Magellan Petroleum Corporation (MPET) (“Magellan” or the “Company”) today commented on certain recent announcements made by its partners in the Horse Hill-1 well (“HH-1”) in southern England.
On April 9, 2015, UK Oil & Gas Investments PLC (“UKOG”), an approximately 31% indirect owner of HH-1, announced that HH-1 is estimated to have “a total oil in place (‘OIP’) of 158 million barrels (‘MMBO’) per square mile, excluding the previously reported Upper Portland Sandstone oil discovery”. In a BBC interview on the same day, the CEO of UKOG commented that “we’re looking at between 50 and 100 billion barrels of oil in place in the ground [in southern England].”
In a separate announcement on April 15, 2015, UKOG clarified that these “OIP hydrocarbon volumes estimated should not be considered as either contingent or prospective resources or reserves” and that “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 [UKOG’s] licence areas and to prove its commerciality.”
J. Thomas Wilson, President and CEO of Magellan, commented: “We have been encouraged by the technical analysis performed on the Horse Hill prospect by UKOG and its partners. The oil and gas potential of the Weald Basin has been strengthened. However, Magellan believes that further testing of the HH-1 well is needed before we can form an opinion on the prospect’s economics. We remain bullish on the petroleum potential of central Weald Basin.”
Markwells Wood / PEDL 126 Update
On April 10, 2015, Magellan sold for nominal consideration its 40% interest in PEDL 126, the UK onshore exploration license that contains the Markwells Wood-1 wellbore (“MW-1”). By the selling the license and the wellbore, Magellan will be able to remove a $0.4 million liability from its balance sheet related to site restoration of MW-1.