UK Oil & Gas jumps on plans for nine new wells

UK Oil & Gas (UKOG) jumped on Wednesday after releasing its plans to drill up to nine production, appraisal and exploration wells during 2019 and 2020.

The AIM traded oil and gas company, which is the largest onshore licence acreage holder in the Weald Basin, said its initial focus will be to move Horse Hill's ongoing test-based oil output into permanent production by the end of the year through the drilling of two new horizontal production wells.

The company holds a 46.735% interest in the Horse Hill oil field and has a production target of 720-1,080 barrels of oil per day (bopd) from the first horizontal well, with subsequent horizontal wells planned for 2020 designed to boost gross production to over 2,000 bopd, potentially placing UKOG within the top three oil producing companies in the UK onshore sector.

Stephen Sanderson, UKOG's chief executive, said: "If successful, this comprehensive plan aims to add significant value to the company and shareholders via transforming UKOG from an exploration and appraisal company into a fully-fledged producing oil company by the end of 2019."

Over the course of the next year, the company aims to convert around 15.6m barrels of its net discovered conventional recoverable resources into reserves following works at its wholly owned Broadford Bridge discovery and the 95% owned Arreton discovery on the Isle of White.

UKOG said that further exploration wells are also planned for both sites in 2020.

"The company's key overall ambitions remain unaltered: to support the drive for increased UK energy security and to create value for shareholders whilst ensuring our operations preserve the natural beauty of the Weald. We aim to continue to be approachable, understanding and cooperative neighbours. Our plans for the next few years will continue to adhere to these solid principles," said Sanderson.

UKOG's shares were up 10.64% at 1.30p at 1300 GMT.