Exploration and production company UK Oil & Gas (UKOG) has acquired further interest in the Horse Hill oilfield in Surrey, UK.
UKOG, which holds the largest onshore licence acreage in the Weald Basin, paid oil and gas company Doriemus $2.7m (£2.1m) to acquire an additional 6% shareholding in the subsidiary Horse Hill Developments (HHDL).
HHDL is the operator of the Horse Hill oilfield as well as the surrounding prospective PEDL137 and PEDL246 licences, holding a 65% direct interest. Upon completion of the deal, UKOG will hold a 77.9% direct interest in HHDL and a 50.64% interest in the Horse Hill oilfield and licences.
UKOG’s target in 2019 is to move Horse Hill’s test-based oil production into permanent production by the end of the year. UKOG plans to start drilling two horizontal wells, HH-2 Portland and HH-1z Kimmeridge, in spring 2019.
Strategic reviews have determined that the HH-2 Portland well is expected to produce approximately 720-1080 barrels of oil per day (bopd), with subsequent planned wells expected to increase production to over 2,000bopd in 2020.
UKOG CEO Stephen Sanderson said: “We are delighted to acquire this further share of our Horse Hill flagship oil production project. The transaction now firmly establishes UKOG as the majority interest holder in the Horse Hill Portland and Kimmeridge oil field, together with the highly prospective surrounding licence acreage.
“Horse Hill is UKOG’s stated 2019 focus and we are on track to deliver continuous test-derived oil production until the start of long-term stable oil production by year end.
“The plan is designed to make Horse Hill the Weald Basin’s number one oil producing field in 2019 and to move UKOG upwards into the top tier of UK onshore oil producing companies shortly afterwards.”
Permits for up to 20 years of permanent production in Horse Hill are expected to be in place for autumn 2019.