Industry

UKOG sets out plans for the Weald

1810 Horse Hill UKOG2

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

UKOG published half-year results this morning with details of its exploration and appraisal work in southern England.

Horse Hill, Surrey

181220 Horse Hill site plan HHDL

Site plan for the proposed extension to the Horse Hill oil site in Surrey. Source: Horse Hill Developments Ltd

UKOG said it had started construction work and site reorganisation for what it called  simultaneous drilling.

The programme would drill a new vertical pilot well (HH-2) and a horizontal side track (HH-2z) into the Portland oil formation, the company said. It would also include test production from the deeper Kimmeridge layers in the existing HH-1 well.

Drilling was expected to start in the period July-September 2019, following approval from the Oil & Gas Authority.

The HH-2 vertical pilot hole would be deepened into the Kimmeridge to obtain key fracture imaging and rock data, the company said. This would confirm the orientation of a planned HH-1z sidetrack.

A planning application for four additional production wells, a water reinjection well and long-term oil production was now due to be considered by Surrey County Council’s planning committee in September 2019.

A permit application for production had been submitted to the Environment Agency, UKOG said. A field development plan was also being prepared.

UKOG now holds a 77.9% stake in Horse Hill Developments Ltd (HHDL), the Horse Hill operating company, and a 50.635% interest in the Horse Hill field.

The Portland oil pool is commercially viable at oil prices “significantly below current levels the company has concluded. Portland production remains at 220 barrels per day (bopd), the company said.

Kimmeridge oil during an initial 50-hour test produced 563-771 bopd from KL3 zone.

UKOG said it remained “very positive” about the commercial potential of Kimmeridge oil. But it said it would reduce risks by starting the full-scale development of the Portland production first, followed by development of the Kimmeridge.

Arreton, Isle of Wight

PEDL331 Map updated

UKOG said it had selected three drilling sites.

The first planning application for appraisal drilling and well test would be submitted this summer. A second application for an exploration well would “follow shortly afterwards”.

The company said any drilling operations would be in the autumn and winter to avoid the tourist season.

UKOG holds 95% of PEDL331 on the Isle of Wight. It remained a “key focus area”, the company said.

Broadford Bridge, West Sussex

There were no activities in the six months to March 2019, UKOG said, apart from monitoring of downhole pressure and routine visits.

Loxley/Godley Bridge/Dunsfold, Surrey

Section of Dunsfold boreholes UKOG

Proposed boreholes at Loxley near Dunsfold in Surrey. Source: UKOG planning application

UKOG has submitted an application for drilling to appraise the Godley Bridge gas field at a site between Loxley and Dunsfold in Surrey. A decision is expected before the end of the year, UKOG said.

The proposal is for a pilot hole, horizontal sidetrack and testing programme. If approved, this would follow further production drilling at Horse Hill, the company said. A permit application would be submitted shortly to the Environment Agency, it added.

PEDL143, near Dorking, Surrey

pedl143

PEDL143 in Surrey. Map: Oil & Gas Authority

UKOG said it was making “good progress” in finding drilling locations.

The prospect, formerly known as Holmwood, is now referred to as A24, after the main road through the area.

A former wellsite at Bury Hill Wood was in the Surrey Hills Area of Outstanding Natural Beauty (AONB). It had planning permission and an environmental permit. But it was abandoned before drilling when the Environment Secretary, Michael Gove, refused to renew a lease on Forestry Commission land.

The new sites are outside the AONB, UKOG said.

Operation of the licence has transferred from Europa Oil & Gas to UKOG, which now holds 67.5%.

Markwells Wood, West Sussex

UKOG said the well was successfully plugged and abandoned and the site restored. Native trees would be planted in the autumn, the company said.

New opportunities

UKOG said:

“We are currently actively evaluating several opportunities both in the Weald Basin and overseas”

It raised £3.5m in a share placing in March 2019 to assess and acquire new opportunities.

Key figures

Aggregate total test production: 54,000 barrels (bbls), of which 29,000 was from the Portland and more tha n 25,000 from the Kimmeridge

Tankers sold to Perenco and sent to the Esso refinery at Fawley: 250+

Receipts from sale of test crude oil in six months to March 2019: £1.62m

Operating loss: £1.56m; six months to 31 March 2018 £3.87m – lower depletion and impairment charges

Administrative expenses: £1.56m; six months to 31 March 2018 £0.93m – increased employment costs

Net cash outflow from operations: £3.45m; six months to 31 March 2018 £1.76m – reduction in trade payables, increase in abandonment expense and increase in admin expenses

Net cash outflow from investing activities: £1.69m; six months to 31 March 2018 £5.02m – receipts from sale of test volumes

Cash outflows prior to financing activities: £5.15m; six months to 31 March 2018 £6.79m – lower net cash outflow from investing

Cash and cash equivalents: £7.2m; six months to 31 March 2018 £4.5m

Expenditure on exploration and evaluation assets: £3.31m; six months to 31 March 2018 £4.95m

Link

UKOG interim results for the six months to March 2019

Updated 29/6/2019 to replace Isle of Wight map with updated version

20 replies »

  1. The Kimmeridge is just a white elephant, it won’t flow without stimulating or fracking just like Brockham. Remember Paul Vonk said Brockham is a mirror of Horse Hill, no CPR for Kimmeridge is suspicious along with the focus now on the Portland says it all. Investors beware, all you are doing is feeding Sanderson.

  2. That is a valid point, thanks. It makes one think however how did the Kimmeridge flow 25k barrels at HH? Is the Kimmeridge mature in certain parts of the weald (which is what UKOG are trying to evaluate)? If yes where are these zones? Can they be identified and thereafter commercialised keeping a balance between our energy demand, economics and environment? The Kimmeridge could well be the white elephant, but it is equally probable that it is a sleeping elephant. Thanks for your note of caution.

  3. I’m really concerned about where UKOG might want to drill in Beare Green / The Holmwoods as I’m the District Councillor there.
    Has anyone any information on this. Europa listed a site years ago in Beare Green and I have it marked on a map, but consultation with the Parish Council council on the Draft Local Plan proposed 55 houses on the same site.

  4. ATTENTION!

    Slip of the English there, Jack!

    They’re is what the Bot should be set to. A shortening of “they are”. Difficult language English, but a valiant attempt.

    • MARTIN ,

      It’s OK , you stick to picking out minnor spelling errors, If dat majes you happy.

      OOPS , there’s a few, you now have something productive to do with your time this evening……

      IF that’s the best a fanatical PRO fracker can do , we know your well and truly on fracking ropes .

      MARTIN, just leave the real business of the day to your friend jackthelad ….

      PS ……… As a point of interest Ladies and Gentleman, a BOT, ( an autonomous program on a network (especially the Internet) which can interact with systems or users, )……… CAN NOT GIVE YOU an appropriate and accurate response, if you have spelling errors in your words .. In such casses, it’s response will always be to try and belittle you in order to make sure you are more accurate with your spelkung in the future . ( OOOPS there’s more spelling errors. )

      As you live on this website MARTIN , are you a BOT ??????

      I will continue with my computers predictive text writing system , if this causes problems for you BOT MARTIN, I’m sorry ….

      IF you are not a BOT, MARTIN , then please by all means continue checking my messages for spelling errors…. Your good freind jackthelad is happy knowing he’s giving you something rewarding to do , that fills your idle days with minor pleasures.

  5. “they’re changing their uniforms over there”. An easy test and prone to a classic error, ermm Jack.

    But, not to worry. I’ll provide the next answer-123 metres, to keep you out of further problems. LOL

    Might be safer to stick with links. Although, last time I checked one of the ones you posted, that stated something quite different to what you were suggesting! Something about Tesla making a profit-except the sub title showed that it was for all of a nanosecond.

    Oh, just to be extra helpful-it is possible to correct predictive text before you send. Of course, that is if you wish to be seen as someone who does check what “he” posts.

    Time for my film now. Night night.

    • AHH MARTIN ,

      I was wondering when you would bring up your number one pet hate ……. The electric car manufacturer, TESLA.

      I’d be careful MARTIN, this obsession with TESLA is going to start raising some eyebrows with other forum members ……. Although not with your understanding, good friend jack of course…

      MARTIN , please get of your chest what’s now upsetting you about TESLA …. Please be accurate and precise, so that jack can answer all your questions/comments correctly …..

      • MARTIN,

        Whilst your at it,

        What are your thoughts on IGAS and INEOS, quietly, now 6 years later trying to sneak back to FRACK on land at Barton Moss , Manchester , against the strong will of the people living in that area ????????

        http://www.salfordstar.com/article.asp?id=4925

        If you want to see how strong those feelings were against IGAS back in 2013, 2014, just take a look at the YouTube videos .

      • Nothing upsets me regarding Tesla, Jack. I quite like Mr.Musk and do believe he is a decent scientist.

        However, Tesla demonstrates continually that PR/spin is no substitute for sound commerce. Just a bigger version of what used to appear in the Annuals for lads comics. “This is what the future looks like” feature. But, then as the lads grew older they quickly (or some) realised that the future didn’t turn out that way because what is possible is not the same as commercial, and the commercial is all to do with costs and customers being willing to pay, compared to alternatives.

        I do find it interesting though that the antis place their faith in alternatives that are so far adrift of what the MAJORITY find acceptable, and then FALSELY claim the alternative is something that it isn’t-like PROFITABLE. Creative accounting and creative carbon accounting-seems to be a theme there!

        But rather than try and “turn” me Jack, why not answer this question?

        If we are to have our gas boilers converted to hydrogen, our trains to run on hydrogen, why not have our vehicles driven by hydrogen? Already being done in some countries, vehicles already there-although some further development needed. No requirement for a huge infrastructure investment, existing service stations utilised.

        • Oh, by the way Jack:

          “Oil giants to extend curbs…..in an effort to shore up prices.”

          Why, Jack?

          “Prices have since fallen, dipping below $60 a barrel at one point amid RESURGENT SHALE OIL production in the US, which is not party to the agreement (OPEC)”!!!!!

          Good job we enjoy that “bankrupt, Ponzi”, sector keeping our costs of living under control! Until £1 TRILLION of our money is called upon!

        • Tesla mission statement

          ‘To accelerate the world’s transition to sustainable energy’

          If you are worried about cobalt,

          Cobalt is being steadily removed from battery cathodes, and makes up just 5% to 10% in the latest generation of chemistries (e.g. Tesla’s NCA and CATL’s NCM 811), down from 33% of the cathode in recent generations. With time, cobalt will be removed almost entirely.

          A pity Donald Trump hasn’t listened to Elon Musk,

          https://www.inverse.com/article/34239-how-many-solar-panels-to-power-the-usa

          Seeing as Tesla is the most technically advanced company in the world regarding battery storage you would think Donald might have twigged it would be a good idea to listen to what Elon has to say.

          ‘Mr.Musk and do believe he is a decent scientist’

          If the US want to keep putting things in space they need to remember it is Elon Musk that is allowing it to happen as NASA are way behind.

          • Well, John, another of your alternatives crashed!

            “Hurricane plugs well”.

            (Warwick Deep-plugged and abandoned as oil would not flow.)

            Good job the “resurgent” American frackers are holding down the price of oil globally, and allowing some to heat and eat rather than chose which to do.

          • Why not indeed John – these are the things holding it up at present:

            1. Hydrogen fuel cells do not work in every situation as of yet.
            We need to store our fuel resources at the moment so that we can use them when they are needed. The only way to maintain hydrogen is to use up to 700 bars of pressure or keep it as a liquid at a low temperature. That means you must use additional energy to maintain this resource until you want to use it. Since that requires compression, failing to do so can increase the combustibility of this fuel, lowering its upper flammability limits by up to 75%. You can even experience this disadvantage with a slow leak from the fuel cell itself.

            We still see blimps flying in the sky over sporting events, but the reason why we don’t use them for mass transportation is because of this specific disadvantage.

            2. You must regulate the temperature of a hydrogen fuel cell to maximize its use.
            If you want to operate a hydrogen fuel cell at its rate of highest efficiency, then you must maintain temperature conditions below 212°F at all times. When temperatures rise above this level, then you will not receive the same levels of fuel efficiency when driving. The polymer exchange membranes that are part of the composition of the fuel cell do not work well when exposed to high heat levels, which is why a conversion from gasoline to hydrogen does not usually happen. The traditional internal combustion engine produces too much heat.

            3. There are still some risks to the environment to consider with hydrogen fuel cells.
            If we were to release hydrogen as a gas into our environment in significant quantities, then we would create a negative impact on the ozone layer that could be as severe as what CFCs did in the generation before. Although it would require an extensive hydrogen economy that included transportation, manufacturing, and home heating to accomplish this disadvantage, it is an issue which should not be overlooked. We cannot allow the gas to accumulate if we want to continue working to improve the environment.

            Adding hydrogen to our atmosphere would create more water at a higher altitude. That means we could experience higher levels of radiation at ground level, see mutations in plants, and shifts in our weather patterns which could change our growing seasons.

            4. The cost to store hydrogen is expensive enough that it is prohibitive for most people.
            Since 2006, the cost estimates for hydrogen fuel cell storage have decreased by more than 50%, but it is also still at $53 per kilowatt when looking at the stacks needed for a modern automobile. These expenses are far higher than what we experience with gasoline, especially when you look at the expense of gas separation instead of hydrocarbon refinement. The cost is still lower than electricity when looking at this disadvantage from an automotive standpoint, but it is still cheaper at this moment to operate on diesel, gasoline, or propane when you have a specific need to address.

            5. There are transportation losses to consider with hydrogen as well.
            Because of the stability of hydrogen in a fuel cell, it is an exciting technology that many industries are looking at right now to see if it can help to create new efficiencies. We must transport this gas or liquid from its processing center to fuel cell storage, which means there will be an issue of energy loss when looking at this fuel for an option.

            When you look at the normal rate of loss from boiling off with hydrogen, an outcome of 20% or lower is not unusual. As you introduce the manufacturing processes needed to create the fuel cell, then the losses can peak at 50%. It is expected to lose at least 1% of your overall product for every day of transportation required with this resource. That means our only option is to build manufacturing facilities that are close to our production resources to reduce the amount of total loss.

            6. It costs more to transport hydrogen than it does most other fuels.
            Although the installation cost of pipeline construction, shipping, and tanker movement for hydrogen have all gone down by up to 90% since the 1990s when fuel cells were first becoming available, there are still significant expenses to pay when installing the infrastructure necessary for this technology. Recent estimates show that it costs about $200,000 per mile to create a core network for moving gas or liquid versions of this fuel.

            It is because of this disadvantage that the price of hydrogen fuel is sometimes double that of standard gasoline. You can get twice the fuel economy out of it, but the overall fuel expense tends to even out at the end because of this issue. For many drivers, it might even cost more to drive with a fuel cell at the end of the day.

            7. This technology is not widely available right now.
            The only way that you can take advantage of hydrogen fuel cell technologies right now is if you live in an area where the sale of vehicles with it is permitted. That means Californians can purchase a car with it, and so can certain residents of Hawaii. There are currently only eight automobile dealers in the United States authorized to sell vehicles equipped with these fuel cells. As the purchaser, you must prove your residency to follow through with the purchase.

            That also means you cannot take a road trip with your vehicle if your round-trip distance exceeds the mileage range of your vehicle. According to the California Fuel Cell Partnership, there are only six stations that fall outside of the Los Angeles metro area, the Bay area, and Sacramento. Two of those fuel stations are in San Diego, one is in Santa Barbara, and there are two along the I-5 corridor between LA and San Francisco. The final option is on I-80 near the border with Nevada.

            8. You will pay a premium price to purchase equipment with hydrogen few cells.
            Although you can receive up to $15,000 of fuel with your purchase of a vehicle, you are still going to pay about $43,000 for an entry-level model that uses hydrogen as the fuel for driving. The MSRP for the 2019 Toyota Mirai is just under $60,000. You do have the option to sign a 36-month lease for this vehicle at an authorized dealer, but the monthly cost is about $350 per month if you have excellent credit. That means you’ll pay about three times more to access hydrogen technology when compared to a traditional gasoline car – even when you receive a complete fuel stipend over the lease or financing period.

            9. It is not currently a complete renewable energy resource.
            We do have the option to produce hydrogen from renewable resources, but there is not enough infrastructure in place right now to make it a viable option. That means we’re using fossil fuels to create hydrogen, so it isn’t as environmentally friendly as some proponents like to claim. There are still fewer emissions overall since we don’t create a carbon dioxide expense during consumption, but that is the only benefit right now. Everything up until the point of consumer use still pays the same greenhouse gas expense as any other hydrocarbon-based fuel that we use for transportation or home heating and cooling.

            I expect we will get there one day but for now we will continue to use fossil fuels.

            • Think you will find Hyundai ix35, whilst still a prototype, is in production Paul, and in use in Europe. 350 miles on a tank and 3 minutes to fill the tank. Very expensive currently and infrastructure not there yet in Europe. But the 350 miles and 3 minutes seems a compelling argument for further development especially if large volumes of hydrogen will need to be produced for domestic heating.

              If that hydrogen comes from gas, as suggested, then finding a means of utilising the carbon may be a problem but carbon, in the right form, is quite valuable, so I suspect that could be solved quite readily.

              We will see. 3 year lease on my petrol, having tried and rejected a hybrid, so by then might be a bit more clarity.

  6. Perhaps they should have a mission statement to include-“make a financial return for our investors”!!

    Trouble selling your wind turbines, John? Or trusting that the old days of £150k net profit per on shore turbine no matter whether the electricity is needed, or not?
    Sorry-all those new trees will exclude the space for turbines. Stick them out to sea-the turbines, not the trees.

    Still playing the cheap gas card? That worked well last time!

  7. Please can we only have comments relevant to the articles. People come on here to follow news, not for rants and childish behaviour.

  8. No, Wakeup, some come on for the “poetry”!!

    It is quite easy to read those comments you find relevant and ignore the rest. What is relevant to you, may be irrelevant to someone else. Bit like Pick & Mix.

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