UK Oil & Gas drills holes for Horse Hill reinjection

UK Oil & Gas announced on Monday that, as a “necessary precursor” to its planned Horse Hill-2z Portland formation water reinjection project, it had installed three shallow groundwater monitoring boreholes at its 85.635%-owned producing oil field.

The AIM-traded company said the water injection programme was aiming to improve the field's net earnings by around £0.25m per year, by eliminating the “substantive costs” of tankering and disposing produced saline formation water at distant third-party sites.

It said the removal of tankering would also reduce the field's overall carbon footprint.

The injection itself would help to maintain reservoir pressure, which could also help to improve ultimate oil recovery.

Initial sampling of the boreholes, which terminate within the impermeable Weald Clay formation, found no obvious groundwater immediately beneath the site.

A three-month baseline monitoring period was now underway before the start of reinjection operations.

Surrey County Council and the Environment Agency approved the installation of the boreholes, with frequent sampling designed to ensure that no produced saline Portland formation water penetrated into the Weald Clay sediments underlying the site.

“The new boreholes are a key step towards delivering HH-2z produced water reinjection, ultimately designed to help reduce operating costs by some £0.25m per year and improve the field's oil recovery,” said chief executive officer Stephen Sanderson.

“The work is fully in keeping with current environmental standards and practices and demonstrates UKOG's responsible attitude towards ensuring the area beneath the site remains as well protected as possible.”

At 1616 GMT, shares in UK Oil & Gas were down 0.46% at 0.07p.

Reporting by Josh White for Sharecast.com.