StockMarketWire.com - Oil company UK Oil & Gas posted a first-half loss and reported ongoing well issues at its Horse Hill development south of London.

Pre-tax losses for the six months through March amounted to £0.90m, compared to losses of £1.72m on-year. Revenue fell to £0.09m, down from £0.1m.

The company had recorded unwanted water ingress into its HH-2z horizontal well at Horse Hill.

'It is now clear from the image logs recorded in the well, that both the oil and water flow originated from a series of extensive natural fractures, primarily at the toe of the well, although there are also further natural fractures observed higher up in the well,' it said.

'The plug was initially successful in returning flow to the reported high oil cut, however water cut built up, necessitating the well to be produced intermittently as the water disposal costs outweighed oil revenues.'

The HH-2z well was currently shut in for a long duration pressure build up test to re-assess its connected oil volume.

'We are reviewing a number of options for the future use of HH-2z, including stimulation to return it into long-term oil production, sidetracking the well to a different subsurface location and possibly converting it into a future water re-injection well to further reduce future operating costs,' the company said.


At 2:58pm: [LON:UKOG] UK Oil Gas Investments Plc share price was -0.06p at 0.23p



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