UK Oil and Gas Investments (UKOG), the company exploring oil reserves in the area of Horse Hill near Gatwick, has had its licence extended, sending shares up more than six per cent in afternoon trading.
Regulators have approved a year-long extension to licences held by Horse Hill Developments, the company in which UKOG holds a stake, giving the investment firm time to assess the amount of oil in the area, which it has previously claimed could be 100bn barrels.
The company will now have until 30 September next year to explore the Horse Hill area. It is still waiting for permission from regulators to perform flow tests which are planned for later this year in order to further gauge how much oil is held there. The license also has the potential for a production period of 19 years.
Two further licenses in which UKOG holds a stake - Markwells Wood and Baxters Copse - have also been extended by a year each, both expiring on 30 June 2016.
The Horse Hill oil discovery had been pegged at 100bn barrels, larger than oil extracted from the North Sea in the last 40 years, by UKOG's chief executive Stephen Sanderson and chairman David Lenigas. The Aim-listed company was forced to clarify these claims on two separate occasions.