Industry

Details on new production wells and water reinjection at Horse Hill – UKOG

The main investor at the Horse Hill oil site in Surrey has announced plans for two new production wells.

Horse Hill oil site. Photo: Used with the owner’s consent

UK Oil & Gas plc also said it would convert an existing well into a borehole for water reinjection.

Horse Hill has two existing wells, known as Horse Hill-1 (HH-1) and Horse Hill-2z (HH-2z). It also has planning permission for another four production wells.

But drilling the new wells is unlikely in the next few months. UKOG has said it would concentrate in the first half of 2021 on appraisal of its new licence in south east Turkey.

New wells

In a statement to investors this morning, UKOG said it had identified “several significant infill drilling opportunities” at Horse Hill.

This was the result of a “far better understanding of the Portland reservoir”, UKOG said, informed by data from:

  • Pressure build up test on HH-1 in November 2020
  • HH-2z cores
  • Revised seismic interpretation

One new well, to be called Horse Hill-3 (HH-3), would target the Portland oil formation, UKOG said. The well would be updip of (shallower) existing wells and above the oil-water contact, the company said.

The other new well, Horse Hill-4 (HH-4), would identify the lateral extent of the Kimmeridge oil pool. This would also be updip of existing wells. It was likely to be a highly inclined or slant well, the statement said. It would be a right-angles to the known regional open natural fracture and designed to maximise the number of open fractures that it would penetrate.

HH-3 and HH-4 would be planned and drilled following operations in the company’s Basur-Resan licence in south east Turkey planned for the first six months of 2021, the statement said.

UKOG said the pressure build-up test confirmed previously-reported oil-in-place of 7-11 million barrels in the Portland formation. Alba Mineral Resources plc, an investor in Horse Hill, said this “untapped production” could not be fully realised from HH-1 alone.

George Frangeskides, Alba’s executive chairman, said:

“The plans, therefore, to drill another two vertical wells up-dip of HH-1 are welcome, not least in the light of the sustained rally in the oil price over the past three quarters.”

He also said:

“HH-1 has already proven the Kimmeridge’s ability to contribute substantial production to the overall field, so there is certainly merit in testing the Kimmeridge’s producibility from a new vertical well.”

Water reinjection

Formation water in the oil has become a problem for Horse Hill.

The volume of formation water rose dramatically in June 2020 to 236 tonnes, up from 88 tonnes in May 2020. It fell slightly in September 2020, the most recent public figures available, but the ratio of oil to water fell to 2.1, down from 2.4 in August. DrillOrDrop report on most recent production data

UKOG said it planned to turn the HH-2z production well into a water reinjector. The company said this would save money on taking water offsite by tanker for disposal. It will also help to maximise oil recovery by supporting reservoir pressure, the company said.

Horse Hill has planning permission for a water reinjection well but consent would be needed from other regulators for the conversion from HH-2z. UKOG said the consent process was underway and a decision was expected in spring 2021.

In the meantime, UKOG said it aimed to maintain the proportion of water to oil at below current levels.

Production

The UKOG statement said the Horse Hill field has produced more than 132,000 barrels of oil from the Kimmeridge and Portland oil pools.

In the three months to December 2020, the company said HH-1 had produced 7,045 barrels from the Portland, despite well intervention work to improve oil flows.

HH-1 produced for 37% of time in October, the main period of the intervention, and 85% of time in November, after the work had finished.

Trials followed the intervention and are expected to continue for several months. UKOG said this aimed to “achieve an optimum balance between oil revenues and water handling and other operational costs”.

The statement said:

“Early results are encouraging, with stable water influx levels achieved by the end of 2020.”

Cost cutting

UKOG also said it had cut operating costs from January 2020-January 2021 by 66%. This was a response to “the challenging oil price environment”.

Stephen Sanderson, UKOG’s chief executive, said:

“We look forward to the conversion of HH-2z into a water injector in the Spring and to the resultant increase in net revenue from the reduction in water handling costs.

“The significant 66% reduction in general field operating costs over the past year also allows the field to take full advantage of the current strengthening oil price.”

50 replies »

  1. Fair play, PT? Depends upon the game that is being played.

    It is what it is. Maybe speculation/fabrication is what turns on some readers and those it turns off are not of too much concern. Except, I would “speculate” that DoD may then find it increasingly difficult to obtain the factual information it might desire from some of the companies.

    As there is so little going on with the on shore sites at the moment, maybe understandable.

    Many of the broadsheets have a daily host of headlines within quotation marks, that usually refer to the speculative nature of the article, so the game is widespread. Rarely corrected when time passes and the speculation has been shown by events to be false. There used to be some refuge if choices were made where to access information, but not too easy to make such choices now.

    As they say, the problem with common sense is that it is not that common. A problem to some, an opportunity for others. Hence a Guardian journalist suggesting Boris is about to call a snap election, to the BBC, and put out with BBC News below her image! Fair play for her, and the BBC it seems, and left to the common sense of the viewer-although I would suggest many viewers may need a warning that this was not news but speculation.

    It is what it is-widespread.

  2. [Edited by moderator]

    “Gut feelings, hunches and no proof are hardly sound engineering processes……”

    No Paul, that is quite mistaken i’m glad to say. If you have any understanding of how the human mind works, you will know that many so called hard nosed engineers grounded in nuts and bolts practically, have been strongly influenced by the “Gut feelings, hunches and no proof processes”.

    You only need to look at Sir Isaac Newton and his development of the conservation of energy laws, to know that he was a long term alchemist, and used those methods to formulate all sorts of theories that were supposed to be purely strictly from the left calculating hemisphere of the brain, but were clearly influenced, if not originating from the intuitive right hemisphere. Newton also has his famous “apple on the head” moment, whether that was apocryphal or not, but is seen as a historical fact none the less.

    There are others if you look, Francis Crick and James Watson spent years investigating the structure of Deoxyribonucleic acid (DNA). James Watson had a dream and saw DNA in the form of a spiral staircase. Francis’ wife Odile, a World War 2 code breaker and artist, was asked by Francis to draw the famous double spiral, but could not visualise it. Odile then had a dream which showed the double helix spiral and produced the famous drawing.

    There are children and adults who can solve complex mathematical problems quicker than a computer. When asked how they do, they had not done the calculations to get the answer, it just pops into their head, often with a colour, or a feeling, or a texture that always identifies to correct answer for them. There are also children who can simply touch a book, and then tell what is inside on each page.

    There is clearly something far more complex and fascinating about human consciousness that we have even begun to understand.

    Wolfgang Amadeus Mozart often dreamt entire compositions, and claimed on waking, that all he had to do was write them down. Archimedes may never have run naked through the streets shouting “Eureka!” following his own revelation of the displacement of water, but perhaps is was equally one of those “gut feeling” revelatory moments.

    So I wouldn’t exclude gut feelings out of hand, or anything else from human experience.

    “There are more things in heaven and earth, Horatio,
    Than are dreamt of in your philosophy.”

    – Hamlet (1.5.167-8), Hamlet to Horatio

    • Is that the same Sir Isaac Newton who lost most of his money SPECULATING on the South Sea Bubble???

      Oh yes, it is. I think the excuse at the time (1720!) was he, and others, were overtaken by irrational exuberance!

      When gut feelings overtake common sense, then even the most intelligent can end up looking foolish.

      • OMG! Such bitterness! Another one sucking lemons??? A bit sad really isnt it. but that is what we have come to expect isn’t it.

        Fascinating isnt it? How the subject of the post is ignored except to attempt to trash Sir Isaac Newton for trusting in the South Sea Company. Just as thousands of other people had also done so and all fell foul of the financial frauds and dodgy claims of profit from the South Sea Company.

        Which, incidentally as far as i am aware, was not created or engineered by Sir Isaac Newton at all in any way whatsoever. And had nothing whatsoever at all to do with his research into conservation of energy laws?

        Many thousands of people fell into the same fake financial trap, not just Sir Isaac Newton. But of course all this tirade is to attempt to trash anyone i talk about, that is obvious, i notice there is nothing about Watson and Crick and Mozart and the people who can do complex mathematical calculations without doing the necessary calculations.

        Looks like that same old same old desperation thing again doesn’t it? Are you going to blame Newton for wars and plagues too perhaps? Maybe his neighbour had a toothache once too? Are you going to blame him for that too? By all accounts as a person, he became quite angry and unapproachable in later life.

        [Corrections at poster’s request]

        However, looking a bit closer to 2021, it looks very much like like the fossil fuel bubble is going the same way? Are there any here who are deeply invested in the fossil fuel industry?

        Washington State Rejects Massive Fracked Gas-to-Methanol Refinery

        https://childrenshealthdefense.org/defender/washington-rejects-massive-methanol-refinery/

        Big Loss for Big Energy: Californians Win Right to Legally Challenge Dirty Power Plants

        https://childrenshealthdefense.org/defender/california-legally-challenge-dirty-power-plants/

        We will see how much the fossil fuel bubble will be vehemently defended in order to see just how trapped people become when they really believe in a “sure thing”. It looks like rabid Trump fanatics and and Qanon aficionados are finding their bubble well and truly burst! And Biden wants to ban fracking in USA and has already cancelled the Keystone pipeline

        Joe Biden Can’t Remember Vowing to Ban Fracking. We’ve Got the Video

        https://pjmedia.com/news-and-politics/matt-margolis/2020/10/22/joe-biden-doesnt-remember-vowing-to-ban-fracking-heres-the-video-n1079337

        Biden begins the end of fracking and destroys Keystone and 20,000 jobs

        https://www.independentsentinel.com/biden-begins-the-end-of-fracking-and-destroys-keystone-and-20000-jobs/

        I wonder how many ahhh, overconfident “fossil fuel investors” trusted the All these….errrm, “intelligent people” and are overtaken by irrational exuberance!

        But of course, when gut feelings overtake common sense, then even the most intelligent can end up looking foolish don’t they.

        How true that is!

        I said this would be a good year!

        • Didn’t a certain Jim Ratliff write a book called “The Alchemists”? Another one with “gut feelings” perhaps?

          Maybe Jim also had a “gut feeling” about investing in the fossil fuel bubble? Maybe even complicit in pumping it up?

          Oops!

          Maybe it’s time to disinvest before the fossil fuel bubble bursts?

          But no, lets keep quiet about it and let them all keep their investments in the fossil fuel bubble.

          But of course, when gut feelings overtake common sense, then even the most intelligent can end up looking foolish don’t they.

          It’s the street cleaners I feel sorry for………

  3. Obviously not read Sir Jim’s book, then!

    Actually, it was written for him, and is quite a good read about the way Ineos was developed. [Edited by moderator] Interesting bits about taxation, so a recommended read for those who need some up-dating.

    But for the snake oil scam there are indeed other options, such as putting forward speculation and someone yells from the crowd, “what a tremendous idea” here’s some proof it works, and then the proof is, on scrutiny, found to be flawed! Now, the Internet revival, but the same problem with a knowledgeable audience.

    Then, there is always the stage.

    For when the scam is exposed and the getaway is needed!

    Meanwhile, the price of oil has been rising steadily and is now back to exactly where the industry predicted some months ago-$55/barrel. If USA reduces production, the oil price will rise further, and those poor old investors will make even more money. What that would do for Biden might be interesting, as the US voters would not accept gas price rises during WW2, so, have their requirements changed? I suspect not, for a lot of them, so would not expect too much to be changed pre the mid term elections. So, you can wonder away, but others will do their research to identify the reality, and end up with knowledge to make their decisions.

    Also, meanwhile, putting the tax and the fossil fuel together, I am still waiting for how the £28 BILLION fuel duty currently raised in the UK every year will be replaced, without making currently overpriced EVs even more overpriced! Now, for those who like speculating, that just might mean many more hydrogen fueled cars, and the energy circle turns, and comes back not far from where it started. Hydrogen made for buses and trains, means hydrogen available more readily for cars-and tax much easier to collect. And those fossil fuel companies make even more for those poor investors.

    This speculation is fun!

    But, back to reality. Mrs. C has told me my Michelangelo defence of taking four years for his paint job, is not acceptable, as she has not agreed to an hourly rate. So, next phase needs completing today.

    • Ahhh, so its OK for “some” to have gut feelings about the fossil fuel bubble is it? From another one with “gut feelings” perhaps? Was he, and others, overtaken by irrational exuberance too!

      Arent alchemists when SPECULATING on the fossil fuel bubble, that have “gut feelings” that overtake common sense, in that parlance above. Then even the most intelligent can end up looking foolish don’t they…..whether they write about alchemy, or merely read about it?

      Hang on! I think i’m having a “gut feeling!” i’ll have to visit that burst bubble repository in the bathroom…..and disinvest…..

      Twas ever thus…..

      I’ll warn the street cleaners, its going to get messy……

      Enjoy!

      Enjoy!

  4. Oh dear.

    A nerve exposed there!

    Bit of a difference speculating about something already happening, and seen to be happening, and suggesting it may increase, (with the PM having recently answered a question in the House suggesting the same-and he has the ability to do something about it) than a gut feel of something might be happening without any evidence of it happening or having happened previously. Don’t disturb the Kraken, next? The beast could have travelled from Norway seeking new oil to feast upon, couldn’t it?

    Of course, no one will notice the difference!

    LOL.

    Think I will stick with the efficacious remedies.

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