--ADDS BROKER COMMENT--
The Horse Hill discovery may contain more oil than previously thought, according to new analysis by reservoir specialist NUTECH.
NUTECH, hired by the Horse Hill partners in January, has identified an additional 407 feet of potential oil pay within the limestones and claystones of the Kimmeridge formation, as well as in the Oxford Clay and Middle Lias formations.
This is almost four times more oil pay than has already been measured in the Portland reservoir, which is relatively well understood by the partners.
NUTECH’s findings add encouragement to the emerging blue-sky plays at the Horse Hill project, and points to the possibility of additional resources beyond the 5.7 to 12 million barrels of oil estimated in the well’s Portland discovery.
The findings are based upon NUTECH’s analysis of geochemical samples taken from the Horse Hill well, which was drilled last year.
Stephen Sanderson, chief executive of UK Oil & Gas Investments (LON:UKOG), said: "The additional 250 geochemical analyses confirm that the HH-1 well penetrated a very thick section of world class, thermally mature, oil saturated source rocks in the Kimmeridge section encasing the Kimmeridge limestones and we look forward to receiving NUTECH's further rock sample analyses and the resultant final log interpretation in the coming few weeks."
UKOG chairman David Lenigas, on Twitter, described the latest Horse Hill update as “very significant”.
UKOG last week agreed separate deals to increase its stake in the Horse Hill Development Ltd (HHDL) vehicle, which owns 65% of the project. UKOG now has a 30% interest in HHDL.
Solo Oil (LON:SOLO) has 10% of HHDL, and its chief executive Neil Ritson this morning said: "We are delighted that the work commissioned jointly with UKOG and NUTECH is yielding such positive results and we look forward to further updates as the work progresses."
A well testing programme is planned later this year to examine the production potential of the Portland reservoir, and it is expected to assess the Kimmeridge too.
Barney Gray, analyst at Old Park Lane Capital, says there is potential to add more value to the Horse Hill stakeholders as technical results are firmed up.
"The work conducted by UKOG and NUTECH has significantly broadened the scope of the HH-1 well with the identification of three promising unconventional formations in addition to the existing conventional Portland sandstone reservoir," Gray said in a note.