Shares in UK Oil & Gas Investments (LON:UKOG) have resumed their uptrend after retracing from an all-time record close posted August 7th.
The UKOG (LON:UKOG) share price rose as much as 4.5% to 7.6p in early trade in London.
The rise comes after an operational update on the Broadford Bridge exploration well in the Weald Basin.
UKOG said a sidetrack had been drilled to support flow testing in the Kimmeridge fractured zones and significant oil traces were encountered in the section.
The results were largely positive but the company highlighted the challenges of the drilling program which requires further tests to develop the value of the discovery.
UKOG’s Chairman, Stephen Sanderson said of the latest update:
“Although BB-1 drilling and coring results were highly successful, proving our geological concept, it became clear that the duration and difficulty of coring such highly-fractured rocks in an inclined hole put the borehole in a less than optimal condition, ultimately jeopardising Kimmeridge flow-test performance. Consequently, using the drilling knowledge gained from BB-1, we have delivered BB-1z, consisting of a fresh, undamaged, 1,480 ft thick, intensely fractured Kimmeridge oil-bearing reservoir in optimal condition for flow testing.
“The sidetrack’s comprehensive image log data also presents an opportunity to unravel the extent and connectivity of natural fracturing within the Kimmeridge reservoir between BB-1 and BB-1z. This will greatly assist our understanding of flow test behaviour and the optimal placement of potential future Kimmeridge production wells at the site.”
“The sidetrack, BB-1z, is thus a solid investment in the future of the flagship Broadford Bridge discovery and the wider Kimmeridge play that underlies UKOG’s significant licence holdings.”
As UKOG has developed the South of England prospect it has attracted the interest of overseas investors. One of these is SCDM Energy, a French gas company owned by the Bouygues Brothers who now have a 5% stake in UKOG.
The stake building was met with outrage from former Chairman David Lenigas who fears overseas interests are exploiting the low valuation of shares in UKOG.
“If the Russians or the Iranians bought 5% of UKOG there would be national outcry in the U.K. So why does UK Govt allow in The French?” he tweeted.
David Lenigas owns roughly 2% of UK Oil and Gas.