UKOG Triples Resource Base
UK Oil & Gas Investments plc has tripled its resource base following a volumetric analysis carried out by Xodus Group Ltd.
Xodus has calculated that the Arreton-2 well, in PEDL331 onshore the Isle of Wight, and the adjacent low-risk Arreton North and South Prospects contain aggregate gross best estimate oil in place of 219 million barrels within Purbeck, Portland and Inferior Oolite limestone reservoirs. The Arreton main structure is thought to contain an aggregate P50 net recoverable volume of 10.2 million barrels and these resources are an aggregate of two separate oil columns, one within the conventional Purbeck and Portland limestone reservoirs and the deepest within a conventional Inferior Oolite limestone reservoir. The two low-risk undrilled adjacent look-alike Arreton prospects are calculated to contain aggregate P50 net prospective resources of 6.8 million barrels, solely within the Portland reservoir unit.
The analysis undertaken by Xodus comprised a detailed review of UKOG’s PEDL331 seismic interpretation, well data, petrophysics and related reports. The petrophysical input parameters used in the study are based on Nutech’s analysis of the Arreton-2 well. Xodus independently derived the volume estimates assisted by a stochastic simulation software tool.
UKOG plans to accelerate its discussions with the local planning authority and has stated that it will submit the necessary applications in 2016 to obtain regulatory consents to appraise the Arreton main oil discovery. Drilling studies and cost estimates for a re-drill of the Arreton-2 discovery have already been completed and plans to acquire additional 2D seismic coverage to further define the Arreton discovery and Arreton prospects will take place after the Arreton-3 well has been drilled.
Stephen Sanderson, UKOG’s executive chairman, commented in a company statement:
“The Arreton main oil discovery and the adjacent Arreton prospects more than triples the company’s net recoverable conventional oil resource base. The additional prospects and leads to the west adds further valuable upside. The PEDL 331 Licence is thus a highly significant and material addition to our portfolio and will be a key part of the company’s growth plans.
“We are well advanced in our plans to drill a vertical pilot and horizontal appraisal of the Arreton-2 oil discovery. We are confident that, since independently derived drilling costs are relatively modest, the economic viability of the project is robust even at reduced oil prices. We will also be looking to employ new and innovative limestone reservoir stimulation techniques to deliver maximum rate and recovery to further boost economic viability, without massive hydraulic fracturing.
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