UK Onshore
Onshore / Appraisal and Development
Envoi has been engaged by UK Oil and Gas Plc (“UKOG”), the UK-based, AIM-listed company to assist in the search for a partner to join in the development of its Loxley gas discovery in the proven producing Jurassic play fairway of the Weald Basin, onshore southern England. The gas is trapped in an Upper Jurassic aged Portland Sandstone closure comprising a west-east elongate 4-way dip anticlinal structure which straddles two onshore UK licences involving PEDL 235 operated by Star Energy to the west and UKOG’s 100% owned and operated PEDL 234 to the east. UKOG entered the 300 km2 licence in 2016, acquiring 100% interest from Celtique Energie and Magellan. Since then UKOG has conducted various G&G work over the Loxley structure, including basin modelling, reservoir studies and pipeline engineering.
PEDL 235 contains the original 1982 Conoco Godley Bridge discovery and appraisal wells, whilst UKOG’s PEDL 234 contains the large undrilled Loxley culmination on the same closure. The Godley Bridge discovery flowed 1.5 mmcf/d gas on test from the Portland, although this is now evaluated to have been significantly less than it is estimated capable of due to the ‘skin effect’ caused by well damage. The closure was then further delineated by the other 1980s Conoco wells, all of which are now interpreted to have penetrated just the margins of the Portland closure and gas accumulation. UKOG has remapped the existing 2D seismic and modelled the regional velocities and statics resulting in an updated depth map that defined a large undrilled Portland closure named ‘Loxley’ with as much as 100 ft at its crest. This has been independently verified by RPS whose 2023 CPR confirms the potential to contain 40+ Bcf gross 2C resources and an upside of over 68 Bcf (3C) resources. The Loxley (Godley Bridge) gas reservoir is the Upper Portland sandstone, interpreted to have been deposited in a shallow upper Jurassic marine environment south of the London-Brabant Massif. This immediately overlies the world-class Kimmeridge Clay source rock and is sealed by thin overlying carbonates and the Purbeck Anhydrite.
Significantly, UKOG’s PEDL 234 lies north of the designated Area of Outstanding Natural Beauty (AONB) which will ensure rapid development can be achieved via a 6.6 km pipeline connection to the existing gas grid, with available capacity, if the planned appraisal well confirms a gas discovery.
Once the commercial viability has been established by the Loxley-1 well, a field development plan must be submitted by the end of 2025. The production is anticipated to be dry gas with minimal condensate fluid. The local gas transmission system operator has confirmed that it has the capacity for all of the potential future gas from Loxley and that there is an identified grid entry point.
UKOG is now seeking a partner(s) willing to earn material share of its Licence in return for funding the planned Loxley-1 well which has the necessary environmental and planning permissions. The appraisal well, subject to tendering and procurement, is estimated likely to cost £ 8 million including the site construction, drilling, coring and flow testing. The economics show that just the 2C resource potential could generate an NPV10 of over £ 80 million net to UKOG’s Licence.
