Increase in Horse Hill interest to 20%
For Immediate Release
13 August 2014
UK Oil & Gas Investments PLC
("UKOG" or the "Company")
UKOG increases its interest in Horse Hill to 20%
UKOG (AIM: UKOG) announces that it has today signed a binding heads of agreement ("HOA") to subscribe £750,000 in cash for a further 12.5% equity interest in Horse Hill Development Ltd ("HHDL"), a special purpose company that has the rights to a 65% participating interest and operatorship in the UK onshore Horse Hill Field in the Weald Basin near Gatwick Airport, taking UKOG's interest from 7.5% to 20% (the "New HHDL Subscription").
UKOG now has binding agreements in place to own a direct 20% interest in HHDL and an additional interest by virtue of its 6% ownership in Angus Energy Limited ("Angus Energy"). Angus Energy owns 40% of HHDL.
David Lenigas, the Company's Chairman, commented:
"This further investment in Horse Hill now makes UKOG the second largest shareholder in the Horse Hill Development consortium, behind Angus Energy. We are pleased to have secured this increased exposure to this exciting conventional oil and gas play in the Weald Basin just prior to spudding of the Horse Hill - 1 well."
About Horse Hill
The Horse Hill Petroleum Exploration and Development Licence No. 137 (PEDL 137) ("Horse Hill") is located in Surrey.
Magellan Petroleum (UK) Limited, a subsidiary of NASDAQ-listed Magellan Petroleum Corporation ("Magellan"), currently owns 100% of the 99.29 km2 (24,525 acre) PEDL 137 and has agreements with HHDL to earn a direct 65% participating interest and operatorship in the licence, under certain contractual conditions, by the drilling of the proposed 2,646 m (8,680 ft) Horse Hill-1 well (the "Well") by the end of August 2014.
HHDL is a special purpose company which was formed on 10 December 2013. UKOG announced its first 7.5% investment in HHDL on 20 December 2013 (the "December HHDL Subscription").
The Horse Hill Prospect OOIP and OGIP and prospective resources, as announced by UKOG on 20 December 2013, are summarised in Table 1.
Table 1: Horse Hill Prospect estimated OOIP, OGIP and Prospective Resources.
|
Target Reservoir Oil |
OOIP Upside Potential (MMSTB) |
OOIP Mean (MMSTB) |
Prospective Resources Mean (MMSTB ) |
|
Upper Portland Sandstone |
116 |
57 |
17 |
|
Lower Portland Sandstone |
284 |
147 |
44 |
|
Corallian Sandstone |
67 |
33 |
10 |
|
Greater Oolite Limestone |
204 |
104 |
16 |
|
Total Oil |
671 |
341 |
87 |
|
|
|
|
|
|
Target Reservoir Gas |
OGIP Upside Potential (Bcf) |
OGIP Mean (Bcf) |
Prospective Resources Mean (Bcf) |
|
Triassic Sandstone |
456 |
234 |
164 |
Proposed subscription terms
Pursuant to the HOA signed today, UKOG has agreed to make the following cash payments to increase its interest in HHDL from 7.5% to 20%:
1. £10,000 within 7 days of signature of the HOA;
2. £50,000 on satisfaction of the conditions precedent of the HOA, being the signing of a definitive agreement within 30 days of signature of the HOA; and
3. £690,000 of cash calls which shall reflect the cash calls made under the agreement between HHDL and Magellan for the drilling of the Well.
The New HHDL Subscription, which is being made at the same valuation of HHDL as the December HHDL Subscription, is being funded from UKOG's existing cash balances.
For further information, please contact:
|
UK Oil& Gas Investments PLC David Lenigas / Donald Strang |
Tel: 020 7440 0640 |
|
Beaumont Cornish (Nominated Adviser) Roland Cornish / Michael Cornish |
Tel: 020 7628 3396 |
|
Hume Capital Securities PLC (Corporate Broker) David Lawman |
Tel: 020 7101 7070 |
|
Square 1 Consulting (Public Relations) David Bick/Mark Longson |
Tel: 020 7929 5599 |
Glossary:
MMSTB million stock barrels
Bcf billion cubic feet
OOIP Original Oil in Place
OGIP Original Gas in Place
Prospective Resource Prospective resources are estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled. This class represents a higher risk than contingent resources since the risk of discovery is also added. For prospective resources to become classified as contingent resources, hydrocarbons must be discovered, the accumulations must be further evaluated and an estimate of quantities that would be recoverable under appropriate development projects prepared.
-ENDS-
This information is provided by RNS
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