A group of oil juniors are looking forward to a summer drill programme in the UK’s Weald basin, as civil works have now begun on the Horse Hill site, which is just three kilometres from Gatwick airport.
The well is planned to test a number of promising conventional oil and gas targets, and is scheduled to be completed by the end of August.
Estimates put the Horse Hill prospect’s gross prospective recoverable resources at 87mln barrels of oil.
The project is being advanced by Horse Hill Development Ltd (HHDL), which owns 65% of the project, and Magellan Petroleum (NASDAQ:MPET).
A number of AIM quoted oil juniors in turn are set to own stakes in HHDL. Farm-in agreements put in place in recent weeks will see these companies acquiring interests in the venture in return for funding the drilling of the Horse Hill well before the deadline of the PEDL137 licence.
David Lenigas-chaired UK Oil & GAS (LON:UKOG) has agreements in place to acquire 7.5% of HHDL as well as a 6% interest in Angus Energy which owns 65% of HHDL.
Solo Oil (LON:SOLO) and Welsh gold miner Stellar Resources (LON:STG), both of which are also chaired by Lenigas, also recently agreed to acquire interests in the venture. The former is to acquire 10% of HHDL, whilst the latter will have 7.5%.
Doriemus Plc (LON:DOR), which is chaired by Donald Strang, Stellar’s finance director, is set to acquire 10% of HHDL following an agreement in January.
Together Angus Energy, UKOG, Solo, Stellar and Doriemus will own 100% of the HHDL vehicle.
In UKOG’s statement on Tuesday morning, Lenigas said: "Horse Hill has significant potential to discover oil, especially after the results of Esso in the 1960's, but the company particularly excited about the potential of locating significant convention gas deeper down the Horse Hill-1 well in the Triassic."
Neil Ritson, Solo Oil’s executive director, said: "Whilst the potential of the Horse Hill prospect has been recognised for some time it is only the recent receipt of planning permission and other associated approvals that provides impetus to the project.
“The news that the site preparation is now underway is a further endorsement of the HHDL team and their ability to drill this well later in the year."