Junior energy firm UK Oil & Gas (UKOG) announced Friday that it has signed a deal with Magellan Petroleum (UK) to buy a 40-percent interest in the Markwells Wood license (PEDL 126) in England's Weald Basin for a nominal sum of one pound.
The acquisition will increase UKOG's interest in Markwells Wood to 100 percent, the firm said.
The Markwells Wood oil discovery was made in 2011. An extended well-test program over a six-month period from end 2011 to May 2012 produced 3,931 barrels of oil. The peak flow rate over a 24-hour period was approximately 100 barrels per day.
UKOG's current interpretation of the Markwells Wood-1 well data and 2D seismic over the discovery and the neighboring producing Horndean oil field (in which UKOG has a 10-percent interest) shows that Markwells Wood likely represents the eastern extension of the Horndean field, sharing the same structural spill point and interpreted oil down to depth of 4,446 feet.
UKOG CEO Stephen Sanderson commented in a company statement:
"The acquisition represents an excellent opportunity to further consolidate the company's interest in the Markwells Wood oil discovery. UKOG's increased ownership will enable us to more fully exploit identified subsurface and infrastructure synergies shared with the adjacent producing Horndean oil field in which the company holds a 10-percent interest.
"Given that we view Markwells Wood to be the eastern extension of the Horndean oil accumulation, we look forward to working with IGas Energy, operator of Horndean, to help realize value from the significant oil in place demonstrated by the discovery."
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