Through the potential farm-out, UKOG aims to fully fund the Loxley-1 appraisal drilling and testing programme and is involved in ongoing discussions with two UK-listed energy companies, interested in pursuing the farm-out opportunity
Loxley gas project is located near the town of Horsham in Surrey, UK. (Credit: WORKSITE Ltd. on Unsplash)
UK Oil & Gas (UKOG) has teamed up with Envoi to farm out up to 50% stake in its fully owned Loxley gas and hydrogen feedstock project, located near Horsham in Surrey, UK.
Envoi is a UK-based specialist acquisition and project marketing advisor in the global oil and gas industry.
Through the potential farm-out, the company aims to fully fund the Loxley-1 appraisal drilling and testing programme with its share of costs being carried by the farminee or farminees.
In addition to Envoi, UKOG is also involved in ongoing discussions with two UK-listed energy companies, interested in pursuing the farmout opportunity.
UKOG chief executive Stephen Sanderson said: “The farm-out process is designed to fully fund the Loxley appraisal programme and, if successful, remove the requirement for the company to raise additional funds for its share of costs for this material project.”
Discovered by US-based Conoco in 1982, with the drilling of the Godley Bridge-1 (GB-1) well, Loxley is one of the largest onshore gas discoveries in the UK.
The project comprises a west-east elongate anticlinal structure, mapped as a four-way dip closure, and has planning consent to proceed ahead.
In the most recent Competent Persons Report (CPR), the project contains mid-case recoverable 2C Contingent Resources of 31 billion cubic feet net to UKOG.
In April 2019, UKOG submitted a planning application to Surrey County Council (SCC) for drilling of the Loxley-1 well, to appraise the potentially significant GB-1 Portland gas discovery.
The British oil and gas company has applied with the Environment Agency, seeking permission for the Loxley project in October 2019, which was subsequently granted.