LONDON, UK: Pennpetro Energy PLC (LSE: PPP), an independent oil and gas company focusing on production and development in Gonzales County, Texas, USA, has signed a binding term sheet with UKOG (137/246) Ltd and Horse Hill Developments Ltd (HHDL), both subsidiaries of UK Oil & Gas plc (collectively UKOG) to farm-in and drill the next infill oil production well at the Horse Hill Oil Field, located about 2 km north of Gatwick airport.
The agreement covers Horse Hill and its surrounding PEDL137 and PEDL246 licences covering an aggregate area of 142.9 km².
The agreement’s binding farm-in terms, which are subject to certain conditions as outlined below, cover the drilling of a new crestal infill well, designated Horse Hill-3 (“HH-3”), to be spudded after the completion of a Pennpetro funded high-definition 3D seismic survey.
On completion of HH-3, Pennpetro Energy will receive a 49% share of all production derived from Horse Hill-3 and future wells plus a 49% interest in the Licences. UKOG’s subsidiaries will retain their current interests in all oil production from Horse Hill-1 (“HH-1”) and HHDL will remain as the named Licence operator.
Tom Evans, Pennpetro Energy CEO, commented: “We see an excellent opportunity here for Pennpetro to participate in the next phase of developing the Horse Hill Oil Field. We look forward to moving ahead with the planned high-resolution 3D seismic survey as soon as practicable and then moving forwards to the next production well at Horse Hill.”