UKOG gets more time for Loxley gas drilling

The industry regulator has given UK Oil & Gas plc more time to drill a gas well near the village of Dunsfold in Surrey, the company has announced.

Route of the proposed access track to Loxley well site near Dunsfold.
Photo: Surrey County Council

In a statement to investors, UKOG said the North Sea Transition Authority (NSTA) had extended the deadline for work to start on the well to 30 June 2024.

This is the second extension for a well to explore for gas near Dunsfold. The date was originally set for the end of December 2019.

In November 2020, the regulator, then called the Oil & Gas Authority, extended the deadline to the end of 2021.

UKOG was granted planning permission for the Loxley-1 well by the then local government minister, Stuart Andrew, in June 2022. This followed a public inquiry in 2021.

A condition of the permission (see p130) requires work to start within three years of the planning permission date. The site must be restored within three years of the start of work.

Last year, a community group and district council launched a legal challenge to the planning permission.

UKOG said the Loxley-1 well was designed to “confirm the commercial viability” of a previous gas discovery. The company said it planned to complete Loxley-1 as a future production well.

It said a second well would be drilled by summer 2029, under the agreement with the NSTA.

UKOG shares rose slightly on the announcement but fell later. At the time of writing, they were 0.062p.

“Focus on Loxley”

UKOG also said the NSTA had agreed to revise the retention area work programme for PEDL234, the licence area that includes the proposed Loxley site.

This would allow the company to “focus licence activities entirely on the acceleration of the planned appraisal campaign” on Loxley, UKOG said.

The company already has a well site in PEDL234. The dormant operation at Broadford Bridge in West Sussex has seen no work since March 2018 and has produced no usable oil or gas.

In May 2022, West Sussex County Council voted to extend the planning permission, for Broadford Bridge for the fourth time. This meant the site would not need to be restored until March 2024.

At the time, UKOG told councillors it needed more time to review data from the Loxley well and the oil site at Horse Hill.

In 2017, UKOG announced cement bond problems with the Broadford Bridge well and revealed that a section of the reservoir was unproductive because of low permeability.

In July 2019, PEDL234 moved from the appraisal stage to production, even though no successful wells had been drilled in the licence area. UKOG was not required to submit a field development plan for the licence until December 2023.

In 2020, the then Oil & Gas Authority allowed more time for a Kimmeridge well in PEDL234, from 2020 to the end of 2022. The deadline for a third appraisal well in the licence was extended from 2021 to the end of 2023.

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