The prospect of large scale onshore oil drilling in southern England moved a step closer yesterday with confirmation of a major new oil discovery near Gatwick airport in Sussex.
Stock-market listed UK Oil and Gas Investments said that the Horse Hill licence, covering more than 50 sq. miles in the Weald Basin, contains a total of 158 million barrels of oil in place.
At current crude oil prices of around $58-barrel, this means that the new field is potentially worth a maximum of £300 billion. But the company estimated that no more than 15% of this oil – worth some £45 billion – will be recoverable.
The North Sea has produced about 45 billion barrels in the past 40 years.
Stephen Sanderson, Chief Executive, UK Oil and Gas Investments, said: “Drilling the deepest well in the basin in 30 years, together with the ability to use concepts, techniques and technology unavailable in the 1980s, has provided new cutting-edge data and interpretations to comprehensively change the understanding of the area’s potential oil resources.”
“As a result, we believe that, in addition to the Portland Sandstone oil discovery, the Horse Hill well has discovered a possible world class potential resource in what is interpreted to be a new Upper Jurassic “hybrid play”.
“With the help of our geological advisor’s considerable global knowledge base and play library, we have identified that the Horse Hill Upper Jurassic rock sequence is analogous to known oil productive hybrid reservoir sections of the Bakken of the US Williston Basin, the Wolfcamp, Bone Springs, Clearfork, Spraberry, and Dean Formations in the US Permian Basin and the Bazhenov Formation of West Siberia.”
“The US analogues have estimated recovery factors of between 3% and 15% of oil in place. Based on what we’ve found here, we’re looking at between 50 and 100 billion barrels of oil in place in the ground.
“We believe we can recover between 5% and 15% of the oil in the ground, which by 2030 could mean that we produce 10%-to-30% of the UK’s oil demand from the Weald.
“Our geochemical analyses strongly indicates that the Horse Hill licences lie within the likely sweet spot of the identified “Weald hybrid play”.”
“Appraisal drilling and well testing will be required to prove its commerciality, but this “Weald hybrid play” has the potential for significant daily oil production.
“We believe that these reservoirs can be successfully produced using conventional horizontal drilling and completion techniques.”
Ken Cronin, Chief Executive of UKOOG (the UK Onshore Oil and Gas trade association) said: “We have been drilling for oil and gas onshore in the UK for over 100 years. There are a number of sites in the south of England that have been producing oil for many years with great care for the environment and with no impact on local communities.
“These initial results suggest a very large volume of oil in place, which could potentially help to stem the rise in oil imports and improve Britain’s energy security and balance of payments.”
The Horse Hill-1 well is located within onshore exploration Licence PEDL 137, on the northern side of the Weald Basin near Gatwick Airport. UKOG owns a 30% direct interest in Horse Hill Developments Ltd (“HHDL”) and a 1.32% interest in HHDL via its 6% interest in Angus Energy Limited. HHDL is a special purpose company that owns a 65% participating interest and operatorship of Licence PEDL 137 and the adjacent Licence PEDL 246 in the UK Weald Basin.
Other investors in the Horse Hill project include Stellar Resources, Solo Oil and Alba Mineral Resources.