TIDMUKOG
RNS Number : 0075A
UK Oil & Gas Investments PLC
23 September 2015
23 September 2015
UK Oil & Gas Investments PLC
("UKOG" or the "Company")
Planning Approval - PEDL143 Farmin, Holmwood, Weald Basin,
UK
UK Oil & Gas Investments PLC (LSE AIM: UKOG) is pleased to
announce that Europa Oil and Gas (Holdings) plc ("Europa") has
today announced that Surrey County Council's Planning &
Regulatory Committee has granted permission for the underground
drilling corridor for the Holmwood-1 exploration well
("Holmwood-1") in the PEDL143 licence, which lies immediately to
the West of the Company's PEDL137 Horse Hill licence in the Weald
Basin, Surrey.
UKOG will now proceed to complete its farm-in with Egdon
Resources U.K. Limited ("Egdon") to the PEDL143 licence, announced
on 29 June 2015. On completion of this farm-in, the Company will
hold a 20% licence interest in PEDL143.
PEDL143 is operated by Europa. Europa anticipates that
Holmwood-1 drilling will take place in late 2016 or 2017.
Europa's RNS contained the following information:
"Europa Oil & Gas (Holdings) plc ... is pleased to confirm
that Surrey County Council's Planning & Regulatory Committee
has granted permission for the underground drilling corridor of an
exploratory borehole at the Holmwood prospect ('Holmwood') in the
PEDL143 licence in the Weald Basin. Europa holds a 40% interest in
PEDL 143, which contains the conventional Holmwood prospect,
alongside Egdon Resources (18.4%), Altwood Petroleum (1.6%),
Warwick Energy (20%) and UK Oil & Gas Investments (20% subject
to completion of farm-in).
The Holmwood prospect is to be drilled as a deviated exploration
well. Europa and its partners now have planning permission for both
the surface site and the underground drilling corridor. Next steps
will include fulfilment of planning conditions and commencement of
detailed drilling planning and environmental permitting. It is
anticipated that drilling will take place in late 2016 or in 2017.
Europa and its partner Warwick Energy intend to farm out some of
their combined 60% equity in licence PEDL 143. The farm out process
has already commenced and further updates will be provided as when
it is appropriate to do so.
An application for planning permission to drill the Holmwood
prospect on PEDL143 was submitted in 2008 and was dismissed by
Surrey County Council in 2011. A planning appeal in 2012 was
dismissed by the Planning Inspectorate. Europa successfully
challenged this decision in the High Court in 2013. In 2014 the
Court of Appeal upheld the 2013 High Court judgment in the
Company's favour and a second planning appeal was heard at an eight
day public inquiry in April and June 2015. The Planning
Inspectorate issued a decision to allow the remitted appeal on 7
August 2015 and Surrey County Council allowed planning permission
for the underground drilling corridor on 23 September 2015.
Europa provided the following information in its Geological
Proof of Evidence submitted at the Planning Inquiry in April 2015:
"In the event of a successful oil discovery at Holmwood and based
on the most likely resource in place then the field is projected
[by Europa] to have a Present Value of around GBP137 million at 60
$/bbl oil price in 2015 rising to 92 $/bbl by 2018 and inflated at
2% thereafter. After taking costs and discounting into account the
Net Present Value to the Government based on current taxation rates
will be around GBP86 million with around GBP51 million accruing to
the Licensee group. As such the Holmwood prospect is considered of
material value to both the Government and the Licensee."
CEO Hugh Mackay said "Following Surrey County Council's
favourable decision, we are meeting with our joint venture partners
and reviewing plans to take the Holmwood prospect forward to
drilling. With gross mean un-risked prospective resources of 5.6
million barrels of oil, as estimated in a CPR published in June
2012, Holmwood would be the UK's fifth largest onshore field were
the mean resources case to be proved by drilling success. Combined
with a one in three chance of success, we therefore regard Holmwood
as one of the best undrilled conventional prospects in onshore
UK."
Stephen Sanderson, UKOG's CEO commented:
"We are delighted that this planning consent has now, finally,
been granted after a protracted process. Although UKOG's
involvement has only been since June 2015, subject to the required
Oil & Gas Authority ("OGA") consent, the project can now move
swiftly forward to the important milestone of drilling and testing
the Holmwood prospect towards the end of 2016 or early 2017.
I would like to reiterate that the Holmwood well provides the
Company with a valuable opportunity to leverage our proprietary
knowledge and experience of the adjacent analogous Horse Hill
discovery and the Kimmeridge tight oil play to the benefit and
future success of the PEDL143 partnership."
UKOG's interest in Holmwood:
Subject to receipt of the necessary approval from the OGA, UKOG
will pay a 40% share of the Holmwood-1 exploration drilling costs
in order to acquire a full 20% working interest in PEDL143 from
Egdon.
UKOG's share of well costs will be capped at GBP1.2 million net
to UKOG (i.e. 40% of a gross Holmwood-1 well cost estimate of GBP3
million). Gross well costs above GBP3 million, should they arise,
will be met by UKOG, Egdon and other partners, pro-rata according
to their working interests in PEDL143.
Qualified Person's Statement:
Stephen Sanderson, UKOG's Chairman, who has over 30 years of
relevant experience in the oil industry, has approved the
information contained in this announcement. Mr Sanderson is a
Fellow of the Geological Society of London and is an active member
of the American Association of Petroleum Geologists.
For further information please contact:
UK Oil & Gas Investments PLC
Stephen Sanderson / Jason Berry Tel: 020 7440 0640
WH Ireland (Nominated Adviser and Broker)
James Joyce / Mark Leonard Tel: 020 7220 1666
Square 1 Consulting (Public Relations)
David Bick / Mark Longson Tel: 020 7929 5599
GLOSSARY
discovery a discovery is a petroleum accumulation
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
------------ -------------------------------------------------
Net Present the difference between discounted cash
Value inflows and discounted cash outflows,
commonly used to analyse the economics
of a project or asset investment
------------ -------------------------------------------------
prospect a project associated with a potential
accumulation that is sufficiently well
defined to represent a viable drilling
target
------------ -------------------------------------------------
prospective Prospective resources are estimated
resources volumes associated with undiscovered
accumulations. These represent quantities
of petroleum which are estimated, as
of a given date, to be potentially recoverable
from oil and gas deposits identified
on the basis of indirect evidence but
which have not yet been drilled. This
class represents a higher risk than
contingent resources since the risk
of discovery is also added. For prospective
resources to become classified as contingent
resources, hydrocarbons must be discovered,
the accumulations must be further evaluated
and an estimate of quantities that would
be recoverable under appropriate development
projects prepared.
------------ -------------------------------------------------
reservoir a subsurface rock formation containing
an individual natural accumulation of
moveable petroleum
------------ -------------------------------------------------
tight oil a play where oil is found or expected
play, or to be present within a reservoir with
resource low permeability, i.e. a tight reservoir.
play The term, in the case of HH-1, is applied
to a play where trapped petroleum accumulations
are expected to be pervasive throughout
a large area and that are not significantly
affected by hydrodynamic influences
(also called "continuous-type deposits").
------------ -------------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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