AIM-listed UK Oil & Gas (UKOG) has sold two onshore oil and gas licences in Hampshire to fund its hydrogen storage investments in Dorset and Yorkshire.
The firm said it agreed a deal to sell its subsidiary holding a stake in the oil and gas producing licences to a small firm based in Notthinghamshire, Servatec Holdings Limited, for £400,000.
UKOG said the book value of the subsidiary in the 2024 interim financial statements was £635,000 and that it had made a profit of £140,000 in 2023.
The sale includes UKOG’s 10% interest in PL211 and a 5% interest in PEDL070, containing the Horndean and Avington oil fields in Hampshire.
In February, UKOG said the Horndean field had produced 2.4 million barrels of oil since the start of production in 1987.
It is thought the firm still retains fully-owned PEDL234 licence at
Loxley/Godley Bridge, a natural gas/hydrogen feedstock appraisal project, and its majority stake in PEDL137 Horse Hill project, both in Surrey.
UKOG chief executive Stephen Sanderson said the move was “fully in keeping” with its shift away from hydrocarbons into hydrogen storage and production.
In 2022, through its subsidiary UK Energy Storage (UKEn), the firm struck an agreement to lease two sites at the former Royal Navy port in Dorset where it plans develop an energy hub centred around a 1 billion cubic metre hydrogen-ready salt cavern gas storage facility.
Last year it raised £500,000 from investors to acquire land for a salt cavern hydrogen storage site in East Yorkshire which has direct access to the North Sea. Proximity to the sea will provide the brine necessary to dissolve the caverns.
The site is also within the boundaries of East Coast cluster, which takes in a range of low-carbon projects on the Humber and Teesside, including industrial carbon capture and low-carbon hydrogen production schemes.
Sanderson said: “This divestment is fully in keeping with the company’s stated transition away from hydrocarbons into the clean hydrogen storage and production sector, with the proceeds being utilised to further our subsidiary UK Energy Storage’s material salt cavern hydrogen storage projects in Dorset and Yorkshire.
“We wish Servatec well in their future stewardship of UKOG (GB)’s assets.”
