UKOG climbs down on Horse Hill oil estimates

15th Apr 2015 10:06

After recently announcing what had been hailed as the largest onshore UK oil find in three decades, UK Oil & Gas Investments has rained on the fevered media parade by clarifying that it has little idea of the real size of resource, beyond its own acreage.AIM-listed UKOG pointed out that the single well drilled at Horse Hill in the Weald Basin in southern England has been calculated as having total oil in place (OIP) of 158m barrels per square mile, which it extrapolated to a 50bn-100bn barrels basin-wide.But it added: "The OIP hydrocarbon volumes estimated should not be considered as either contingent or prospective resources or reserves."The company pointed out that the Horse Hill licences, in which it has a 20.358% interest, cover 55 square miles of the Weald Basin, across which it is estimated that the relevant Jurassic section covers approximately 1,100 square miles."The company has not undertaken work outside of its licence areas sufficient to comment on the possible OIP in either the approximate 1,100 square miles or the whole of the Weald Basin," it noted.In recent days, oil and gas experts have dismissed the claims made by UKOG chairman David Lenigas that 100bn of oil lies in the site near Gatwick Airport.Matthew Jurecky, head of energy research at GlobalData, told The Telegraph that estimates for 100bn barrels of oil were "very misleading" and criticised extrapolations of the data from a single well's result.He argued that just 15m barrels of oil may actually be recoverable from the Horse Hill site due to the geology of Weald Basin.Reuters' John Kemp noted that UKOG was "much more optimistic" than the British Geological Survey's 2014 estimate, which put the total amount of oil in place at between 2bn and 9bn barrels in the basin.Last week, UKOG chief executive Stephen Sanderson said: "Based on what we've found here, we're looking at between 50 and 100bn barrels of oil in place in the ground. We believe we can recover between 5% and 15% of the oil in the ground, which by 2030 could mean that we produce 10%-to-30% of the UK's oil demand from within the Weald area."Meanwhile on Wednesday, fellow Horse Hill investor Solo Oil has raised £2m to fund working capital as it works with partners on such projects as the Weald Basin.At 10:46 on Wednesday, the independent oil explorer's share price was down 1.89% at 2.23p