UKOG to acquire 100% ownership of Weald Basin licence PEDL234

UK Oil & Gas Investments (UKOG) has signed agreements with Celtique Energie and Magellan Petroleum to acquire complete ownership of the 300km² Weald Basin licence PEDL234.

PEDL234 is situated to the south west of UKOG’s main Kimmeridge oil interests in Horse Hill (PEDL137, PEDL246) and Holmwood (PEDL143).

The licence includes regulatory permission to drill the Kimmeridge at the Broadford Bridge-1 (BB-1) site, and also contains a further mapped gas appraisal opportunity in the eastern extension of the Godley Bridge Portland gas discovery.

With the £3.5m acquisitions, the company will obtain 100% ownership of the licence through an agreement with Celtique Energie Petroleum (CEPL) to acquire Celtique Energie Weald (CEWL), which owns a direct 50% interest in the licence.

The acquisition will also be made through an agreement with Magellan Petroleum (UK), which also has a 50% interest in the licence.

UKOG will also be assigned Magellan’s 22.5% interest in offshore Isle of Wight licence P1916 through a second agreement.

Upon completion of the transaction, the licence ownership and operatorship will be held by Kimmeridge Oil and Gas, a 100% intermediary company of UKOG.

The licence offers the opportunity to both CEWL and UKOG to test the Kimmeridge and appraise the gas discovery with a single new well.

The BB-1 well pad has already been constructed and the company plans to secure the necessary remaining consents from the Health and Safety Executive and OGA to carry out drilling and testing operations.

UKOG executive chairman Stephen Sanderson said: "The transaction more than doubles our net acreage position and potential recoverable resource base in the most prospective part of the play, all at a very reasonable entry price.

"The transaction makes UKOG the leading player and acreage holder in Kimmeridge oil and a significant player in the UK onshore oil industry."

The transactions are subject to extension of the licence as well as the regulatory approvals from the Secretary of State for Energy and Climate Change.