14th Licensing Round

UKOG shares fall on news of Horse Hill well test

1909 Horse Hill UKOG

Drilling rig at Horse Hill, Surrey, September 2019. Photo: UK Oil & Gas plc

Shares in UK Oil & Gas plc fell 8% today following a statement on testing its new well at the Horse Hill site near Gatwick Airport.

The price dipped to 0.85p, the lowest level for four months.

UKOG told investors it had successfully completed the first phase of the extended well test on the horizontal well, Horse Hill-2z (HH-2z).

But the statement also revealed that the well had identified formation water. It said this was thought to be from an open natural fracture at the far end of the well.

Intervention is planned to shut off the water source in the New Year, UKOG said.

The initial flow rate was up to 1,087 barrels of fluid per day, the statement said, with the oil cuts (proportion of oil) up to 60%.

UKOG’s chief executive, Stephen Sanderson, said:

“Our team’s efforts are now firmly focused upon the routine elimination of water ingress and the continued optimisation of HH-2z’s near-wellbore, both of which are designed to ensure HH-2z can deliver the best possible stable oil production rates over the coming year.”

The company said formation water produced during the long-term production phase, which would follow the extended HH-2z well test, was likely to be reinjected. This would maintain reservoir pressure and minimise the cost of water disposal, UKOG said.

Horse Hill does not yet have a water reinjection well. It received planning permission for one in September 2019. It has also applied for a variation of the environmental permit to allow water reinjection. This application has not yet been decided.

Mr Sanderson said he was “very encouraged” by the initial flow rates:

“These confirm that HH-2z’s horizontal trajectory can deliver flow rates from the Portland sweet-spot that significantly exceed those delivered by the HH-1 vertical discovery well.”

HH-1 intervention

UKOG said it was also planning an intervention on the first well at the site, the vertical HH-1.

This would “further optimise” both Kimmeridge and Portland test production from the well, the company said.

The statement said dry Kimmeridge oil flow resumed from HH-1 on 18 December 2019 when HH-2z was shut in for a pressure build-up test. The average daily flow rate from HH-1 was 301 barrels of oil per day.

Field development plan

The statement also said it had submitted a field development plan to the Oil & Gas Authority. This sought consent for long-term production from HH-1 and HH-2z.

11 replies »

  1. 1087 barrels a day based on half an hour’s flow test is pie in the sky , UKOG said the same at Broadford Bridge, seems like investors are wising up to the Bull .

  2. If the Tory government allow fracking in leafy Surrey in a strong Tory voting area,what hope will their be for the rest of us?Tory votes are most at risk there and they count more in the government’s eyes than somewhere like Yorks,Lancs and the Midlands let alone the NE and NW,out of sight out of mind.To Tories it is known as “the desolate north”.Maybe it’s fracking that precipitates the end current northern self-delusion that a Tory governent never has been,never will be.or is now on your side.

  3. Well, Peter, as there has not been, and there are no plans, for fracking in leafy Surrey perhaps you could find something more realistic to worry about? Take a leaf out of Jono’s book and worry about AIM share prices in December/January period-as if they are not routinely all over the place. But, no need to worry if you do your research and concentrate upon the fundamentals.

    Happy Christmas.

    • Ukog have stated many times that they do not use Hydrolic fracking & will not use Hydrolic fracking.

      Many hear try to use this scaremongering to bring activists to there cause for there own purposes.

      This is certainly not in the best interests of the British public.

  4. Another doomed company. The only steady ‘flow’ is cash pouring out of mug punters pockets and being pumped into Directors bank accounts.
    So much money lost by so many in such a short time.

  5. Lots of comments about UKOG performance by Derampers and Rampers on LSE

    Plus…nearly the end of the year end share price guess competition.

    https://www.lse.co.uk/SharePrice.asp?shareprice=UKOG&share=Uk-Oil-and-Gas

    However. …. For those following the Portland depressurising seismic activity theory the amount produced would be good to know.

    The geosierra theory being one of a few knocking about ( click on the report in the link ).

    http://geosierra.com/news.html

  6. Poor John. Must have missed the opportunity to make 10-15% profit on UKOG yesterday! Perhaps the mug punters are brighter than some of the mugs posting about them.

  7. The Kimmeridge is a duster without fracking.

    Anyone suggesting otherwise has either failed to understand this, or they have their own reasons for misrepresenting the possibilities.

    • Dorkinian

      There are none so blind as those that do not want to see?

      I have watched the Kimmeridge flow about 50,000 barrels of oil without fracking in flow tests at HH .

      Are you looking in the wrong place for the truth or just trying to delude yourself & others?

  8. I think Dorkinian has his/her own reasons for misrepresenting the possibilities, MH. Not the first time that in the face of actual evidence the contrary has been suggested.

    My kids did that until they were around 6! After that age, they realised it made them look foolish and their comments would not be trusted if they continued.

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