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Alba Mineral Resources says latest Horse Hill results are “highly encouraging”

First rates from the latest test programme from the Kimmeridge play has beaten those seen in the 2016 programme

oil and gas operations
The KL3 zone flowed between 563 and 771 bopd

Alba Mineral Resources Plc (LON:ALBA) chief executive George Frangeskides has described new production test results from the Horse Hill project as “highly encouraging”.

The first Kimmeridge test saw oil flow continuously and naturally from the KL3 zone to surface over the past 50 hours.

Moreover, the flow of oil was measured at rates between 563 and 771 barrels of oil per day over the past 24 hours. At the same time, gas rates measured at 186 thousand cubic feet per day via an enclosed flare.

Alba shares gained 4.5% in Wednesday afternoon’s deals.

READ: Balcombe and Horse Hill: What’s next for the UK’s new oil play?

The 2018 test rates to date compare very favourably to the 464 bopd rate recorded for the same Kimmeridge section two years ago.

Pressure data indicates that the KL3 zone and the overlying KL4 zone comprise one single connected oil pool, with an implied minimum vertical extent of 358 feet.

Four tankers carrying crude produced in the Kimmeridge test have been transported to the Fawley refinery.

No formation water has been recorded, and although it noted that water from well completion continues to be recovered as the well continues to proceed through the ‘clean up’ phase.

The Horse Hill production test programme continues. The first 24-hour pressure build up (PBU) test is now underway. It will be followed by further operations including additional clean-up, flow stabilization, oil sampling, and more PBUs.

After that, the programme will move on to test production from KL4 where, in 2016, a rate equivalent to 901 bopd was measured over a four hour period.

Alba has an 18.1% stake in HHDL, which in turn owns 65% of the Horse Hill discovery.

Frangeskides, in a statement, said: "Whilst these are early results from the KL3 EWT sequence, with the well still ‘cleaning-up’, the rates achieved so far in the Kimmeridge limestones are highly encouraging. 

“We look forward to the results of the remainder of the KL3 and KL4 test programme, and look forward also to learning of the operator's go forward plans for the field development of the Portland sandstone and Kimmeridge limestone reservoirs at Horse Hill."

UK Oil & Gas has a 46.735% indirect interest in the Horse Hill project, via a shareholding in HHDL with in turn owns 65% of the asset. Solo Oil PLC (LON:SOLO) retains an interest in the project, via its shareholding in UKOG, following its recent divestment deal.

Stephen Sanderson, UKOG chief executive, separately said: “I am delighted to have witnessed first-hand the resumption of significant continuous and sustained oil flow from the Kimmeridge at Horse Hill.

“Whilst it has been a long wait since the successful 2016 flow tests, it has been made more momentous by the Kimmeridge's significantly increased performance and productivity.”

He added: “The directors consider that these positive KL3 test results now make it increasingly likely that both the Kimmeridge and Portland oil pools are set to make Horse Hill one of the UK's leading onshore producing oil fields. Permanent production at Horse Hill is targeted in 2019.”

Quick facts: Alba Mineral Resources PLC

Price: 0.12 GBX

Market: AIM
Market Cap: £4.49 m

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