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

Unexpected changes to drilling at the Horse Hill oil site near Gatwick have surprised residents and raised concerns about planning consent.

People living near the site fear the revised proposals could lead to a dispute like one at Brockham in Surrey in 2018, when council planners said drilling went ahead without permission.

The Horse Hill changes will result in a different design of the well and an additional target formation, statements have revealed. One well, which was described as appraisal, is now expected to include exploration work.

The news emerged in a document from the Environment Agency and statements to the stock market by Horse Hill’s majority investor, UK Oil & Gas plc (UKOG).

It adds to an already complex picture of what is planned at the Horse Hill site. It also raises questions about regulation and prospects for the Kimmeridge oil formation.

Wells at Horse Hill

Horse Hill currently has one well, known as HH-1. This has targeted two formations: the Portland and Kimmeridge. The well was granted planning permission in January 2012 and drilled in 2014. A short flow test led to this well becoming nicknamed as the Gatwick Gusher but the rates were never repeated.

In 2017, planning permission was approved for a deviated horizontal well, to be called HH-2, and a separate sidetrack to HH-1, known as HH-1z. HH-2 would target the Portland, while HH-1z would target the Kimmeridge. The planning decision document made it clear that HH-1z would be drilled off the existing HH-1 well.

The work plan for the Horse Hill licence, agreed with the Oil & Gas Authority, required the Portland well (HH-2) to be drilled by 30 September 2018 and the Kimmeridge well (HH-1z) by 30 September 2019. The plan also included a total of 75km2 of seismic testing.

In a presentation in November 2018, UKOG said both HH-1z and HH-2 would be drilled in the second quarter of 2019. This didn’t happen.

In December 2018, the site operator and UKOG subsidiary, Horse Hill Developments Limited, applied to produce oil from the site for 20 years and drill four production wells, to be called HH-3, HH-4, HH-5 and HH-6. Surrey County Council is due to consider this application tomorrow (Wednesday 11 September).

Through the first few months of 2019, UKOG statements to investors (links here and here) continued to refer to the finalisation of plans to drill HH-1z and HH-2. As late as 17 May 2019, a UKOG statement said the extended well test on HH-1 would be switched from the Portland to the Kimmeridge, to allow the HH-2 well to be drilled.

First mention

On 11 June 2019 a UKOG statement indicated that the plans had changed. The company’s chief executive, Stephen Sanderson, said “the much awaited simultaneous HH-2/2z Portland horizontal drilling” was fast approaching. Work would begin in the second half of June, the statement said.

No drilling went ahead but it was the first time the company referred to the HH-2z well, a sidetrack off HH-2.

On 28 June 2019, a UKOG statement said:

“we have started the civil construction works and a site layout reorganisation that will see the simultaneous drilling of the new Portland horizontal development well, HH-2/2z.”

But instead of a deviated horizontal well, UKOG now referred to the HH-2 as a “vertical pilot hole” that would be drilled beyond the Portland into the Kimmeridge “to obtain key fracture imaging and rock data”.

The statement said:

“As previously reported, key approvals and necessary funding are in place for the forthcoming HH-2/2z drilling and testing programme.”

At this stage, there were no applications, permissions or documentation online about planning consent for another vertical well into the Kimmeridge or the HH-2z sidetrack. The environmental permit did not cover HH-2z.

In late August 2018, the Environment Agency varied the permit to allow drilling HH-2z and to allow the use of oil-based muds for drilling the following wells: “HH-1z sidetrack, HH-2 pilot hole, HH-2z sidetrack”.

Is permission needed?

A Freedom of Information request in August 2019 asked Surrey County Council whether HHDL needed to request a change to the planning permission because of the changes to HH-2 and HH-2z.

Surrey County Council replied:

“There is no recorded information held by the council that would answer the questions asked by you. The Act only obliges us to give access to recorded information held by us at the date of the request. It does not oblige us to give advice or make a comment or to otherwise create information that does not already exist.”

The council did, however, say:

“The development that has been approved permits the drilling of a second well and a sidetrack.”

This referred to HH-2, the second well, and HH-1z, the HH-1 sidetrack.

The council also said:

“Any changes to the naming/numbering of these wells will have no effect on the scale or nature of the development that was permitted.”

DrillOrDrop asked the council whether HH-2z needed planning permission. Despite a promise to respond, the council did not answer our question.

DrillOrDrop asked UKOG whether it had planning permission for HH-2z. The company did not answer. But a spokesperson said:

“HH-2 is a single well, being drilled as a vertical pilot (HH-2) and a sidetrack from HH-2 called HH-2z. This is oil industry and Oil and Gas Authority terminology.

“All horizontal wells require a pilot hole to determine where to position the sidetrack off it. The HH-2 well is a single well at surface, a single drilling activity and it respects the “zone of deviation” in the planning approval. This has been agreed with Surrey County Council.

“The delay in the drilling of HH-1z is covered in our stock exchange announcement of 28 June, which reads: ‘In order to confirm the best HH-1z horizontal well orientation able to intersect the maximum number of open oil-filled Kimmeridge natural fractures, the HH-2 vertical pilot hole will be deepened into the Kimmeridge to obtain key fracture imaging and rock data.’”

Campaigners against onshore oil drill dispute UKOG’s statement that all horizontal wells require a pilot hole.

Jane Sheppard, who lives in Hookwood, about a mile from Horse Hill, said:

“Where is the planning permission for a new exploratory well into the Kimmeridge?

“Planning permission for HH-2 was for a horizontal appraisal well targeting the Portland, and according to the licence agreement, it should have been completed by 30 Sept 2018, yet it’s never been drilled.

“It appears the UKOG are trying to pull the wool over Surrey County Council’s eyes, by renaming one of two horizontal appraisal wells they do have permission to drill at Horse Hill, and coming up with not two, but three wells.

“Are they taking the Planning and Regulatory Committee for fools, just as Angus Energy did over the sidetrack fiasco at Brockham?

“Horse Hill Developments must get planning permission from Surrey County Council for each well they drill.

“I want to know why they even need another exploratory well when they are supposed to be in the appraisal stage? And where are the 75 km2 of seismic surveys required by the OGA? Are they planning to drill without it?”

More questions

The HH-2/HH-2z issue suggests that UKOG is keen to produce from the Portland and raises questions about the Kimmeridge. On 28 June, the company said:

“Whilst we remain very positive on the future commercial potential of Kimmeridge oil play, we have assessed that, for risk mitigation purposes, we now plan that the Kimmeridge development, commencing with HH-1z, will likely follow the start of full-scale Portland production from Horse Hill.”

The revised drilling proposals at Horse Hills raises the following issues:

• Is UKOG drilling the new vertical well to find answers not resolved by the HH-1 well test?
• Is that why UKOG needs to carry out exploration in the Kimmeridge?
• Is UKOG prioritising the Portland through HH-2z to bring in revenue to fund the rest of the Horse Hill project?
• Is it helpful for the Environment Agency to refer to four wells (HH-1, HH-1z, HH-2 and HH-2z), when the county council appears to think there are just three?