Gatwick oilfield potential up fivefold

As intrepid oil explorers board their planes at Gatwick, some may have found it more useful looking a little closer to home, less than two miles up the road in fact. Ongoing analysis of the Horse Hill-1 well has flagged the potential for another 407 net feet of oil pay across three intervals, which could take its gross oil pay to 509 net feet. Granted, the oil majors won't bat an eyelid, but this new data adds to current estimates of 3.1 million barrels of gross oil.

The well encountered good quality rocks during drilling, which UK Oil & Gas Investments described as thermally mature and oil saturated. Further analysis should come from with reservoir evaluation and optimisation expert NUTECH in the coming weeks, but its initial findings indicate that the Kimmeridge section of the well contains an oil pay section of over 300 feet, with another 73 feet potentially in the Oxford and Lias rock formations. Investors will be waiting for the confirmation from the petrophysical analysis and reservoir intelligence company eagerly.

The Kimmeridge section in the well has a vertical thickness of 1,496 feet and contains three discrete rock units lying above, between and below the Upper and Lower Kimmeridge limestone bands. The conglomerate of explorers trying to tap into this reserve say the possible "sweet spot" of the well lies at 2,931 and 3,084 feet measured depth (ftmd), between the base of the upper limestone and top lower limestone. An additional rock unit 140 feet thick lies between the Middle Jurassic Oxfordian and the Cornbrash sections, at 5,400 and 5,540 ftmd.

"We view today's update by UKOG as highly encouraging, given the 5x increase in potential oil in place at the HH-1 well," said Brendan D’Souza, an analyst at WH Ireland. "We currently leave our Net Asset Valuation based Target Price unchanged at 1.30p/ share and excitedly look forward to the final evaluation of oil in place volumes at HH-1, which we believe should be announced in April. We reiterate our Buy rating."

Horse Hill is being drilled by a special purpose company called Horse Hill Development Limited. It holds the rights to a 65% participating interest and operatorship in Licence No. 137 (PEDL 137) at the Horse Hill oil field. US firm Magellan Petroleum Corporation owns the rest.

Stellar Resources, Solo Oil, UK Oil & Gas Investments - all either current or former David Lenigas companies - and Regency Mines, Alba Mineral Resources and Doriemus, all have an interest in Horse Hill.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.