UK Oil & Gas Investments has paid £3.5m to acquire another licence in the highly prospective Weald Basin, near Gatwick Airport.
The firm has signed agreements with Celtique Energie and Magellan Petroleum to acquire 100% ownership of the 116 sq miles Weald Basin licence PEDL234.
The transaction makes UKOG the leading player and acreage holder in Kimmeridge oil and a significant player in the UK onshore oil industry.
The acquisitions more than double its net acreage holdings in the prime Kimmeridge Limestone Oil province where it previously announced it had discovered a massive amount of oil at its Horse Hill site. UKOG said last year that there could be up to 100bn barrels of oil in the area.
The licence is situated to the south west of UKOG’s main Kimmeridge oil interests in Horse Hill (PEDL137, PEDL246) and Holmwood (PEDL143) and straddles the centre of the Weald Basin.
UKOG said previous analyses at the site “strongly suggest that the licence presents look-alike Kimmeridge Limestone oil potential to that seen at Horse Hill”.
Chairman Stephen Sanderson said the latest acquisition was a “transformational step”.
“The transaction more than doubles our net acreage position and potential recoverable resource base in the most prospective part of the play, all at a very reasonable entry price. The transaction makes UKOG the leading player and acreage holder in Kimmeridge oil and a significant player in the UK onshore oil industry,” said Sanderson.
The potential “cherry on the cake” from this acquisition said Sanderson is the opportunity to appraise the conventional Godley Bridge gas discovery 30-plus years after its discovery and, most importantly, at the same time to test the underlying Kimmeridge limestones through a single dual-purpose well.