UK Oil & Gas files planning application for drilling at Arreton

UK Oil & Gas has filed a planning application with the Isle of Wight Council for the appraisal drilling and flow testing of the Arreton oil discovery, it announced on Monday.

The AIM-traded firm said that following a one-week statutory notice period, the application was expected to go "live" on 27 March.

It said the application detailed the planned construction, operation and eventual decommissioning of a well site for the appraisal of hydrocarbons via a deviated borehole, being ‘Arreton-3’, as well as a possible horizontal sidetrack off the "mother" borehole, being ‘Arreton-3z’, all to be undertaken within a temporary period of three years.

UKOG said it had spent “considerable” time and undertaken “much research” to minimise the potential noise and visual impact of the site, which would be largely screened from public view.

The company said it had chosen a site adjacent to land which already supported non-agricultural commercial uses.

It said the land immediately to the east supported the Wight Farm Anaerobic Digestion Energy Power Station, and to the west supported the Blackwater Quarry and ancillary operations connected to the working of aggregates.

As it reported in its July 2018 AIM admission document, the Arreton conventional oil discovery - a geological analogue of the firm’s Horse Hill oil field where it has a net interest of 85.635% - contains three stacked Jurassic oil pools containing a third party-calculated aggregate gross P50 oil in place of 127 million barrels.

UKOG said its net share of associated mid case recoverable contingent resource volumes were stated by the third party, Xodus, to be a material 14.9 million barrels.

The A-3 well was envisaged to duplicate the A-1 and A-2 discovery wells drilled by BP and the Gas Council, now Spirit Energy, in 1952 and 1974, respectively.

Should short term flow testing of A-3 indicate likely commercial viability, it was expected that an A-3z horizontal sidetrack would be drilled and put on extended well test to assess longer-term flow performance.

UKOG holds a 95% operated interest in Petroleum Exploration Development Licence 331, which extends over a 200 square kilometre area covering most of the southern half of the Isle of Wight.

“Whilst UKOG's primary focus will remain on maintaining continued long-term stable and profitable oil production at Horse Hill, our efforts will also continue with those actions necessary to ensure that both the Arreton oil and Loxley gas appraisal projects move forwards as swiftly as the current UK situation permits,” said chief executive officer Stephen Sanderson.

At 1451 GMT, shares in UK Oil & Gas were down 4% at 0.38p.