Horse Hill-1 Oil Discovery, Update on Flow Test

RNS Number : 1438P

Stellar Resources PLC

16 February 2016

 

Stellar Resources PLC

("Stellar Resources" or the "Company")

Update on Flow Test

Horse Hill-1 Oil Discovery, Weald Basin, UK

Significant Oil Flows to Surface from Lower Kimmeridge Limestone

Stellar Resources (London AIM and ISDX: STG) announces that Horse Hill Developments Limited has informed the Company that light, 40-degree API, sweet oil has flowed naturally to surface from an 80-foot zone within the Lower Kimmeridge limestone interval at a depth of approximately 900 metres below ground level.

Flow commenced at around 10.00am GMT yesterday at an initial instantaneous rate in excess of 700 barrels per day using a 1-inch choke, in an approximate mix of 50:50 oil to water. The well was then choked back to 32/64 inches resulting in a steady early oil rate in excess of 463 barrels of oil per day over a further 7.3-hour period, in an approximate mix of over 99% oil and less than 1% water.

The Lower Kimmeridge flow period is planned to continue today at 0700 following an overnight shut-in from 1900 Monday. Upon completion, Phase 2 and Phase 3 operations will move to the shallower Upper Kimmeridge limestone and Portland sandstone zones at approximately 840 and 615 metres below ground level, respectively.

The HH-1 discovery well, the original exploration drilling phase originally completed at the end of 2014, is located within onshore exploration Licence PEDL137, on the northern side of the Weald Basin near Gatwick Airport. Stellar owns a 6.5% interest in PEDL137.

Jeremy Taylor-Firth, Stellar's Non-Executive Chairman commented:

"I would very much like to thank our executive team and the Horse Hill team for their hard work. Whilst still early days, these results are very encouraging and we look forward to further data as it becomes available"

Stellar's interest in Horse Hill

The HH-1 well is located within onshore exploration Licence PEDL137, on the northern side of the Weald Basin near Gatwick Airport. Stellar Resources owns a 10% direct interest in HHDL. HHDL is a special purpose company that owns a 65% participating interest and operatorship of Licence PEDL137 and the adjacent Licence PEDL246 in the UK Weald Basin.

Qualified Person's Statement:

Stephen Sanderson, who has over 35 years of relevant experience in the oil industry, has approved the information contained in this announcement.  Mr Sanderson is a Fellow of the Geological Society of London and is an active member of the American Association of Petroleum Geologists.

For further information, please contact:

Stellar Resources plc:                                                         [phone]

Alastair Clayton

Nominated Adviser:

Cairn Financial Advisers LLP                                                 [phone]

James Caithie / Sandy Jamieson

Broker:

Optiva Securities Limited                                                        [phone]

Christian Dennis / Jeremy King

Public Relations:

Square1 Consulting                                                                [phone]

David Bick / Mark Longson

Glossary

choke

Device incorporating a fixed or variable orifice that is used to control fluid flow rate during testing of an exploratory discovery

degree API

A measure of the density of crude oil as defined by the American Petroleum Institute

discovery

a discovery is a petroleum accumulation for which one or several exploratory wells have established through testing, sampling and/or logging the existence of a significant quantity of potentially moveable hydrocarbons

extended flow test

a flow test, as per the permission granted by the Oil and Gas Authority, with an aggregate flow period duration over all zones of greater than 96 hours and up to 90 days maximum.

flow test

a flow test or well test involves testing a well by flowing hydrocarbons to surface, typically through a test separator. Key measured parameters are oil and gas flow rates, downhole pressure and surface pressure. The overall objective is to identify the well's capacity to produce hydrocarbons at a commercial flow rate

limestone

a sedimentary rock predominantly composed of calcite (a crystalline mineral form of calcium carbonate) of organic, chemical or detrital origin. Minor amounts of dolomite, chert and clay are common in limestones. Chalk is a form of fine-grained limestone

sandstone

a clastic sedimentary rock whose grains are predominantly sand-sized. The term is commonly used to imply consolidated sand or a rock made of predominantly quartz sand.

sweet oil or crude

A type of oil that contains less than 0.42% Sulphur

 

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