UK Oil and Gas Investments (UKOG), the small company which last year made one of the biggest onshore oil discoveries in British history, has finally struck oil.
The company, nicknamed the “Gatwick gusher” after finding the oil close to Gatwick Airport in West Sussex, claims that it has managed to get “significant” amounts of oil to flow to the surface, under “minimal stimulation.”
UKOG says that on Monday it managed to pump the equivalent of around 463 barrels of oil per day for just over seven hours.
In April last year, UKOG revealed that it discovered about 100 billion barrels of oil near Gatwick Airport.
After much scrutiny from the markets and media over the find, independent analysis confirmed two months later that there is a whole glut of oil underneath the ground in the Horse Hill-1 oil field. However, Tuesday’s announcement marks the first time that any oil has actually been produced by the field, which was at one point tipped to garner 100 billion barrels of oil for Britain.
Speaking about the event, UKOG’s executive chairman Stephen Sanderson said:
This is a very significant event for the company and for oil and gas activity in the Weald basin of southern England. Importantly, tests so far show oil has flowed to the surface under its own pressure and has not, so far, required artificial lift.
The flow test, the first ever in the Lower Kimmeridge limestone within the Weald basin, provides proof that significant quantities of moveable oil exist within the Kimmeridge section of the well and can be brought to surface at excellent flow rates. In this case from a vertical well with minimal stimulation.
UKOG is listed on two different share indexes, first with the AIM index on the London Stock Exchange, but also on the ISDX Growth Market, a spin-off of the ICAP Securities & Derivatives Exchange (ISDX) designed for small-to-medium enterprises. It announced its second listing in October 2015, as a means of attracting more investors to the company.
Despite the discovery, and double listing, UKOG is not yet profitable. Its most recent results statement revealed that it made pre-tax net loss of £383,000 ($602,327) for the six months ending March 31. That marked an even bigger loss than the £290,000 ($456,070) it made in the same period a year earlier.