UK Oil & Gas plc announced this morning its 50% acquisition in the Basur-Resan oil licence in south east Turkey has been officially approved. The company said it was now a named party on the licence.
UKOG said “rapid monetisation” of Basur-Resan was now possible within a year. It predicted that the licence had the potential to exceed estimates for oil and gas at UKOG’s yet-to-be-approved projects at Arreton on the Isle of Wight and Loxley/Dunsfold in Surrey.
UKOG reached agreement with the American firm, Aladdin Middle East Ltd, to buy into the licence in July 2020. At the time, UKOG described it as an “irresistible opportunity” that would “expose the company to potentially transformational oil reserves that can be rapidly monetised”.
UKOG’s chief executive, Stephen Sanderson, said today:
“It is now evident that, in the success case, the Basur-Resan appraisal project has the potential to surpass the recoverable oil and gas volumes currently assigned by Xodus to our material UK Arreton and Loxley appraisal projects.
“It also has the advantage of lower drilling and operating costs and, facilitated by Turkish petroleum law, the possibility to rapidly monetise the success case within a year. For these reasons success could be transformational for the Company.”
UKOG estimated the gross costs of drilling and testing the Basur-3 well at about £2.4m. This compared with about £6m spent on the similar depth Horse Hill-2 well in Surrey, the company said.
Mr Sanderson said UKOG would focus in the first half of 2021 on design and delivery of a Basur-3 appraisal well.
Other targets for the next six months included “further optimising” Horse Hill and pursuing an appeal against the refusal of drilling at Loxley, Mr Sanderson said.
Update 20/1/2021: Since this article was published, UKOG announced it had completed its transaction with Aladdin Middle East Ltd for half of the licence.