The deadline to start drilling a gas exploration well in Surrey has been extended again.

UK Oil & Gas (UKOG) said today the industry regulator had agreed to a one-year extension for the Loxely-1 well, near Dunsfold.

This is the third time the North Sea Transition Authority (NSTA) has extended the deadline.

Drilling the borehole must now start no later than 30 June 2025, UKOG said in a statement.

The original deadline was set for the end of December 2019. This was extended in November 2020 to the end of 2021. In February 2023, the NSTA extended the date again to June 30 2024.

Drilling the well has been a condition that UKOG must fulfil to retain the full 300km2 of the licence, PEDL234, which spans parts of Surrey and West Sussex. It includes the Broadford Bridge site, which West Sussex County Council refused a fifth extension of planning permission last week.

The new deadline for the Loxley well almost coincides with the date, set in the planning permission, when UKOG must begin work on the site.

The Loxley site was granted planning permission in June 2022, by the then housing minister, Stuart Andrew. This followed two refusals by Surrey County Council in June 2020 and November 2020.

A legal challenge to the minister’s decision, by Protect Dunsfold and Waverley Borough Council, failed at the High Court in July 2023. The Court of Appeal refused a further challenge in a ruling on 9 January 2024.

No physical work has yet been carried out to construct the Loxley site or the site entrance.

UKOG revealed last month (1 February 2024) that it needed to issue further shares to fund the appraisal programme at Loxley and meet planning conditions before work could start.

DrillOrDrop has reported that these conditions include changes to the highway and a speed limit on local roads.

The planning authority, Surrey County Council, has confirmed that all the costs of the highway work and speed restrictions must be paid for by UKOG’s subsidiary, UKOG234.

The work will be covered by a section 278 agreement, a legal agreement to carry out highway alternations to the road network.

Just over three weeks ago, DrillOrDrop understood that negotiations on the section 278 agreement were at an early stage and the finalisation date was not known.

We also understood that the traffic regulation order for the speed limit reduction required a consultation, which has not yet been advertised.

In 2022, UKOG said it would farmout work on the Loxley site. This would mean that UKOG’s costs would be fully, or partly, carried by the farminee, the company said.

UKOG said at the time:

“The Company believes that this is the most prudent course of action to both manage uncertainty and to help ensure the best use of the Company’s working capital.”

Since then there has been no notification of a farmout agreement on Loxley.

DrillOrDrop has closed the comments section on this and future articles. We are doing this because of the risk of liability for copyright infringement in comments. We still want to hear about your reaction to DrillOrDrop articles. You can contact us by clicking here.