UK Oil & Gas gets production permit for Horse Hill after 31 months

UK Oil & Gas announced on Thursday that the Environment Agency has granted its 85.635%-owned Horse Hill oil field a full production permit.

The AIM-traded firm said the permit would enable production and water re-injection operations, the incineration of waste gas, maintenance and workovers, and the drilling of further development wells.

To date, production at Horse Hill had operated under the umbrella of prior testing consents, which excluded any ability to reinject produced saline formation water.

UKOG said it could now proceed with its plans to convert Horse Hill-2z into a water injector during 2022, which, if implemented, would remove the need for costly transportation and disposal of produced saline formation water at remote third-party sites.

The initial application for the permit was submitted to the Environment Agency 31 months ago, on 24 September 2019.

Following the permit grant, a review of the viability of reinstating Kimmeridge production and further new Portland infill drilling locations were now underway, the company added.

“This long-awaited Environment Agency permit finally enables UKOG to return Horse Hill's produced saline formation water back to the oil-bearing Portland rocks where it originated, lowering operating costs per barrel, removing HGV tankers from congested roads and reducing the field's overall carbon footprint,” said chief executive officer Stephen Sanderson.

“The ability to reinject makes both environmental and economic good sense.”

At 1158 BST, shares in UK Oil & Gas were up 53.64% at 0.17p.