With all the excitement about Broadford Bridge, Horse Hill and Lidsey it's easy to forget about the undrilled Holmwood prospect in Surrey which is due to be drilled at the end of 2017. It is located immediately to the west of the Horse Hill licence PEDL137 and it is a faulted hanging wall anticline south of the northern bounding fault to the Weald Basin. The prospect has gross mean un-risked prospective resources of 5.6 million barrels of oil, as estimated in a CPR published in June 2012 with a 1 in 3 chance of success and at a cost of £3 million.
UKOG holds a 30% interest in this PEDL143 licence and it is operated by Europa Oil & Gas and it is in in an identical structural position to Horse Hill. The licence owners believe that the Kimmeridge limestone that flowed at Horse Hill is also present at Holmwood. 5 km to the north of Holmwood is the Brockham field and Angus Energy have announced that electric logs have identified the presence of Kimmeridge limestone. In addition, oil bearing limestones have been identified at the UKOG Billingshurst Broadford Bridge prospect just to the south.
The percentage interest holdings are as follows in PEDL143Holmwood:
- Europa Oil and Gas Limited (operator) 20.0%
- UK Oil & Gas Investments PLC 30.0%
- Egdon Resources UK Limited 18.4%
- Angus Energy plc 12.5%
- Warwick Energy Exploration Limited 10.0%
- Union Jack Oil plc 7.5%
- Altwood Petroleum Limited 1.6%
Holmwood is in an Area of Outstanding Natural Beauty so oil drilling in the Surrey area has been controversial to say the least. The planning process has dragged on since 2008, so it will be a full ten years in 2018 before the final drilling results are known!
An application for planning permission to drill the Holmwood prospect on PEDL143 was submitted in 2008 and was dismissed by Surrey County Council in 2011. A planning appeal in 2012 was dismissed by the Planning Inspectorate. Europa successfully challenged this decision in the High Court in 2013. In 2014 the Court of Appeal upheld the 2013 High Court judgment in the Company's favour and a second planning appeal was heard at an eight day public inquiry in April and June 2015. The Planning Inspectorate issued a decision to allow the remitted appeal on 7 August 2015.
On 23rd September an RNS was issued which confirmed that Surrey County Council's Planning & Regulatory Committee had granted permission for the underground drilling corridor for the Holmwood-1 exploration well in the PEDL143 licence.
Europa provided the following information in its Geological Proof of Evidence submitted at the Planning Inquiry in April 2015: "In the event of a successful oil discovery at Holmwood and based on the most likely resource in place then the field is projected [by Europa] to have a Present Value of around £137 million at 60 $/bbl oil price in 2015 rising to 92 $/bbl by 2018 and inflated at 2% thereafter. After taking costs and discounting into account the Net Present Value to the Government based on current taxation rates will be around £86 million with around £51 million accruing to the Licensee group. As such the Holmwood prospect is considered of material value to both the Government and the Licensee."
A positive result from UKOG's Broadford Bridge EWT will provide an indication of what might be possible from the Kimmeridge limestone at Holmwood and PEDL 143. Whilst there will be much focus on the Kimmeridge limestone EWTs at Broadford Bridge and Horse Hill and the read across for Holmwood, the Portland sandstone and the Corallian Sandstone at Holmwood alone may justify commercial development. Both the Portland Sandstone and Corallian Sandstone are present in Well Brockham-1 (although the latter was water bearing).
However, Europa undertook a CPR (Competent Person’s Report ) in May 2012 and this stated that "Kimmeridge Clay does not appear to have entered the oil window in this area. There is a risk of gas charge, as fields to the south of the Holmwood prospect are of gas, rather than oil. The pre-inversion thermal maturity of the source rocks means that old structures are more prospective, unless oil can be spilled from pre-existing structures during inversion".