Farm-in to PEDL143
29 June 2015
UK Oil & Gas Investments PLC
("UKOG" or the "Company")
Farm-in to PEDL143, Holmwood Prospect, Weald Basin, UK
UK Oil & Gas Investments PLC (London AIM: UKOG) is pleased to announce that it has executed a Farm-in agreement with Egdon Resources U.K. Limited ("Egdon") to acquire a 20% interest in UK onshore licence PEDL143, further increasing UKOG's interests in the Weald Basin. The operator of PEDL143 is Europa Oil & Gas Limited ("Europa").
The 91.8 square km (35.5 square miles) PEDL143 licence is located to the immediate west of Horse Hill licence, PEDL137, in which UKOG has an interest, and to the immediate south of the Brockham oil field, licence PL235, in which UKOG has an interest via its 6% ownership of Angus Energy Limited.
PEDL143 contains the Holmwood prospect, which the PEDL143 partnership plans to test with the Holmwood-1 commitment well. The well is intended to be drilled to a total depth of approximately 4600 ft (1400 metres) true vertical depth to penetrate the Upper and Lower Portland Sandstone reservoir targets, the full Kimmeridge Clay section and the underlying Middle Jurassic Corallian Sandstone reservoir objective. Regulatory consent to drill the well is currently awaiting the outcome of a recent planning inquiry held by the Planning Inspectorate.
A Competent Persons Report ("CPR") by ERC Equipoise Limited ("ERCE"), published in June 2012 on Europa's website (http://www.europaoil.com/documents/CPR_Europa_Final_070612.pdf) shows the Holmwood prospect is estimated to contain mean gross unrisked prospective resources of 5.6 million barrels for the combined Portland and Corallian objectives. The Chances of Success, estimated by ERCE at 32% for the Portland Sandstone and 25% for the Corallian Sandstone, are representative of moderate to low exploration risk.
Transaction details:
Subject to the grant of planning consent for the Holmwood-1 well and subject to receipt of the necessary approval from the Oil & Gas Authority, UKOG will pay a 40% share of the Holmwood-1 exploration drilling costs in order to acquire a full 20% working interest in PEDL143 from Egdon.
UKOG's share of well costs will be capped at £1.2 million net to UKOG (i.e. 40% of a gross Holmwood-1 well cost estimate of £3 million). Gross well costs above £3 million, should they arise, will be met by UKOG, Egdon and other partners pro-rata according to their working interests in PEDL143.
Stephen Sanderson, UKOG's CEO commented:
"The opportunity to increase our interests in the Weald Basin adjacent to Horse Hill and to participate in the drilling of Holmwood's potentially significant low to moderate risk prospective resources is both exciting and a logical growth step in the Company's core business area.
The Company's interest in the Horse Hill-1 Portland oil discovery, along with our interest in the producing Portland Sandstone reservoir of the Brockham oil field, likely represent the best subsurface analogues for the Holmwood prospect. Consequently, we can utilise our key proprietary knowledge and experience of these analogues to the benefit and future success of the project.
I therefore believe that this is a sensible and mutually beneficial transaction for UKOG, Egdon and the PEDL143 partnership."
Qualified Person's Statement:
Stephen Sanderson, UKOG's CEO, who has over 30 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:
UK Oil & Gas Investments PLC
David Lenigas / Stephen Sanderson Tel: 020 7440 0640
WH Ireland (Nominated Adviser and Broker)
James Joyce / Mark Leonard Tel: 020 7220 1666
Square 1 Consulting (Public Relations)
David Bick / Mark Longson Tel: 020 7929 5599
Cassiopeia Services (Investor Relations)
Stefania Barbaglio Tel: 079 4969 0338
GLOSSARY
|
Chance of Success (COS) |
also known as probability of success (POS), being the probability that an exploration well will encounter flowable hydrocarbons from a prospect with a described volumetric probability distribution. The COS or POS represents the combined probability of the presence of key elements of a petroleum accumulation such as; the presence of mature source rock, effective hydrocarbon migration and charge, the presence of an effective reservoir and seal couplet and the presence and definition of a hydrocarbon trapping mechanism or trap |
|
mean |
or expected value, is the probability-weighted average of all possible values and is a measure of the central tendency either of a probability distribution or of the random variable characterised by that distribution |
|
prospect |
a project associated with a potential accumulation that is sufficiently well defined to represent a viable drilling target |
|
prospective resources |
those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects; potential accumulations are evaluated according to their chance of discovery and, assuming a discovery, the estimated quantities that would be recoverable under defined development projects. It is recognised that the development programs will be of significantly less detail and depend more heavily on analogue developments in the earlier phases of exploration |
|
reservoir |
a subsurface rock formation containing an individual natural accumulation of moveable petroleum that is confined by impermeable rock/formations |
|
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. |
This information is provided by RNS
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