Stephen Sanderson, UKOG’s Executive Chairman, commented: “Following the recent highly significant HH-1 flow test results this acquisition is an important and entirely logical step for the Company. It provides us with a far more material interest in the exciting HH-1 Portland and Kimmeridge limestone oil discovery, and importantly, is part of our ongoing strategy to consolidate and expand our licence position in the new and potentially significant Kimmeridge Limestone oil province.
With our increased interest in Horse Hill we will be looking hard at translating the commercial flow rates seen from the Kimmeridge and Portland flow tests at Horse Hill – 1 towards commercial production. To this end, further long-term production tests of all zones are now planned by the Horse Hill Licence holders within the next year, subject to regulatory approvals. These tests are planned to be followed, by a number of horizontal Kimmeridge Limestone side-track wells, 3D seismic and a new stand-alone Portland appraisal/development well.
The next year to 18 months will be an exciting journey for both the Company and the new Kimmeridge Limestone oil play. We know HHDL are committed to putting the Horse Hill Portland and Kimmeridge zones in to long term production as soon as practicably possible.”
UK Oil & Gas Investments PLC (London AIM and ISDX: UKOG) announces that it has acquired all of Angus Energy Holdings UK Limited’s remaining 7.8% interest in onshore Weald Basin licences PEDL137 and PEDL246 (“the Licences”).
The Company has significantly increased its net working interest in the Licences from 19.968% to 27.3%. The Licences, covering an area of 55 square miles, contain the new Horse Hill-1 (“HH-1”) Portland sandstone and Kimmeridge Limestone oil discoveries north of Gatwick Airport and which, as previously reported on 21 March, flow tested at a significant “North Sea-like” commercial aggregate stable dry oil rate of 1688 barrels of oil per day.
Transaction Summary
For a total Consideration of GBP1.8 million, the Company will receive Angus’ 7.8% beneficial interest in the Licences via the purchase of Angus’ remaining 12% shareholding in Horse Hill Developments Limited (“HHDL”). The Consideration, with an effective date of 15 April 2016, is comprised of GBP1 million in cash and GBP0.8 million in the form of 43,886,116 UKOG ordinary shares. Furthermore, GBP200,000 of the cash element will be paid directly by Angus to the Licence Operator, HHDL, to reconcile cash calls for the now completed HH-1 flow test operations. The transaction requires no further regulatory approvals.
Application will be made for these New Ordinary Shares to be admitted to trading on AIM and it is anticipated that trading in such shares will commence on or around 22 April 2016.
Following Admission, the Company’s enlarged issued share capital will comprise 2,087,336,802 ordinary shares. The Company does not hold any shares in treasury. This figure of 2,087,336,802 ordinary shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA’s Disclosure and Transparency Rules.
HHDL and the Company’s Interest in the Licences
HHDL is a special purpose vehicle which owns a 65% working interest and operatorship of the Licences. The Company now holds a 42% beneficial shareholding in HHDL which equates to a 27.3% net working interest in the Licences. The remaining 35% interest in the Licences is owned by Magellan Petroleum UK Limited.
HH-1 Discovery Well Location and Licence Location
The HH-1 well is located within onshore exploration Licence PEDL137, on the northern side of the Weald Basin near Gatwick Airport. PEDL246 lies adjacent to and immediately to the East of PEDL137. UKOG owns a 27.3% interest in the Licences.
