UKOG has announced that it has consent for long-term production from its Horse Hill site in Surrey from the Oil & Gas Authority (OGA).
In a statement this morning, the company said the OGA had also approved the Horse Hill field development plan.
The decision is significant because it means net recoverable reserves can be allocated to the company, allowing it to borrow money for future operations.
UKOG shares rose on the news. At the time of writing (13.10), they were up 33% at £0.5 pence.
UKOG’s chief executive, Stephen Sanderson, described the news as “an important regulatory milestone”. He said:
“The company can now focus firmly upon maximising stable production, reducing operating costs and generating positive cash flow.
“The ability to book reserves also opens the way to potential debt funding, a positive step towards both creation and preservation of shareholder value.”
UKOG also said the consent would allow it to enter into long-term field operations contracts. This could help reduce operating costs below $19 per barrel, it said. UKOG said this, in turn, would make the field more profitable even at current low oil prices.
The statement added that production from the Portland would begin from the Horse Hill-1 well, followed by Kimmeridge production in late spring. Production from the HH-2z well was planned to follow the extended well test, it said.
UKOG has planning permission for long-term oil production. It has also applied for an environmental permit for five new wells at the site and oil processing and storage facilities. A public consultation closed in November 2019.
So, events show this is an oil production site. “Expert” told us it wasn’t!
Interesting. Just goes to show even “expert” speculation stands no more chance than Mystic Meg.
Should give plenty of opportunity for some to practice their Nelson impersonations with the telescope to the blind eye, so, all is not lost.
Could you please remind me how many egg cups of oil have now been produced from Horse Hill?
A great day for UKOG & the UK despite all the misrepresentations & personal agenda’s, the star shines through.
Fantastic news not just for UKOG but the locals too as they will also gain from the 6% promised.
This is what Britain needs given the current uncertainty and oil wars between the power houses.
It’s going to 25 years realistically before the infrastructure is in place and we are ready for the switch to electric cars on mass.
Common sense has prevailed!!!!
Quite a lot, MH.
Even more than a puddle, probably as much as a pond, and we all know the Atlantic Ocean is referred to as the pond, so always an opportunity for some to cover their errors.
However, and there always is one, semantics is one thing, “expert” witness statements another.
Seems a never ending supply for the alternative sector. Only yesterday the implications of the N. Ireland energy nonsense (now known as “cash for ash”) were being debated. All being pressed as the way to go a few years ago, and here we are a few years later, several £ BILLIONS wasted, and all of N. Ireland having experienced a long period of misery. Yet, it will be forgotten and replaced by another such alternative, that will either not work, cost much more than expected, be years late, or a combination of all three. Lord Browne was talking about CCS in the Lords recently about the pitfalls, and I would suspect that any such scheme that private business has rejected, and Government have been loath to invest tax payers money in, could be the next one. Or, even, the Swansea Lagoon!
But, if an oil well ever becomes a duster-shock/horror. Those oilies don’t know what they are doing so let’s apply the precautionary principle and stop them!
I have been watching the wasps around the HH honey pot for a little while now. They have believed it was a nice source of sustenance for them but may be about to find out it was a trap. Not to worry, they would still reappear somewhere else, and go through the same routine-that’s what wasps do. Rentokil or injunctions? Both cost, but both do a job.
I think this is just a foundation for UKOG & there will be plenty more to come, the UK needs it if some like it or not.
I agree. This is NOT more oil FOR the UK, simply more oil FROM the UK. By having a little more from under our feet does NOT mean UK will suddenly decide to feast on the stuff. And, oil from the UK is much more environmentally friendly than that from over the horizon.
I saw an environmentalist/doctor moaning about the air quality in Southampton a few days ago, criticising the cruise industry! Hmm. Fawley Refinery actually cleans the water in the Solent, returning cleaner water than extracted for cooling purposes. Maybe, add to that even a reduction in a few ships? Everyone’s a winner-except those more interested in exporting oil to the UK and those it funds. They will soon find other markets.
For the locals, let’s hope HH is a success. 6% of something significant is far better than 6% of a puddle, and basically, with no greater inconvenience.
Not everyone will be happy, simply because you can’t please everyone. (My wife was whinging yesterday because there were no stocks of chlorinated chicken in Sainsburys! Anyone can be confused regarding a virus v bacteria.)
It will also help the balance of payments.
In 2018, the United Kingdom imported approximately 46 million metric tons of crude oil and natural gas, and exported approximately 43 million metric tons of the same.31 Jan 2020
That’s all very well but what’s the point?
Even UKOG* have admitted that “Flow tests and pressure data from the Broadford Bridge and Horse Hill Wells Sites have been sub-commercial”.
They have a “‘Geological Concept’, namely the presence of an open and continuous natural network of hydrocarbon deposits capable of flowing to surface without stimulation”, which has therefore failed, and are proposing to try a succession of different forms of stimulation to prove oil can flow without stimulation.
Good luck backing this old nag, you’ll need it.
*SCC Ref 2019-0072_planning_Loxley Well Site Planning Statement and Environmental Report 2019_0072.pdf p.22 of 47
BOTH the Portland and the Kimmeridge have been declared commercial, Dorkinian, at HH.
Ermm, I believe that might be why they requested and obtained, PRODUCTION consent!
Just a case of optimising the output and identifying HOW commercial, which may have something to do with prices of output as well as volume. The costs look low already, and a volume increase will only decrease them further.
As predicted, the telescope to the blind eye. And, pretty obvious who would be the first. There comes a time when credibility goes altogether -usually when the reality is still faced with denial.
It matters not a lot unless you have the MPA(SCC) and EA permissions to go with it.
The doc you refer to notes that they may try different forms of completion rather than different forms of stimulation ( which may be what you intended to say?).
The reference to sub commercial flow tests and pressure data is intetesting, I guess it could be amended tho the reasoning behind the well would be the same ( exploration )
Get ready for more and greater earthquakes