UK Oil & Gas (UKOG) has announced that further to its announcement of 28th March 2023, the Company's relevant subsidiaries and Pennpetro Energy Plc ('PPP') have agreed to extend the conditional binding Horse Hill farm-in term sheet until 30 June 2024, whereby PPP will farm-in to the Horse Hill Oil Field on an incremental production only basis by paying 100% of both a 12 km² 3D seismic survey and a new crestal production well, Horse Hill-3 ("HH-3"). The farmin remains subject to the completion of the formal farmin agreement and necessary regulatory consents. The Company currently holds an effective 85.635% interest in Horse Hill and the surrounding PEDL137 and PEDL246 licences.
As per the 28th March 2023 RNS, UKOG's subsidiaries will retain 100% ownership and rights to all oil production and revenues from Horse Hill-1 ("HH-1"), ownership of HH-2/2z and will remain as the field and licence operator. Upon completion of a successful farmin well by PPP, the Company's subsidiaries will hold a 51% interest in all HH-3 production with UKOG's net effective interest in HH-3 being 43.67%.
3D seismic acquisition is currently targeted for H1 2024.
Stephen Sanderson UKOG's Chief Executive commented:
'In addition to the continued profitability of the existing oil production from HH-1, which UKOG's subsidiaries will retain all rights to, this farmin offers the prospect of increased production and revenues to the Company at zero capital cost, helping preserve working capital for the Company's other significant growth projects, Dorset hydrogen storage and Loxley conventional gas.'
Source: UKOG
