UK Oil and Gas prepares production flow tests at Horse Hill-1

UK Oil and Gas Investments (UKOG) announced on Tuesday that key contracts and requisite funding commitments had been put in place to begin production flow testing at its Horse Hill-1 interest in the Weald Basin.

In a note to investors, UKOG also advised that as approval had already been granted by the Surrey County Council in October, drilling would begin upon the discharge of the council's pre-commencement planning conditions at the end of winter.

Following a "short period" of upgrades to the site, UKOG planned to undertake a 150-day production testing programme focussed upon the Portland, KL3 and KL4 reservoirs, aimed at confirming that Horse Hill-1's reservoirs were connected to a commercially viable oil voume.

Stephen Sanderson, UKOG's executive chairman, said, "The 2018 Horse Hill programme is a key step towards delivering UKOG's goal of commercial production and significant cash flow by early 2019."

"The programme, geared to provide data to support a declaration of commerciality, will benefit greatly from the many significant Kimmeridge and operational learnings gained at our Broadford Bridge discovery," he added.

UKOG also noted that it had "successfully removed" a group of "around 20 activists" from the site on 2 December with the assistance of a 42-person team made up of High Court bailiffs and employees of a "specialist protester removal contractor".

The group said it was "rigorously pursuing all available legal means to seek recourse."

As of 0900 GMT, shares had gained 5.01% to 3.73p.