Turkey: Operational Update & New Pinarova-1 well
UK Oil & Gas PLC
("UKOG" or the "Company")
Turkey: Operational Update & New Pinarova-1 well
Further to the analysis of the Q3 2022 Phase 2 Seismic Programme UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that the Resan JV (UKOG 50% working interest) has identified and plans to drill in Q1 2023, a new potential shallow oil accumulation, Pinarova, of some 9 km² areal extent, located 6 km north of the Basur-1 oil discovery. The new Pinarova-1 well is designed to test a working hypothesis, supported by well and seismic data, that the active (41.7˚API) light oil seep found last summer in a seismic shot hole (see RNS of 30 June 2022) above the Pinarova structure, is directly fed by and connected to an underlying light oil accumulation within Eocene Hoya group limestones, 300-645m below surface.
The presence of movable oil within Pinarova is indicated by results of the 2018 Kezer-1 shallow geothermal well, located near the apex of the Pinarova geological feature. Kezer-1 reported strong oil shows throughout the Hoya and flowed heavily oil-cut fluids to surface on a short open-hole geothermal test. Kezer-1 was deemed unsuitable for geothermal purposes and abandoned. Both new and legacy seismic data also show a series of vertically stacked seismic amplitude anomalies within the core of Pinarova's Hoya structure, possibly directly indicating hydrocarbons and/or the development of good reservoir within the Hoya.
The Company and its joint partner Aladdin Middle East ("AME") consider Pinarova to offer similar potential success case outcomes to a Basur-4 appraisal well, but at a much lower drilling cost (c. $0.66 million gross versus c. $4.12 million gross) and with a shorter time to execution and delivery.
Pinarova-1 will, therefore, be designed to test if light oil is present in commercially viable saturations and quantities within the Hoya and, if successful, will be completed as a pumped oil production well. If successful, Pinarova-1 would likely be followed by a Pinarova-2 well and/or a Basur-4 appraisal well drilled from a new site west of Basur-1 (see below).
Basur oil discovery update
Analysis of the new Phase 2 seismic data also supports the directors' belief that the Basur structure extends more westwards than first mapped and can now be better appraised from a newly identified site, 1 km west of the Basur-1 oil discovery. The new site will enable the core of the Basur discovery to be reached and appraised with reduced horizontal deviation than from the Basur-3 site, and without the need to drill through the major NW-SE thrust fault zone immediately to the south. The new location thus removes the potential lost circulation, stuck pipe and significant cost overrun risks associated with drilling through the heavily fractured limestones within the thrust-fault zone. The new site will, however, require a new pad and longer access track to be constructed.
Stephen Sanderson, Chief Executive, commented:
"Pinarova's prospectivity, potential success case volumes and modest drilling costs make it an attractive short-fuse project worth pursuing. We are actively supporting our operator AME to get Pinarova-1 drilled as soon as practicable in 2023 and, if successful, either Pinarova-2 and/or a Basur-4 appraisal well drilled from a new site 1 km west of the Basur-1 discovery."
Qualified Person's Statement
Matt Cartwright, UKOG's Commercial Director, who has 39 years of relevant experience in the global oil industry, has approved the information contained in this announcement. Mr Cartwright is a Chartered Engineer and member of the Society of Petroleum Engineers.
Glossary
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°API |
a measure of the density of crude oil, as defined by the American Petroleum Institute |
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discovery |
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 |
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geothermal well |
a well designed to harness geothermal heat within the earth by transferring heat from hot formation water at depth to surface via a borehole. The heat transfer to surface can be via direct circulation of formation water to surface (circulating loop) or via means of a heat pump within the borehole (closed loop). |
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limestone |
a sedimentary rock predominantly composed of calcite (a crystalline mineral form of calcium carbonate) of organic, chemical or detrital origin. |
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lost circulation |
occurs when drilling mud is lost into one or more geological formation due to the presence of faults, fractures, or highly permeable layers. |
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oil seep |
a natural flow of crude oil at or close to the earth's surface whose origin is from a petroleum accumulation or oil source rock at depth. |
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seismic amplitude |
a measure of the seismic reflection strength at a given subsurface interface |
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seismic amplitude anomaly |
a seismic amplitude that is either higher or lower than the general amplitudes seen elsewhere at the same geological interface |
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shot hole |
a shallow borehole in which a small amount of explosive is detonated in order to generate a seismic signal |
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stuck pipe |
a situation where the drill string becomes stuck in the borehole requiring specialist equipment and techniques to recover it to surface or for a mechanical sidetrack to drill around the stuck pipe. |
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thrust fault |
a type of fault that forms in areas where the earth's crust is under compression such as in orogenic (mountain) belts and where the upper block moves up and over the lower block. |
For further information, please contact:
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UK Oil & Gas PLC |
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Stephen Sanderson / Allen D Howard
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Tel: 01483 941493 |
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WH Ireland Ltd (Nominated Adviser and Broker) |
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James Joyce / Andrew de Andrade
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Tel: 020 7220 1666
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Communications |
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Brian Alexander |
Tel: 01483 941493 |
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The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
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