Gatwick drillers cheer new oil forecasts

Two months after its last estimate, and a fortnight after a big forecast from oilfield services heavyweight Schlumberger, Nutech has upgraded predictions for the Horse Hill-1 well near Gatwick Airport. This time it reckons there's over 9.2 billion barrels of so-called P50 oil in place (OIP) at the Weald basin site.

In April, Nutech said it thought that Horse Hill-1 held about 158 million barrels of oil (mmbo) per square mile. The Horse Hill licences - PEDL137 and PEDL246 - cover 55 square miles of the Weald basin.

Now, the US-based firm calculates that the total Jurassic shale plus tight conventional reservoir section of the licences - in which UK Oil & Gas has a net attributable interest of 20.358% in Horse Hill - contain a Best Estimate, or P50, OIP of 9,245mmbo. P50 means there a 50% chance of the estimate being equalled or exceeded. There's 5,230mmbo in the Kimmeridge zones alone.

"Nutech's latest report is a significant step towards understanding the resource potential of our Weald licences, being the first independent semi-regional quantification of OIP over the area that incorporates the findings from the Company's HH-1 well," says Stephen Sanderson, chief executive at UKOG, which last week raised £6 million from a share placing at 2.25p.

"The results, utilising over 114 wells in the basin, confirm the likely presence of significant and potentially extensive hydrocarbon volumes within the licence areas and thus provides a further valuable step towards "proof of concept" for the identified Jurassic resource plays."

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As flagged already, Nutech estimates a recovery factor of 3-15% of contacted OIP per well, although more work needs to be done here.

There's a wide range of possible outcomes, too. Nutech arrives at a P10 figure of 17,519mmbo. That's significant, although there's just a 10% chance of hitting that number. At the other end, there's a 90% chance (P90) of them actually finding 3,131mmbo.

The team of Gatwick drillers - UKOG, Solo Oil, Stellar Resources, Doriemus, Evocutis and Alba Minerals - are now waiting for Nutech's advice on the proposed HH-1 flow test objectives and the integration of the report's wider basin implications "to help evaluate the potential of our interests in our other UK licences".

Earlier this month, shares in the six explorers were suspended, then reinstated after Schlumberger estimated OIP for the Jurassic section of Horse Hill at 271.4mmbo. Excluding the Upper Portland Sandstone oil discovery and it's 255.2mmbo.

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