UK Oil & Gas to increase stake in Horse Hill Developments

UK Oil & Gas (UKOG) has signed an agreement to increase its stake to to 71.9% in Horse Hill Developments (HHDL), which owns the project in the Weald Basin, Surrey, UK.

Under the agreement, the company will acquire Solo Oil’s 15% interest in HHDL, which holds 65% in the Horse Hill-1 (HH-1) Portland and Kimmeridge Limestone oil discovery.

In addition, HHDL owns interests in the 55 square mile PEDL137 and PEDL246 licences.

Following the transaction’s close, UKOG will own a 71.9% HHDL shareholding, which translates to 46.735% beneficial interests in the licences.

The total consideration for the acquisition is pegged at £4.5m and will be paid through the issuance of 234,042,221 new ordinary shares in UKOG.

Currently, a comprehensive 150-day extended well test programme is underway to confirm the commerciality of HH-1.

Once the test is completed, project partners will begin testing of the two Kimmeridge Limestone oil pools.

UKOG chief executive Stephen Sanderson said: “This further strategic acquisition firmly cements UKOG as the dominant player in the Horse Hill Portland and Kimmeridge oil discoveries and licences.

“UKOG’s three recent HHDL acquisitions provide a valuable controlling interest and exemplify the rationale behind our recent change of AIM status to an operating company.

“With the positive Portland test results to date, UKOG, supported by its remaining three coventurers, can now steer the way towards permanent HH oil production in 2019.”

The latest transaction comes after UKOG reached agreements to buy an aggregate 7% stake in HHDL earlier this month from Gunsynd and Primorus Investments.