeg?ops=crop_35_20_562_948,scalefit_630_noupscale

        So collectively, globally, we are still overshooting by 1.7 times our available resources each year and that overshoot day is getting earlier and earlier in the year. The UK is using 2.9 times our own available resources every year.

        Hardly an intelligent attitude towards our own environment and of course the moves to resurect fracking and all the other avoidances of the word activities, will only make that overshoot much much more frequent.

    • Inside the mind of a climate change scientist | Corinne Le Quéré | TEDxWarwick

      In a lighthearted but highly relevant talk, Corinne discusses the ever-pressing issue of climate change – from the perspective of a climate scientist who is no longer trying to convince you that the threat is real. Professor Corinne Le Quéré FRS is the Director of the Tyndall Centre for Climate Change Research and a Professor of Climate Change Science and Policy at the University of East Anglia. In 2017, she chaired the International Panel of the ‘Make the Planet Great Again’ campaign led by French President Emmanuel Macron, which awarded grants to outstanding climate scientists around the world. Le Quéré also initiates and directs the yearly update of the Global Carbon Budget, a publication by the Global Carbon Project which aims to inform readers about the latest developments in global and national carbon cycle changes. A member of the UK Committee on Climate Change and author of the 3rd, 4th and 5th Assessments of the Intergovernmental Panel on Climate Change, Corinne has contributed to advances in the quantification of the causes and trends of atmospheric carbon dioxide as well as the use and development of carbon cycle models in carbon budgets. This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at https://www.ted.com/tedx

      • https://theecologist.org/2019/mar/08/generation-symbiocene

        Dr Glenn Albrecht is freelance environmental philosopher and farmosopher. He has pioneered the domain of psychoterratic or psyche – earth relationships with his concept of solastalgia. He is the author of Earth Emotions: New Words for a New World and writes at Psychoterratica. forthcoming book, Earth Emotions, he makes the case for a generational change where the post-baby boomer generations unite to form a new social movement.

        “I call this united movement, Generation Symbiocene or Gen S. Gen S will lead the rest of humanity into the Symbiocene.

        In the essay, After the Anthropocene, recently published in this journal, I made the case for a new epoch in human history: the Symbiocene. The Symbiocene is a meme that represents the very opposite of the period of human dominance known as the Anthropocene.

        The new meme has been created to achieve nothing less than complete change of the biophysical and emotional foundations of society from the ecocidal to the symbiotic, from the destructive to the nurturing.

        While the Anthropocene is generating despair and desolation, the Symbiocene gives generously of hope and optimism.”

        Generation symbiocene
        Glenn Albrecht | 8th March 2019

  4. ANTIS MOBILISATION ALERT:

    Better get up to Cumbria PhilC. How does this compare with a bit of shale gas exploration or conventional oil extraction in Surrey?

    https://www.thewestmorlandgazette.co.uk/news/17512326.undersea-mine-gets-go-ahead-in-cumbria/

    “PLANS to build a £165m undersea coal mine in West Cumbria have been given the green lights.

    The county council’s planning panel today approved the project by West Cumbria Mining, which is expected to create more than 500 jobs and give a boost to the area following the collapse of the Moorside nuclear investment deal.

    Coking coal will be extracted off the coast of St Bees, with a processing plant on the former Marchon site at Kells.”

    • This is from The Corbett Report by James Corbett, it outlines the fact that the operation of science and the way that samples are taken and how they are taken and how many samples are taken is not entirely what we expect unadulterated science to be and has become a forum for false positives dependent upon trawling for apparently statistically significant results called “pea hacking” and “data dredging”.

      The Corbett Report
      Episode 353 – The Crisis of Science

      This is the scientific paper which illustrates the problem with modern established science and “Why Most Published Research Findings Are False”. An interesting read, but i suggest you look at the Corbett Report video first to give you a explanation summary.

      Report Paper By John P.A. Ioannidis

      https://doi.org/10.1371/journal.pmed.0020124

      Fascinating read.

      [Typo corrected at poster’s request]

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