Gunsynd PLC - Horse Hill Update
RNS Number : 0567V
Gunsynd PLC
18 July 2018
 

Gunsynd plc

("Gunsynd" or the "Company")

 

Portland Extended Flow Test ("EWT"): Well Clean-Up Phase Complete, Dry Oil Flows to Surface,

Horse Hill-1 Oil Discovery, PEDL137, Weald Basin, UK

 

Highlights:

 

·     Initial Portland well "clean-up" phase completed successfully

·     Light sweet crude oil (36 API) and associated solution gas flowed sustainably via pump and natural flow to surface over a 4-day period to date. Oil contains no metered water content (i.e. "dry oil")

·     Metered daily oil rates to date equal to or exceed 2016 values. Highest observed hourly rate equivalent to an implied daily rate of 352 barrels of oil per day ("bopd"). Corresponding metered solution gas volumes are up to an implied rate of 30,000 cu ft per day.

·     Flow has not yet been optimised for maximum sustainable flow rates

·     First tanker containing 214 barrels of dry oil exported to BP's Hamble oil terminal

·     Initial analysis indicates well productivity unaffected by 2 year shut-in period since 2016

·     Following a planned 24-hour shut in (i.e. pressure build-up test) the first of three planned Portland test sequences will commence

 

Gunsynd (London AIM: GUN) is pleased to announce that it has been informed by its investee company, Horse Hill Developments Ltd ("HHDL"), the operator of the Horse Hill-1 ("HH-1") Kimmeridge and Portland oil discovery that the initial well "clean-up" phase of the Portland extended well test ("EWT") programme has been completed according to plan. Over the past four days, the well has delivered a sustained dry oil and solution gas flow to surface via pump and natural flow.

 

The Company holds a 1.3% beneficial interest in licence PEDL137 containing the HH-1 oil discovery.

 

Observed metered Portland flow rates to date are broadly equivalent to, or exceed, those recorded during the short duration 2016 test. The highest recorded hourly metered rate to date, equates to an implied daily rate of 352 bopd and was achieved using a 20/64" choke, a notably more restricted setting than the 64/64" choke used in 2016. Corresponding solution gas flows have been measured up to an implied rate of 30,000 cubic feet per day. Note that, to date, flow has not yet been optimised for maximum sustainable production rates, this will follow in the subsequent test sequences.

 

Several periods of sustained natural flow (i.e. flow to surface without pumping) have also been observed over the past few days, with the most productive period producing an implied daily dry oil rate of 228 bopd over a two-hour period.

 

Initial reservoir parameter analysis indicates that the Portland is performing very well compared to the productivity measured in 2016 prior to temporarily shutting in and suspending the well.

 

To date a total of 463 barrels of light sweet 36 API crude have been recovered to surface during the clean-up period, together with all 141 barrels of completion and kill fluids (i.e. saline water) used to suspend the well after the 2016 well test.

 

Forward EWT Plans

 

The well will now be shut in for a planned 24-hour pressure build-up test. Operations will then include further flow parameter optimisation, followed by the first of three planned flow sequences designed to assess whether the Portland oil pool contains a commercially viable volume of oil. The first test sequence will likely include an optimised maximum rate test, prior to choking back the well to provide the steady state flow conditions necessary to determine the Portland oil pool's connected oil volume.  Note that in order to collect the required data during these steady state flow periods, rates will likely be below any future optimised production rates.

 

Testing of each of the Kimmeridge Limestone 4 ("KL4") and KL3 oil pools will follow completion of the Portland test sequence.

 

Extended Well Test ("EWT") Overview

  

As the 2016 short flow test campaign established commercially viable initial flow rates for each of the Portland, KL4 and KL3 zones, the 2018 EWT's prime goal is to confirm that the wellbore is connected to a commercially viable oil volume within one or more of the three zones.

 

The long-term reservoir performance data is also expected to provide the necessary data to enable, for the first time, Petroleum Resources Management System compliant Kimmeridge and Portland reserve figures to be estimated at Horse Hill.

 

Each test sequence will include a short, optimised rate test, together with a sequence of "choked back" (i.e. reduced) steady-state flow periods necessary to obtain the data required to determine the connected oil volume within each zone. A series of associated long pressure build up tests are also planned. Oil produced from the EWT will be sold on the "spot" oil market and any revenues will be utilised to offset overall testing costs.

 

Qualified Person's Statement

 

Stephen Sanderson, Executive Chairman and Chief Executive of UK Oil & Gas Investments plc, who has over 35 years of relevant experience in the oil industry, has approved the information contained in this announcement. Mr Sanderson is a Fellow of the Geological Society of London and is an active member of the American Association of Petroleum Geologists.

 

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.

 

The directors of Gunsynd accept responsibility for this announcement.

 

For further information, please contact:

 

Gunsynd plc

Hamish Harris

 

+44 20 7440 0640

Cairn Financial Advisers LLP

James Caithie / Liam Murray

 

+44 20 7213 0880

Peterhouse Corporate Finance

Lucy Williams

 

+44 20 7469 0930

 

 


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