UK Oil and Gas Authority has announced that the Department of Energy & Climate Change has executed Petroleum Exploration and Development Licence 299 in respect of Block SK46c, following its award to Upland's wholly-owned subsidiary, Upland Resources (UK Onshore), and its bid partners.
Block SK46c includes the Hardstoft oil field and the Hardstoft East prospect, which were the focus of the original application by Upland UK and its bid partners.The block lies to the north west of Mansfield in the East Midlands Petroleum Province.
- Hardstoft is a low risk, low cost asset with a high percentage chance of success (80% for the contingent resources and 64% for the prospective resources).
- Upland UK is fully funded for its share of the costs of work and supported by highly experienced and strong consortium partners.
- Hardstoft was the first oil discovery in the UK, first drilled in 1919 and produced for 5 years. Upland believes that a modern high-angle well in the Hardstoft structure could access reserves over a much larger area than can have been seen by the original wells.
- Total Hardstoft resource net to Upland, based on the existing Competent Person's Report prepared for the Company, is an estimated 1.6875 MMbbl.
Upland chief executive Steve Staley said: "Upland UK and its partners are delighted to have entered into the Petroleum Exploration and Development Licence for Block SK46c.
"This is an important and very positive step for the Upland Group's ambitions to build a robust portfolio of high-impact assets - especially when considering the lowered risk characteristics of the Hardstoft asset and its low cost of development.
"Oil first flowed at Hardstoft in 1919 and continued to do so without producing any significant volume of water for five years. At that time, the technology was limited to simple vertical wells and it is likely that the wellbore produced oil only from the matrix of the Carboniferous limestone reservoir.
"The Upland Board believes that the bulk of the hydrocarbons here lie within natural, semi-vertical fractures in the limestone which would likely not have been crossed by the old wells. However, a new, semi-horizontal well should cross these fractures and allow production from them as well as the matrix in this conventional play.
"In addition, new mapping of the Hardstoft structure indicates that the old wells were probably not drilled on the crest of the structure; hence they would only have accessed part of the oil column.
"With a high degree of confidence in success and relatively low costs, this is exactly the type of good risk:reward ratio asset that the Upland Board was seeking as the first building block in a robust portfolio. We look forward to working with our partners, who bring impressive strength and experience to the team.
"The execution of PEDL299 is the end result of extensive technical work by Upland UK and its bid partners.
"In addition to PEDL299, we have not been idle with regards to our commitment to add other high impact, low-cost assets to our portfolio. We are actively assessing a number of additional attractive assets in the UK, North Africa and South-East Asia.
"We look forward to updating shareholders as opportunities develop."
At 3:22pm: (LON:UPL) Upland Resources Limited share price was +0.15p at 1.65p