TIDMUKOG
RNS Number : 7334Q
UK Oil & Gas PLC
30 June 2022
UK Oil & Gas PLC
("UKOG" or the "Company")
Turkey operational update
UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce
that it has been advised by Aladdin Middle East ("AME"), the
operator of the Company's 50% interest in the Resan Licence, that
their field crew has discovered a live, light, 41.7˚API oil seep in
an unused seismic drill-hole (drilled during this year's seismic
programme), approximately 4 km north of the recent Basur-3 ("B-3")
location.
The seep's API gravity is close to the 43˚ API gravity of AME's
nearby producing East Sadak oil field and provides evidence of an
active light oil petroleum system in the central area of the
licence, lying to the north of the joint venture's ("JV") focus on
appraising the Basur-1 oil discovery. This has positive
implications for future exploration in the licence.
The oil was discovered when inspecting unused drilled seismic
dynamite shot holes for potential future use. Oil was initially
recovered on successive days from a sandstone layer at
approximately 4m from surface using a bailer on a cable. Two new
drill holes located 8m to the east and west were completed several
days later and also recovered light oil to surface from the same
depth. Videos of the oil recovery will be placed on the Company's
website.
Oil samples have now gone for analysis in T ü rkiye and the UK.
The JV is also evaluating the potential acquisition of a new
seismic line over the seep to help determine if the oil could be
derived from a deeper subsurface oil accumulation.
Drilling and seismic update:
Interpretation of the new 2D seismic programme has now been
completed and demonstrates that the Basur closure, within which in
1964 Basur-1 ("B-1") is reported to have recovered 500 barrels of
light 35˚API oil to surface over a 6-hour period, looks to extend
much further to the west than originally mapped, with a possible
culmination up to 200m shallower than at B-1. The new seismic also
clearly demonstrates the presence of a major backthrust fault to
the south of Basur-3 ("B-3"), something not evident on the original
legacy seismic. This interpretation helps explain why the reservoir
section was not encountered in the B-3 well.
It was always UKOG's view that, due to the uncertainty of fault
placements near B-3, if a well were not targeted to directly
intersect the reservoir in the vicinity of the B-1 subsurface
location, the possibility of coming in lower than prognosis
remained a material risk. This is why the Company insisted on a
B-3S sidetrack contingency as part of the B-3 operation.
Consideration is, therefore, being given by the JV to the
acquisition of a small infill phase 2 seismic programme, designed
to define a further Basur drilling location up-dip and to the
northwest of B-1 and B-3. This location would be designed to offer
the ability to test the Garzan and Mardin reservoirs within the
Basur structure via a less complex vertical well, a potentially
lower risk lower cost option than the envisaged B-3 sidetrack
("B-3S").
Whilst B-3S still remains a solid and low geological risk
option, the new seismic clearly indicates that it would require a
longer and higher angle trajectory than previously envisaged,
involving drilling through the major backthrust fault at a high
angle within potentially heavily fractured limestone rocks. This
situation potentially adds to the risks of losing mud circulation
and becoming stuck in hole. Whilst this can be mitigated against by
detailed operational planning and the correct rig and equipment
choices, it could increase the drilling risk, complexity and
cost.
Analysis of further geological information obtained from legacy
wells in the Resan area indicated that, whilst oil shows were
encountered at similar levels to B-1, questions arose as to
reservoir quality and the increased chance of fractures acting as
conduits for underlying formation water ingress. Consequently, at
this time, plans for a vertical Resan-6 ("R-6") well have been put
on hold and the partnership will focus on the Basur area, where oil
has flowed to surface at reported good rates.
Consequently, the JV will carefully consider its next step in
the Resan Licence to ensure it maximises its chances for a
successful outcome.
The Company's new depth map plus a pre and post drill seismic
line through the B-1 and B-3 location will be made available on its
web site.
Stephen Sanderson, UKOG's Chief Executive commented:
"The discovery of the light oil seep is positive and encouraging
as it confirms the prospectivity of the central area of the licence
to the north of the Basur oil discovery. The new seismic
acquisition has also proved its worth in helping to explain the B-3
drilling result and to demonstrate that the B-1 discovery could
extend further west and significantly further updip than previously
recognised. Careful consideration will now be given to further
seismic acquisition combined with plans to drill both B-3S and a
new updip B-4 well. "
Qualified Person's Statement
Matt Cartwright, UKOG's Commercial Director, who has 39 years of
relevant experience in the global oil industry, has approved the
information contained in this announcement. Mr Cartwright is a
Chartered Engineer and member of the Society of Petroleum
Engineers.
For further information, please contact:
UK Oil & Gas PLC
Stephen Sanderson / Matt Gormley / Allen Tel: 01483 941493
D Howard
WH Ireland Ltd (Nominated Adviser and
Broker)
James Joyce / Andrew de Andrade Tel: 020 7220 1666
Communications
Brian Alexander Tel: 01483 941493
Glossary of Terms:
deg API A measure of the density of crude oil, as defined by
the American Petroleum Institute
bbl Barrels
bopd Barrels of oil per day
discovery A petroleum accumulation for which one or several exploratory
wells have established through testing, sampling and/or
logging the existence of a significant quantity of
potentially moveable hydrocarbons
limestone A sedimentary rock predominantly composed of calcite
(a crystalline mineral form of calcium carbonate) of
organic, chemical or detrital origin. Minor amounts
of dolomite, chert and clay are common in limestones.
prospect A project associated with a potential accumulation
that is sufficiently well defined to represent a viable
drilling target
sandstone A clastic sedimentary rock whose grains are predominantly
sand-sized. The term is commonly used to imply consolidated
sand or a rock made of predominantly quartz sand
sidetrack Re-entry of a well from the well's surface location
with drilling equipment for the purpose of deviating
from the existing well bore to achieve production or
well data from an alternative zone or bottom hole location,
or to remedy an engineering problem encountered in
the existing well bore.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain.
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