Oil & Gas Authority agrees to extend Horse Hill licences in Weald Basin

Oil and Gas Authority (OGA) has consented to extend the current PEDL137 and PEDL246 Retention Areas (RA) until 2021 in Weald Basin of South East UK.

Following the extension, the PEDL137 and PEDL246 RAs will now expire on 30 September and 30 June 2021, respectively.

UK Oil and Gas holds 31.2% net interest in the licences through its 48% ownership of the licences' operator Horse Hill Developments.

The RA work programmes are now agreed with OGA and consist of the planned Horse Hill-1 (HH-1) Kimmeridge and Portland production tests, HH-1z Kimmeridge Limestone (KL) and HH-2 Portland appraisal wells, 50km² of 3D seismic, 25km of 2D seismic and a PEDL246 exploration step-out well.

The RAs for each licence can be additionally extended or modified subject to an ongoing minimum work programme agreed by the OGA.

UKOG executive chairman Stephen Sanderson said: “The revised RA expiry dates ensure that the knowledge gained from the Company's forthcoming extensive 2017 Broadford Bridge, Horse Hill and Holmwood drilling and test campaign, can be fully incorporated into future Kimmeridge Limestone step-out wells in PEDL246 and PEDL137. 2017 is set to become a pivotal year for the company.”

The HH-1 Kimmeridge Limestone and Portland oil discovery well are situated within the onshore exploration Licence PEDL137, on the northern side of the Weald Basin.

As previously reported in February and March last year, two naturally fractured limestone members within the Kimmeridge section, known as KL3 and KL4, flowed dry, 40° API oil at a total stabilised natural flow rate of 1,365 barrels per day (bopd) with no clear indication of depletion.

The overlying Portland flowed dry, 35° API gravity oil at a stable pumped rate of 323bopd.

The Portland oil was produced at the rod-pump's maximum achievable rate and therefore, flow was constrained by the pump's mechanical capacity.

In October 2016, an application for long-term production testing and further appraisal drilling was submitted to Surrey County Council, and is now scheduled to be decided at the council's planning committee meeting in July. The company therefore envisages that these operations will commence in the second half of this year upon receipt of the necessary remaining regulatory permissions.

The Broadford Bridge-1 (BB-1) is expected to commence in the second quarter of 2017. It will be a deviated or slant well, drilled to a true-vertical depth of around 1,300m.

This well is intended to penetrate four naturally fractured Kimmeridge Limestone reservoirs (KL1-KL4) on the southern flank of the Weald Basin, within a mirror-image of the Horse Hill fault block.

The Kimmeridge section is expected to be drilled at an angle of approximately 50° to vertical and approximately orthogonal to the predicted direction of open natural fractures within the Kimmeridge Limestones.

The Holmwood-1 well, slated to be drilled in the second half of this year, is located in PEDL143, around 8km to the west of HH-1. This well is intended to test a further geological lookalike of Horse Hill with reservoir objectives in the Portland, Kimmeridge Limestones and Corallian.

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Image: Horse Hill site. Photo: courtesy of UK Oil & Gas Investments.