Oil find at Gatwick Airport

A group of intrepid explorers has struck oil next door to Britain's second-largest airport. In a field where once animals grazed and hay was made, the consortium of drillers has hit the black stuff, about 3.1 million barrels (mmbbls) of it so far. It could be considerably more, but, oddly, the share prices of those involved have plunged. Why?

"It's difficult to fathom," a source told Interactive Investor. It seems the companies weren't quite ready to go public, but a huge spike in share prices during the last hour of trade on Thursday forced their hand. This is also clearly still work in progress and not yet at the "proven" stage.

The Horse Hill-1 well, on the northern side of the Weald basin, is less than two miles up the road from Gatwick Airport. And experts estimate a further gross unrisked in place prospective hydrocarbon volume of 16.8 mmbbls of oil in an untested fault block to the south.

Friday’s news firms up an initial find announced on 16 October. Further analysis is continuing to establish the recoverable volume of oil that has been discovered. But the consortium is now drilling even deeper, targeting a suspected gas accumulation in the Triassic. If it is there, they're expected to strike some time in the next two weeks.

Horse Hill is being drilled by a special purpose company called Horse Hill Development Limited. It holds the rights to a 65% participating interest and operatorship in Licence No. 137 (PEDL 137) at the Horse Hill oil field. US firm Magellan Petroleum Corporation owns the rest.

Stellar Resources, Solo Oil, UK Oil & Gas Investments - all either current or former David Lenigas companies - and Regency Mines, Alba Mineral Resources and Doriemus, all have an interest in Horse Hill.

According to previous estimates from Magellan, there is upside potential of an estimated 671 million stock barrels (mmstb) oil in place with an estimated total mean recoverable prospective resources of 87 mmstb. And in the Triassic gas play, the company mentions additional prospectivity of 456 billion cubic feet (Bcf) gas in place (mean 164+ Bcf recoverable prospective resource).

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.