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UK Oil & Gas PLC announced that the North Sea Transition Authority granted a one-year extension to the PEDL234 licence's Retention Area Work Programme. To retain the full 300 km² licence area, the Company must commence drilling the Loxley-1 appraisal borehole no later than 30 June 2025.
| Date | 27 Mar 2024 |
| Time | 07:00:05 |
| Category | Corporate updates |
| ID | 4003I |
UK Oil & Gas PLC
("UKOG" or the "Company")
Loxley Gas Project Update
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that following the Court of Appeal's 9th January 2024 ruling refusing any further appeals against Loxley's lawful planning consent (RNS of 10 January 2024), the North Sea Transition Authority has now granted a one-year extension to the PEDL234 licence's Retention Area Work Programme in which the Loxley gas discovery is contained.
In order to retain the full 300 km² licence area without any future partial relinquishment, the Company must now commence drilling the Loxley-1 appraisal borehole no later than 30 June 2025. Loxley-1 is designed to confirm the commercial viability of the Company's material 100%-owned Loxley gas discovery and its related hydrogen feedstock project.
Loxley's current Competent Persons Report ("CPR") (see: RNS 21 February 2023) assessed that Loxley, one of the UK onshore's largest historic gas discoveries, contains a mid-case 2C Contingent Resources recoverable volume of 31.0 billion cubic feet net to UKOG. The CPR's associated post-tax 2C case present value (at 10% discount rate) was assessed at £124 million net to UKOG using end December 2022 gas prices and £87 million net to UKOG using an RPS Energy forward price forecast. The CPR is available on the Company's website www.ukogplc.com .
The Loxley CPR's recoverable volumes stated as Contingent Resources (as defined in the glossary below) should not be construed as Reserves (also defined below). Further successful development of the asset would be required to seek to move the CPR classification to Reserves.
For further information, please contact:
UK Oil & Gas plc
Stephen Sanderson / Guzyal Mukhametzhanova Tel: 01483 941493
WH Ireland Ltd (Nominated Adviser and Broker)
James Joyce / James Bavister / Andrew de Andrade Tel: 020 7220 1666
Communications
Brian Alexander Tel: 01483 941493
Glossary of terms
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2C |
the mid-case or average estimate of Contingent Resources. There is estimated to be a 50% probability that the quantities actually recovered could equal or exceed this estimate. |
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CPR |
Competent Person's Report, a Petroleum Resources report prepared by an independent Competent Person(s), providing an estimated range of remaining recoverable resources and their potential monetary valuation in accordance with the relevant reporting standard (in this case the 2018 Society of Petroleum Engineers' PRMS). The RPS CPR was not prepared under the AIM rules for oil & gas companies. |
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Contingent Resources |
those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent Resources are further categorised in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterised by their economic status. |
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discovery |
a petroleum accumulation (gas in Loxley's case) 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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PRMS |
Petroleum Resources Management System created by the Society of Petroleum Engineers. A global standard of petroleum reserve and resource classification together with guidelines and accepted methodologies for the definition and estimation of petroleum resources and their monetary valuation. |
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Reserves |
those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Reserves must satisfy four criteria: discovered, recoverable, commercial and remaining (as of the evaluation's effective date) based on the development project(s) applied. Reserves are further categorised in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterised by development and production status. |
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon publication of this announcement, this information is now considered to be in the public domain.