The UK Oil & Gas PLC (LON: UKOG) share price edged 4.43% higher after an update about its water reinjection plant at its 85.635% owned and operated Horse Hill project. The firm revealed that it had installed three shallow groundwater monitoring boreholes at the Horse Hill-2z field.
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Investors cheered the news, which is expected to improve the oil field's net earnings by about £250,000 annually by eliminating the substantive costs of using tankers to dispose of the saline water produced at the field at distant third-party sites.
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By eliminating the use of tankers for transporting saline water, UKOG will reduce the field’s overall carbon footprint, which is good for the environment. The water reinjection will also help the company recover more oil from the field by helping maintain the reservoir pressure.
The boreholes drilled all terminate at the impermeable Weald Clay formation. Initial sampling of the boreholes did not uncover any apparent groundwater reserves below the site. The company is conducting a 3-month baseline monitoring period to ensure everything is as expected before starting the water reinjection process.
UKOG further clarified that the UK Environment Agency and the Surrey County Council had approved the installation of the three boreholes. The oil and gas company further clarified that it would conduct frequent sampling to ensure no saline water from the Portland formation penetrates the Weald Clay sediments under the site.
Stephen Sanderson, UKOG's CEO, commented: “The new boreholes are a key step towards delivering HH-2z produced water reinjection, ultimately designed to help reduce operating costs by some £250,000 per year and improve the field's oil recovery. The work is fully in keeping with current environmental standards and practices and demonstrates UKOG's responsible attitude towards ensuring the area beneath the site remains as well protected as possible.”
UKOG shares had given up all their gains at writing and traded in negative territory as sellers outnumbered buyers despite the positive update. The shares are trading up 6.18% for the year.
*This is not investment advice.
UK Oil & Gas (UKOG) share price.
The UK Oil & Gas (UKOG) share price surged 4.43% to trade at 0.0684p, from Friday’s closing price of 0.0655p.
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