19 December 2017
Doriemus Plc
("Doriemus" or the
"Company")
Operational
Update
Horse Hill-1 Oil
Discovery, Weald Basin, UK
Highlights:
-
150-day production flow-test and new
drilling programme set to commence in late winter 2017/18.
-
Programme aims to confirm
commerciality of Portland and Kimmeridge oil discoveries and
gear-up for first permanent oil production targeted for early
2019.
-
Drilling of HH-2 appraisal well as
future producer to directly follow flow testing programme.
-
Permanent production consent
application underway, submission to SCC expected in spring
2018.
-
Swift and successful eviction of protesters completed at
Horse Hill site on 02 December.
Doriemus plc (Listed in Australia ASX:DOR and listed in London
NEX:DOR) (“Doriemus” or the “Company”), announces
that it has been advised by Horse Hill Developments Ltd (“HHDL”),
the operator of the Horse Hill-1 (“HH-1”) oil discovery, in which
the Company holds a 6.5% interest, that key contracts and the
requisite funding commitments from all participants are in place to
undertake the production flow testing and drilling campaign
approved by Surrey County Council (“SCC”) in October 2017. The 2018 programme is planned to
commence directly upon the discharge of SCC’s pre-commencement
planning conditions, expected by the end of winter 2017/18.
Environment Agency approval for the full programme was granted in
September 2017.
David Lenigas, Doriemus’s Executive
Chairman, commented:
“The long-term flow testing and field
development of Horse Hill is one of the the major and most exciting
events in the Company’s history and we look forward to this big
programme commencing. The 2018 Horse Hill programme is a key step
towards delivering Doriemus’s goal of commercial production from
the Gatwick Gusher discovery and significant cash flow by early
2019.”
Horse Hill Oil Discovery:
The HH-1 Portland sandstone and Kimmeridge Limestone oil
discoveries lie within onshore Weald Basin licences PEDL137 and
PEDL246 covering an area of 55 square miles (143 km2)
north of Gatwick Airport. As previously reported on 21 March 2016, HH-1 flow tested at a significant
commercial aggregate stable dry oil rate of 1,688 barrels of oil
per day (“bopd”) from the Portland, Kimmeridge Limestone 3 (“KL3”)
and Kimmeridge Limestone 4 (“KL4”) reservoir horizons.
2018 Horse Hill Flow Test
Programme:
Following a short period of civil works to upgrade site
facilities, a 150-day production testing programme focused upon the
Portland, KL3 and KL4 reservoirs will commence. As commercially
viable initial flow rates were established by the 2016 flow tests,
the 2018 testing programme’s goal is to confirm that HH-1’s
reservoirs are each connected to a commercially viable oil volume,
thus enabling a declaration of commerciality to be made.
The Portland, KL3 and KL4 flow tests, each planned for around
30-40 days duration, will consist of a sequence of stabilised
steady state flow and shut in periods to establish the oil in place
(“OIP”) directly connected to the well. A short maximum flow-rate
test will also be included for each reservoir. If time permits, a
further short-term test of a deeper untested Kimmeridge reservoir
may be undertaken.
Testing will commence with the Portland reservoir, which in the
Company’s opinion, given the 323 bopd stable pumped rate achieved
in 2016 and the 32 million barrels most likely OIP calculated by
Xodus in 2017, is a strong candidate for commercial viability.
Subject to a successful test, a Portland commercial declaration is
expected to be made by mid-2018. A Kimmeridge commerciality
declaration would follow programme completion and analysis of
reservoir engineering data.
2018 Horse Hill Drilling
Programme:
Subject to a successful testing outcome in the Kimmeridge and
Portland, the HH-2 well is planned as a future Portland producer,
with an expected spud towards the end of Summer 2018. Drilling
plans include optionality to deepen HH-2 into the Kimmeridge to
gather core and image log data, together with a possible northwards
deviation to access the adjacent oil bearing Collendean Farm fault
block’s significant Portland OIP.
The HH-1z Kimmeridge sidetrack spud is now planned for 2019
following construction of a Kimmeridge reservoir model utilising
HH-1 Kimmeridge production data, reservoir data from the Company’s
100% owned Broadford Bridge-1 & 1z Kimmeridge discovery and any
future HH-2 Kimmeridge core.
Production Planning Application:
To achieve its goal of stable, long-term Horse Hill oil
production by Spring 2019, HHDL now plans to submit a further
production planning application to SCC in late Spring 2018. This
application will seek consent to produce oil initially from HH-1
& 1z, and HH-2, together with further production wells in a
second contingent drilling phase.
Horse Hill Eviction:
On Saturday 2 December 2017, a
42-person team, including High Court bailiffs and the UK’s
pre-eminent specialist protester removal contractor, successfully
removed around 20 activists who had illegally occupied part of the
Horse Hill site since Thursday 30 November
2017. These activists intimidated, jostled and verbally
abused HHDL’s security staff and caused criminal damage during
their illegal occupation.
An increased security presence will now remain on the site until
completion of the 2018 programme.
The operator is rigorously pursuing all available legal means to
seek recourse for this and any future events that prevent or
obstruct its right to conduct its lawful business.
About the Horse Hill licences and
Doriemius Plc’s Interest:
The Horse Hill licences PEDL137 and PEDL246 cover
143km2 in size and located to the north and adjacent to
London’s Gatwick International Airport. The Horse Hill licences are
operated by Horse Hill Developments Ltd (“HHDL”). Doriemus owns 10%
of HHDL, which in turn owns 65% of the Horse Hill licences (or a
6.5% attributable interest in the licences), which contains the
Horse Hill-1 (“HH-1”) oil discovery well.
COMPETENT PERSONS STATEMENT:
Pursuant to the requirements of the
ASX Listing Rules Chapter 5 in Australia, the technical information and
resource reporting contained in this announcement was prepared by,
or under the supervision of, Mr Gregory
Lee, who is the Technical Director of the Company. Mr Lee
has more than 30 years' diversified experience in the petroleum
industry. Mr Lee is a chartered professional Engineer (CPEng)
and a member of the society of petroleum engineers (MSPE) and has
been an independent consultant Petroleum Engineer since 1992 and
has sufficient experience in exploration for, appraisal and
development, operations of oil and gas resources.
The directors of the Company accept responsibility for the
contents of this announcement.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
CONTACTS:
For further information on this update or the Company generally,
please visit our website at
www.doriemus.co.uk or contact:
Doriemus Plc
UK Contacts:
David Lenigas (Executive
Chairman)
+44 (0) 20 7440 0640
Greg Lee (Technical
Director)
Australia Contacts:
Julia Beckett (Joint Company
Secretary)
+61
(08) 6141 3500
Email: julia.beckett@wolfstargroup.com.au
UK Advisors:
Peterhouse Corporate Finance
Limited
+44 (0) 20 7469 0930
Guy Miller
Fungai Ndoro
FORWARD LOOKING STATEMENTS AND
IMPORTANT NOTICE:
This document may contain forward looking statements that are
subject to risk factors associated with the oil and gas industry.
It is believed that the expectations reflected in these statements
are reasonable, but they may be affected by many variables which
could cause actual results or trends to differ materially.
Investors should make and rely upon
their own enquiries before deciding to acquire or deal in the
Company’s securities.
This report contains forecasts, projections and forward looking
information. Although the Company believes that its
expectations, estimates and forecast outcomes are based on
reasonable assumptions it can give no assurance that these will be
achieved. Expectations, estimates and projections and
information provided by the Company are not a guarantee of future
performance and involve unknown risks and uncertainties, many of
which are out of the Company’s control. Actual results and
developments will almost certainly differ materially from those
expressed or implied. The Company has not audited or investigated
the accuracy or completeness of the information, statements and
opinions contained in this report. To the maximum extent
permitted by applicable laws, the Company makes no representation
and can give no assurance, guarantee or warranty, express or
implied, as to, and takes no responsibility and assumes no
liability for (1) the authenticity, validity, accuracy, suitability
or completeness of, or any errors in or omission from, any
information, statement or opinion contained in this report and (2)
without prejudice to the generality of the foregoing, the
achievement or accuracy of any forecasts, projections or other
forward looking information contained or referred to in this
report.
Glossary:
| core or coring |
a drilling technique
that involves using a doughnut-shaped drilling bit to capture or
“cut” a continuous cylinder-shaped core of undamaged in-situ rock.
The core is captured in a steel pipe or “core barrel” above the
bit. Core is normally cut in 30 feet lengths, or multiples of 30
feet, and normally with a diameter of 3.5 or 4 inches. Core is
taken in petroleum reservoir rocks for detailed laboratory analyses
of petrophysical and geomechanical parameters |
| discovery |
a discovery is a
petroleum accumulation for which one or several exploratory wells
have established through testing, sampling and/or logging the
existence of a significant quantity of potentially moveable
hydrocarbons |
| extended flow test or
production test |
a flow test, or
extended well test, designed to test the longer term production
performance of a discovery with a view to declaring commercial
viability and the establishment of permanent production. |
| flow test |
a test period where
hydrocarbons are flowed to surface through a test separator. Key
measured parameters are oil and gas flow rates, downhole pressure
and surface pressure. The overall objective is to identify the
well's capacity to produce oil at a commercial flow rate and to
recover oil in commercial quantities or volumes |
| limestone |
a sedimentary rock
predominantly composed of calcite (a crystalline mineral form of
calcium carbonate) of organic, chemical or detrital origin. Minor
amounts of dolomite, chert and clay are common in limestones. Chalk
is a form of fine-grained limestone, being made of the remains of
calcareous planktonic algae called coccoliths. The Kimmeridge
Limestones are comprised of fine grained coccoliths, fine grained
calcium carbonate mud, clay minerals, together with dark grey
organic matter |
| oil in place
(OIP) |
the quantity of oil or
petroleum that is estimated to exist originally in naturally
occurring accumulations before any extraction or production |
| play |
a set of known or
postulated oil and or gas accumulations sharing similar geologic,
geographic, and temporal properties, such as source rock, migration
pathways, timing, trapping mechanism, and hydrocarbon type |
| sandstone |
a clastic sedimentary
rock whose grains are predominantly sand-sized. The term is
commonly used to describe a consolidated and cemented rock made
predominantly of quartz grains |
| sidetrack |
re-entry of a well
from the well's surface location with drilling equipment for
deviating from the existing well bore to achieve production or well
data from an alternative zone or bottom hole location |