StockMarketWire.com - UK Oil & Gas said further testing at its Horse Hill joint venture near Gatwick Airport indicated it could achieve higher-than-expected production rates.

A re-perforation of the Portland discovery at Horse Head, commonly referred to as the 'Gatwick Gusher', added 14 feet of new oil pay and increased well productivity by up to 65%.

Oil consultant Xodus Group assessed that Portland vertical well optimisation could achieve a sustainable initial pumped rate of around 362 barrels of oil per day when long-term production commenced.

Plans were now being formulated to drill a horizontal Portland appraisal well, with a targeted sustainable daily production rate of 720 to 1,080 bopd.

'The company's economic modelling indicates that HH-1 Portland is robustly commercial at even the lowest observed sustainable daily rate of 140 bopd and at oil prices below $60 per barrel,' the company said.

'A formal Horse Hill Developments declaration of Portland commerciality is therefore expected shortly following receipt of Xodus' final connected oil volume analysis.'

Testing of the nearby Kimmeridge discovery had now commenced, UK Oil & Gas said.

Minority shareholders in Horse Head include Alba Mineral Resources, Gunsyd, Primorus Investments and Solo Oil.

UK Oil & Gas chief executive Stephen Sanderson said the forecast sustainable Portland production rate of 362 bopd had significantly exceeded initial test programme expectations.

'This high rate, together with our economic modelling, strongly indicates that the HH-1 Portland vertical well is commercially viable and robustly economic at the lowest observed sustainable test rates and the predicted future sustainable production rates,' Sanderson said.

'In the light of Portland success, we now eagerly anticipate the start of the Kimmeridge test programme, the goal of which is to establish the commerciality of the underlying KL3 and KL4 oil pools which flowed so prolifically in the 2016 short duration test programme.' At 2:18pm:

[LON:ALBA] Alba Mineral Resources PLC share price was +0.01p at 0.51p

[LON:GUN] Gunsynd Plc Ord 0.01p share price was 0p at 0.03p

[LON:PRIM] Primorus Investments Plc share price was 0p at 0.13p

[LON:SOLO] Solo Oil PLC share price was +0.05p at 2.3p

[LON:UKOG] UK Oil Gas Investments Plc share price was +0.1p at 2.35p



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