UK Oil & Gas Investments (UKOG) recently announced that it has been awarded an onshore Isle of Wight licence from the Oil and Gas Authority (OGA). This will allow the company to start drilling for oil in the largest and second most populous island off England.
The licence was won as part of the government's 14th onshore oil licence round and includes 200sq km on the Isle. UKOG, however, said it would confirm soon on whether it has accepted the offer.
In April this year, UKOG issued a "clarification" over its estimation of potential oil discovery near Gatwick Airport, saying the amount of oil is untested. On the Isle of Wight licence, UKOG said it was an area with "undeveloped oil discovery" and had geological similarities to its Gatwick discoveries.
Stephen Sanderson, UKOG's executive chairman, said: "The licence adds significantly to the company's conventional and tight oil acreage portfolio in the UK and presents UKOG with a key combination of near-term low-risk appraisal and development balanced by high potential conventional and tight oil exploration upside."
More about the licence
The licence will give the company access to oil in Arreton, M Prospect and other undrilled prospects. The onshore Arreton is an undeveloped oil discovery. In 1976, British Gas drilled a well, referred to as the Arreton-2, which found strong oil shows in the Upper Jurassic Portland reservoir section.
The M Prospect on the other hand includes significant mapped oil in place (OIP) within the conventional Portland and Triassic sections. The licence will now allow UKOG and its partners to drill the oil from an onshore location.
In addition to these two, the licence also contains further undrilled oil prospects within limestones and shales of the Kimmeridge Clay, Oxford Clay and Lias formations. "Whilst the upside exploration potential of the M Prospect and tight oil is attractive for the future, we are also excited by the near-term cash generative potential of the Arreton appraisal project." Sanderson added.