UK Oil & Gas plc (UKOG) expects improved production rates from new power-efficient surface pumps at the Horndean oil field 10 miles north of Portsmouth in Hampshire.
LOWER COSTS
The company holds a 10% share in PL211 which is operated by IGas plc.
UKOG said its net share of oil sales revenues from the asset in 2022 totalled £287,000 with net earnings after costs of £136,000.
Chief executive Stephen Sanderson added that a new competent person’s report (CPR) demonstrated that the field continued to provide “valuable earnings” for the company.
“We concur with the operator that the new pump upgrade should improve production rates, lower operating costs and, if oil prices remain around their current levels, potentially make Horndean more profitable than in 2022.”
Installation has started of the new pumps which will also lower operating costs, potentially increasing profitability in 2023, added UKOG.
CPR
The CPR by Dallas-based DeGolyer & MacNaughton showed that, as at 31 December 2022, UKOG’s 10% share of mid-case 2P reserves in Horndean at 99,500 barrels.
UKOG’s share of mid-case 2C contingent resources estimated at 79,800 barrels, a total of 179,300 net to the company.
Total gross field production in 2022 averaged 101 barrels of oil per day “despite significant well servicing work on three of the four production wells”.
IGas expects production rates to return to around 108 barrels of oil per day (gross) in 2023 when the new pumps are online, added UKOG.