Oil firm forced to backtrack over Gatwick bonanza
THE JUNIOR market regulators yesterday pushed UK Oil & Gas Investments (UKOG) to clarify its announcement last week that up to 100m barrels of oil had been discovered near Gatwick.
UKOG’s shares flew up by as much as 300 per cent last week when it announced that the results of preliminary analysis by US firm Nutech showed that there was up to 158m barrels per square mile in the Horse Hill well in the Weald Basin close to Gatwick airport. The well comprises an area of 55 square miles.
Shares in several other Aim-listed oil companies with interests in the well, including Stellar Resources and Doriemus, rocketed too, and the Weald Basin was dubbed “Britain’s answer to Dallas” by various media outlets.
City A.M. understands that the media attention around the find was part of the reason regulators asked UKOG to update the market yesterday, as well as the massive share movements seen at various firms.
Shares in UKOG plunged by 20 per cent after it said yesterday that the oil in place hydrocarbon volumes estimated “should not be considered as either contingent or prospective resources or reserves”. The share price then recovered, but closed down by almost 5.5 per cent.
The firm stated: “Further development work in the form of appraisal drilling, well testing and assessment of recovery factors will be required to seek to quantify net resources in relation to the company’s licence areas and to prove its commerciality.”