Doriemus Plc has been informed by UK Oil & Gas Plc ("UKOG"), the majority owner of the operating company Horse Hill Developments Limited ("HHDL"), the operator of Horse Hill licences, of the following operational update in regards to the status and future planning for The Horse Hill Oil Field.
Horse Hill (“HH”) Petroleum Exploration and Development License:
To date, the field has produced and exported over 132,000 barrels (“bbl”) of Brent quality crude from its Kimmeridge and Portland oil pools. Despite the downtime for the Horse Hill-1 well ("HH-1") intervention in Q4 2020, the total Portland oil production for the December quarter was 7,045 bbl.
On 5 November 2020, UKOG completed an intervention to reperforate the full Portland oil producing section, insert a new simplified production tubing string and set the downhole pump at a deeper level to hopefully increase Portland pumping efficiency.
This intervention was immediately followed by an ongoing series of production optimisation trials in an attempt to achieve an optimum balance between oil revenues and water handling and other operational costs. Trials include well-cycling (i.e. shutting in the well for a set period each day to reduce water inflow) and pump fill optimisation. The trials are expected to continue for several months. The operator reports that preliminary results are encouraging, with stable water influx levels achieved by the end of 2020.
Water reinjection plans
Horse Hill's planning consent includes a provision for a formation water reinjection well. Consequently, to remove the need for costly off-site water disposal via tanker and to also help maximise oil recovery by supporting reservoir pressure, the Operator reports that it plans to reconfigure Horse Hill-2z well ("HH-2z") into a water re-injection well as soon as practicable, subject to regulatory consent.
Infill drilling plans
The operator reports that it has completed the interpretation of static and flowing data from November’s Pressure Build Up (“PBU”) test sequence and can confirm the HH-1 estimated connected oil in place volumes of 7-11 mmbbl as reported in October 2018.
The Operator reports that technical work is ongoing to further characterise the Portland reservoir's delivery mechanisms and, in particular, the prevalence and role of the natural fracturing within the Portland section.
The integration of the PBU data, HH-2z rock data, and a completely revised seismic interpretation has provided a far better understanding of the Portland reservoir. Several infill drilling opportunities have now been identified in the Portland oil pool, all up-dip of HH-1 (i.e., at a shallower depth within the oil pool) and above the oil-water contact.
The operator reports that post the flow testing of the Kimmeridge oil pool, during which 52,780 bbl of 40° API oil were produced, further development of the Kimmeridge oil pool also remains an objective for the project. Consequently, the operator plans to drill an infill well to determine the lateral extent of the Kimmeridge oil pool, proven by HH-1 to lie within a natural fracture system of significant vertical extent.
The planned Kimmeridge HH-4 well, also situated updip of both HH-1 and HH-2z, is likely to be a highly inclined or “slant” well, designed with a lateral orientation approximately orthogonal to the known regional open natural fracture direction, so as to maximise the number of open fractures penetrated.
The operator reports that it expects to plan to drill HH-3 Portland and HH-4 Kimmeridge infill wells at Horse Hill once the operator has completed its appraisal drilling campaign on a totally unrelated project to Horse Hill.
Doriemus currently owns 4% of Horse Hill Developments Limited (“HHDL”), which owns 65% of two Petroleum Exploration and Development Licences (“PEDL”) PEDL137 and PEDL246 in the northern Weald Basin between Gatwick Airport and London. The PEDL137 licence covers 99.29 km2 to the north of Gatwick Airport in Surrey and contains the Horse Hill-1 (“HH-1”) discovery well. PEDL246 covers an area of 43.58 km2 and lies immediately adjacent and to the east of PEDL137which hosts the HH-1 oil discovery well located in PEDL137 in the UK’s onshore Weald Basin. This equates to a 2.6% attributable interest in the licences HHDL is the nominated operator (“Operator”) of the Horse Hill License.