UK Oil and Gas Investments' share price leaps over six per cent - then falls back as firm buys further acreage in the Weald Basin

 
Caitlin Morrison
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Virgin Atlantic Plane Circles Over Gatwick Airport
The oil firm said last year it had discovered up to 100bn barrels of oil near Gatwick Airport (Source: Getty)

UK Oil & Gas Investments (Ukog) has paid £3.5m to buy another licence in the Weald Basin, near Gatwick Airport.

Shares in the company were up 6.35 per cent as trading began this morning, but have since fallen back and are currently down 1.11 per cent.

Ukog previously announced it had discovered a massive amount of oil at its Horse Hill site, also located in the Weald Basin, which became known as the "Gatwick Gusher". The group said last year there could be up to 100bn barrels of oil in the area.

The firm announced today it had reached agreements with Celtique Energie Petroleum and Magellan Petroleum to acquire 100 per cent ownership of the 300 sq km Weald Basin licence PEDL234, which more than doubles its net acreage holdings in the Kimmeridge Limestone Oil province, where Horse Hill is located.

Ukog said previous analyses at the site "strongly suggest that the licence presents look-alike Kimmeridge Limestone oil potential to that seen at Horse Hill".

"This is a transformational step for the Company and its position in the new Weald Kimmeridge Limestone oil resource play," said UKOG chairman Stephen Sanderson.

"The transaction more than doubles our net acreage position and potential recoverable resource base in the most prospective part of the play, all at a very reasonable entry price. The transaction makes UKOG the leading player and acreage holder in Kimmeridge oil and a significant player in the UK onshore oil industry."

Sanderson added that there is a potential "cherry on the cake" from the acquisition, as it brings with it "the opportunity to appraise the conventional Godley Bridge gas discovery 30 plus years after its discovery and, most importantly, at the same time to test the underlying Kimmeridge limestones".

Ukog previously extended its holdings within the Weald Basin with the purchase of a stake from Angus Energy in April.

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