A UK exploration minnow has published a report which shows its reserves in the ‘Gatwick oil field’ could put the North Sea oil basin in the shade for economic value and new job creation.
UK Oil and Gas Investments commissioned the report from EY to assess the economic impact and benefits of future Kimmeridge Limestone oil production projects over the Weald Basin across the southern home counties near the eponymous airport.
The report highlights the significant positive contribution to the UK economy, jobs and energy security that could result from this new potential oil production. It builds on the recent highly successful oil flow tests from the Kimmeridge Limestones at the Horse Hill-1 (“HH-1”) oil discovery, in which UK Oil and Gas has a 27.3% interest. Its key findings are; –
Future peak oil production could provide approximately 4% to 27% of 2014 UK daily oil demand over the life of the project.
If this comes to pass, the Kimmeridge basin will replace Brent crude as the UK/ North Sea benchmark.
The Gross Value Added to the UK economy could range from £7.1 billion to £52.6 billion
Generation of between approximately 1,000 to 5,600 jobs in the UK, averaged over the project’s lifetime
Lifetime tax revenues could be between £2.1 billion to £18.1 billion
The EY Report states: “The development of Kimmeridge Limestone Oil in the Weald Basin, assuming it can be extracted from a development site at the volumes projected by UKOG, has the potential to generate significant economic value to the UK economy, partially off-set the decline in oil production from UK fields, support employment, and generate significant tax benefits to the exchequer.”
Over the past decade, North Sea production has declined to the point where the UK is forecast to import over 50% of its daily oil demand by 2020. In this context, and following the Horse Hill flow tests, EY have now produced a detailed analysis of how the extraction of oil from the Kimmeridge Limestones in the Weald could help arrest the decline of indigenous British oil production and strengthen the UK’s long-term energy security.
Stephen Sanderson, UKOG Executive Chairman, commented: “This Report confirms our view that the development of Kimmeridge Limestone oil in the Weald Basin can make a very significant contribution to the economy, employment and energy security of the UK.
“The Report’s conclusions are given credence by the recent results of the highly successful Kimmeridge Limestone flow tests at the Horse Hill-1 oil discovery. The tests demonstrate that significant volumes of high-quality light oil exists within the Kimmeridge Limestones and can flow naturally to surface at commercial rates.
“The unexpectedly high aggregate flow rate of over 1365 barrels per day (“bopd”) from Horse Hill’s two Kimmeridge Limestones far exceeds the study’s modelled peak flow rate of 400 bopd per horizontal well. It is, therefore, possible that the overall economic impact of Kimmeridge Limestone oil could be significantly higher than this initial Report describes.”
The company’s share price rose nearly 7% to £2.05 on the report.
**We told you first: Scottish Energy News, 24 March 2016
EXCLUSIVE: Britain’s biggest onshore oil field near Gatwick airport set set to gush like a N. Sea well
UKOG has interests in the following UK oil exploration licences:
|Asset||Licence||UKOG’s Interest||Licence Holder||Operator||Area (km2)||Status|
|Avington 1||PEDL070||5%||UKOG (GB) Limited||IGas Energy Plc||18.3||Field in stable production.|
|Baxters Copse 2||PEDL233||50%||UKOG Weald Limited||IGas Energy Plc||89.6||Reviewing economics of appraisal/ development well.|
|Brockham 1||PL234||3.6%||Angus Energy 5||Angus Energy 5||8.9||Drilling of sidetrack well being considered.|
|Holmwood 3||PEDL143||30%||UKOG||Europa Oil & Gas (Holdings) plc||91.8||H-1 exploration commitment well planned.|
|Horndean 1||PL211||10%||UKOG (GB) Limited||IGas Energy Plc||27.3||Field in stable production.|
|Horse Hill 4||PEDL137||27.3%||Horse Hill Developments Ltd 6||Horse Hill Developments Ltd 6||99.3||Extended flow testing of HH-1.|
|Horse Hill 4||PEDL246||27.3%||Horse Hill Developments Ltd 6||Horse Hill Developments Ltd 6||43.6||Extended flow testing of HH-1.|
|Isle of Wight (Offshore) 3||P1916||77.5%||UKOG Solent Limited||UKOG Solent Limited||46.7||Preparing drilling planning submission.|
|Isle of Wight (Onshore) 2, 3||PEDL331||65%||UKOG||TBA||200.0||Preparing drilling planning submission.|
|Lidsey 1||PL241||4.2%||Angus Energy 5||Angus Energy 5||5.3||Drilling of infill well being considered.|
|Markwells Wood 2||PEDL126||100%||UKOG (GB) Limited||UKOG (GB) Limited||11.2||Compiling Field Development Plan.|