UK Oil & Gas PLC - Acquisition of Further Interest in PEDL143 Exploration Licence

Source Press Release
Company Europa Oil & Gas (Holdings) PlcUK Oil & Gas Investments PLCUnion Jack Oil plc 
Tags Asset Deals, Deals, Upstream Activities
Date April 16, 2019

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that it has entered into a binding heads of terms with both Europa Oil and Gas Limited ("Europa") and Union Jack Oil plc ("Union Jack") to acquire their respective 20% and 7.5% interests in the highly prospective PEDL143 exploration licence ("Licence"). Upon completion, the Company will hold a majority operated 67.5% interest in the Licence.

The Licence contains the significant "A24" Portland and Kimmeridge oil prospect that is a direct geological look-alike to the Company's Horse Hill oil field, situated on-trend some 8 km to the east. Several smaller prospects of similar size to the nearby Brockham Portland oil field have also been identified. Work is well advanced to find a suitable drilling location that is situated outside of the Surrey Hills Area of Outstanding Natural Beauty ("AONB").

As previously reported in UKOG's latest Annual Report, it is the Company's strategy to hold majority interests in key operated assets, particularly those that offer significant recoverable resource potential in the same Portland and Kimmeridge reservoir targets as the Company's Horse Hill oil field.

Transaction Summary

The total considerations of £300,000 and £112,500 to Europa and Union Jack, respectively, with an effective date of 15 April 2019, will be satisfied through the issue of an aggregate total of 35,683,391 new ordinary shares in UKOG ("Consideration Shares"), with 25,951,557 and 9,731,834 Consideration Shares issued to Europa and Union Jack respectively. The Consideration Shares are calculated based upon the 5- day volume weighted average price to market close on Friday 12 February 2019 of 1.156 pence.

Completion of this acquisition, which is subject to the usual Oil and Gas Authority consent, will be announced in due course.

Stephen Sanderson, UKOG's Chief Executive, commented:

"We are delighted to acquire this further significant share of such a highly prospective exploration Licence, which contains, in UKOG's view, one of the best undrilled Portland and Kimmeridge prospects in the Weald Basin. The proximity to UKOG's Horse Hill field, together with the Company's operational and subsurface expertise in the area, adds potentially significant operational and cost synergies to the project's overall benefit. UKOG, as the new Licence operator, will now push ahead to finalise a new well location outside of the Surrey Hills AONB.

This acquisition is in full accordance with our stated strategy of holding majority operated interests in key assets."

Qualified Person's Statement

Rob Wallace, UKOG's principal technical advisor, who has over 40 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Wallace is a Chartered Scientist, Chartered Geologist and Fellow of the Geological Society of London, an active member of the American Association of Petroleum Geologists, a member of the Petroleum Exploration Society of Great Britain and a member of the South African Geophysical Society.

UKOG Licence Interests           
  The Company has interests in the following UK licences:       
                       
  Asset    Licence  UKOG's    Licence  Operator  Area  Status 
    Interest    Holder  (km2) 
  Avington 1  PEDL070  5%    UKOG (GB)  IGas Energy  18.3  Field currently 
    Limited  Plc  temporarily shut in 
  Broadford          UKOG (234)  UKOG (234)    BB-1 & 1z oil 
  PEDL234  100%    300.0  discovery, planning 
  Bridge 3      Ltd 4  Ltd 4 
              application approved 
                   
                    Seeking alternate 
  A24 3                  sites to drill A24 and 
    PEDL143  67.5%    UKOG  UKOG  91.8  other 
                    Portland/Kimmeridge 
                    prospects 
                     
  Horndean 1  PL211  10%    UKOG (GB)  IGas Energy  27.3  Field in stable 
    Limited  Plc  production 
              Horse Hill  Horse Hill    Production tests 
                   
                       

Horse Hill 5  PEDL137  50.635%  Developments  Developments  99.3  ongoing, two further 
        Ltd ⁶  Ltd ⁶    appraisal wells 
        Horse Hill  Horse Hill    scheduled for 2019 
           
Horse Hill 5  PEDL246  50.635%  Developments  Developments  43.6  As above 
        Ltd⁶  Ltd ⁶     
              Preparing planning 
Isle  of            submission for 
Wight    PEDL331  95%  UKOG  UKOG  200.0  Arreton-3 oil 
(Onshore) 2,  appraisal well and 
            Arreton South 
              exploration well 
Markwells    PEDL126  100%  UKOG (GB)  UKOG (GB)  11.2  Well plugged and 
Wood    Limited  Limited  abandoned 
       
               

Notes:

1.Oil field currently in stable production.

2.Oil discovery pending development and/or appraisal drilling.

3.Exploration asset with drillable prospects and leads.

4.Contains the Broadford Bridge-1 /1z Kimmeridge oil discovery, the eastern extension of the Godley Bridge Portland gas discovery plus further undrilled Kimmeridge exploration prospects.

5.Oil field with three productive and commercially viable zones, EWT ongoing, two further wells HH-1z and HH-2 scheduled in Q2 2019, development underway subject to grant of planning consent, expected in Q3 2019.

6.UKOG has a direct 77.9% interest in HHDL, which has a 65% interest in PEDL137 and PEDL246.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd