HH-2z Water Shut Off Intervention Commences

UK Oil & Gas PLC

("UKOG" or the "Company")

 

Horse Hill-2z Water Shut Off Intervention Commences  

 

 

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that operations to shut off formation water ingress into its Horse Hill-2z ("HH-2z") horizontal production well have commenced. By means of a Halliburton coiled tubing unit, production logging tools will be run along the entire length of the 2,500 ft horizontal section to identify the source of water ingress, thought to be from a series of open natural fractures at the base or "toe" of the wellbore.

 

Once identified, the source of water ingress will be isolated, either via a rigid setting fluid plug, or by a conventional cementing and selective perforation programme. A resumption of HH-2z extended well test operations is planned to follow directly after a successful intervention. Portland oil pool test production from HH-1 will continue during the intervention.

 

UKOG holds a controlling 85.635% interest in the Horse Hill oil field and surrounding highly prospective PEDL137 and PEDL246 licences, which are operated by UKOG's subsidiary company, Horse Hill Developments Ltd.

 

Stephen Sanderson, UKOG's Chief Executive, commented:

 

"We look forward to a successful intervention programme and the near-term resumption of test oil production from the new HH-2z horizontal well."

 

Qualified Person's Statement

 

Matt Cartwright, UKOG's Commercial Director, who has over 36 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.

 

For further information, please contact:

 

UK Oil & Gas PLC

Stephen Sanderson / Kiran Morzaria                                                      Tel: 01483 941493

 

WH Ireland Ltd (Nominated Adviser and Broker)

James Joyce / James Sinclair-Ford                                                           Tel: 020 7220 1666

 

Cenkos Securities PLC (Joint Broker)

Joe Nally / Neil McDonald                                                                         Tel: 020 7397 8919

 

Novum Securities (Joint Broker)                                                                                                              

John Bellis                                                                                                     Tel: 020 7399 9400

 

Public Relations

Brian Alexander                                                                                           Tel: 01483 900582

 

Glossary

 

 

coiled tubing (CT)	a very long, narrow (typically 1 to 3.5 inch diameter) continuously welded metal tube, which is supplied spooled on a large reel. It is used for interventions to convey tools and/or fluids to specific downhole locations where deployment via wireline or other conventional means is impossible or impractical i.e. in existing deviated and horizontal wells. It can also be used for drilling purposes in existing wellbores via the installation of a drill bit and bottom hole assembly powered solely by drilling fluid circulation. Its use removes the need for a workover rig as most CT units are self-contained and trailer mounted.
horizontal well	a well that during drilling is steered so as to follow and remain within a particular geological stratum or reservoir unit having a trajectory that runs approximately parallel to the top and or base of the target horizon
oil field	an accumulation, pool or group of pools of oil in the subsurface that produces oil to surface
production logging tools (PLTs)	PLTs measure flowing fluid parameters on a zone-by-zone basis within a producing well.  They provide diagnostic information, pinpoint where fluids such as water, oil and gas are entering a well and gives an indication about the efficiency of the perforations. PLTs normally measure four parameters: flow (via a series of spinners which rotate in the flow), density, temperature and pressure. The flow and density readings are used in traditional quantitative production logging analysis, whilst temperature and pressure data are used in more of a qualitative way to compute in-situ flow properties and locate zones of entry of fluids into a well
well test	or flow test involves testing a well by flowing hydrocarbons to surface, typically through a test separator over a flowing period of up to 96 hours; 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 and volumes. An extended well test or EWT is a well test with duration of over 96 hours and up to 90 or 180 flowing days aimed at assessing longer term production viability and the connected oil in place seen by the well.

 

UKOG Licence Interests

 

The Company has interests in the following UK licences:

 

Asset	Licence	UKOG Interest	Licence Holder	Operator	Area (km2)	Status
Avington 1	PEDL070	5%	UKOG (GB) Limited	IGas Energy Plc	18.3	Field currently temporarily shut in
Broadford Bridge/Loxley/Godley Bridge 2, 3, 8	PEDL234	100%	UKOG (234) Ltd 4	UKOG (234) Ltd 4	300.0	BB-1/1z oil discovery, Loxley-1 gas appraisal well planning application submitted
A24 3	PEDL143	67.5%	UKOG	UKOG 7	91.8	Finalising new site selection to drill Portland and Kimmeridge prospects
Horndean 1	PL211	10%	UKOG (GB) Limited	IGas Energy Plc	27.3	Field in stable production
Horse Hill 5	PEDL137	85.635%	Horse Hill Developments Ltd ⁶	Horse Hill Developments Ltd ⁶	99.3	Production tests ongoing, HH-2/2z drilling completed
Horse Hill 5	PEDL246	85.635%	Horse Hill Developments Ltd ⁶	Horse Hill Developments Ltd ⁶	43.6	As above
Isle of Wight (Onshore) 2, 3	PEDL331	95%	UKOG	UKOG	200.0	Preparing planning submission for Arreton oil appraisal well and Godshill exploration well
Markwells Wood	PEDL126	100%	UKOG (GB) Limited	UKOG (GB) Limited	11.2	MW-1 P&A

               

Notes:

 

1.  Oil field currently in stable production.

2.  Oil discovery pending development and/or appraisal drilling.

3.  Exploration asset with drillable prospects and leads.

4.  Contains the Broadford Bridge-1/1z Kimmeridge oil discovery, the eastern extension of the Godley Bridge Portland gas discovery, plus further undrilled Kimmeridge exploration prospects.

5.  Portland and Kimmeridge Oil field with productive and commercially viable zones, EWT ongoing, production planning consent granted in September 2019, appraisal/development drilling campaign completed. Long term Production start expected Spring 2020.

6.  UKOG has a direct 77.9% interest in HHDL, which has a 65% interest in PEDL137 and PEDL246.

7.  OGA consent received for the transfer of operatorship from Europa to UKOG

8.  Gas discovery pending appraisal drilling and development with underlying Kimmeridge potential

 

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014