UK oil company Doriemus (ASX: DOR) is making progress at its partially-owned Horse Hill oil and gas field close to Gatwick airport, with the “clean up” phase now complete and oil and gas flowing to surface over the last four days.
Doriemus said the initial well “clean-up” phase of the Portland extended well test (EWT) programme has been completed “according to plan” by the operator of the project, Horse Hill Developments (HHDL).
As it stands, Doriemus holds a 6.5% attributable interest in the licences via its 10% stake in HHDL.
Doriemus said that over the past four days, the well has delivered a sustained dry oil and solution gas flow to surface via pump and natural flow.
The highest recorded hourly metered rate to date equates to an implied daily rate of 352 barrels of oil per day. Doriemus added that corresponding solution gas flows have been measured up to an implied rate of 30,000 cubic feet per day.
“Test results to date have far exceeded our initial expectations. Although we are in the very early stages of our 150-day test campaign at Horse Hill, the signs to date are extremely positive for the Portland oil pool,” said David Lenigas, executive chairman of Doriemus.
“The unexpected bonus of natural oil flow to the surface, without the use of a pump, gives us cause for further optimism regarding the Portland’s overall commercial potential,” Mr Lenigas added.
Furthermore, several periods of sustained natural flow (ie flow to surface without pumping) have also been observed over the past few days, with the most productive period producing an implied daily dry oil rate of 228bopd over a two-hour period.
A total of 463 barrels of light sweet 36 API crude were recovered to surface during the clean-up period, together with all 141 barrels of completion and kill fluids (saline water) used to suspend the well in 2016.
Earlier this week, Doriemus delivered its first tanker containing 214 barrels of dry oil to BP’s Hamble oil terminal.
According to Doriemus, HHDL’s well will now be shut in for a planned 24-hour pressure build-up test.
Operations will then include further flow parameter optimisation, followed by the first of three planned flow sequences designed to assess whether the Portland oil pool at the licence contains a commercially viable volume of oil.
The first test sequence will likely include an optimised maximum rate test to gauge best steady-state flow conditions and determine the total oil volume likely to be locked up within Portland’s oil pool.
Bulking up oil in the UK
Flow testing operations commenced in February 2016 and were completed in March 2016. Flow testing far exceeded expectations with an aggregate stable oil rate of 1,688bopd achieved, from the Lower Kimmeridge, Upper Kimmeridge and Upper Portland reservoirs.
The oil extracted contained no water and no clear indication of any reservoir pressure depletion was observed.
Based on analysis of published reports from all significant UK onshore discovery wells, the 1,688bopd flow rate is likely the highest aggregate stable rate from any onshore UK discovery well.
As a country, the UK produced 1.42 million boepd in 2014, of which 59% was oil/liquids. In 2013 the UK consumed 1.508 million bpd of oil and 2.735tcf of gas, making the country a net importer of hydrocarbons having been a significant exporter in the 1980s and 1990s.
Most interesting of all is that 98% of the UK’s production comes from offshore fields in areas like the North Sea.
However, there is substantial opportunity to raise the UK’s onshore oil production – an industry change that is being welcomed by government policy because it helps the country to enhance its self-sufficiency among ongoing Brexit fears that could potentially affect the UK’s energy prices and domestic energy consumption mix.
By mid-morning trade, Doriemus’ share price had surged more than 16% to reach A$0.18.