Britain Strikes Black Gold at 'Gatwick Gusher'

Oil Prices Crash After Saudis Fail To Broker Global Production Cut

Shares in UK Oil and Gas Investments soared by as much as 77pc after the Aim-listed developer announced that oil from its well near Gatwick Airport in Surrey flowed at a faster rate than expected.  UK Oil and Gas (Ukog) has claimed that oil from the so called “Gatwick gusher” at Horse Hill flowed from 900m below ground level to the surface without extra help from operators, and at a better rate than expected of 463 barrels a day. Ukog and its partners in Horse Hill have claimed that more than 9.2 billion barrels of oil lie under the 55 square kilometre licence area in the Weald Basin. –Jillian Ambrose, The Daily Telegraph, 16 February 2016

A spot in the south of England near Gatwick airport could hold a massive amount of oil even larger than that found at the North Sea oil fields. Investigations at the site in Horse Hill by UK Oil and Gas Investments (UKOG), have discovered the site could hold up to 100bn barrels of the black stuff – dwarfing the 45bn barrels produced by the North Sea in the last 40 years. –City A.M., 9 April 2015

The world’s two most powerful oil producers have reached a tentative agreement to freeze oil production at their current levels, dashing hopes of a supply cut for the world’s glutted market. Meeting in Doha, Russian, Venezuelan, Qatari and Saudi Arabian oil ministers reached a deal to not exceed production from their January levels, but only if it was followed suit by other producers such as Iran and Iraq. Forward prices for Bent crude plunged by as much as 3pc on the news to $33.68 a barrel, reversing days of gains. –Mehreen Khan, The Daily Telegraph, 16 February 2016

h/y to TheGWPF

127 thoughts on “Britain Strikes Black Gold at 'Gatwick Gusher'

    • Good to know, now leave it there, and buy the imported cheap stuff, until its no longer cheap, and you’re on a sure winner.

  1. British Eco-Freaks will start yelling any minute now… ” Put it back, put it back or we are all doooooomed ” !! LOL

    • Already happening. Of course you will find most of the protesters got to th protest site by car!!!! Oil extraction in Hampsire has been happening since the 80’s, there is even an thread here at WUWT about it.

      • Seismic data will tell you where you should drill, but it will not tell you if there is oil or gas there. Only by drilling a hole will you be absolutely sure.

      • greymouser you have obviously never drilled for natural gas based on seismic data or you would know what a “bright spot” is and would not be posting something so wrong. It doesn’t work everywhere but is pretty definitive where is does work.

      • @Steward Pid: I worked for many years in the oil and gas exploration business and from my geophysics classes I was taught that seismic data can tell you that there is a high probability that there are hydrocarbons where you are planning to drill, but you still have to drill the hole to be absolutely sure.

  2. Their previous announcement’s were widely publicised, no one at the moment is investing in the oil exploration, to the contrary many projects are mothballed, could it be that they need some more research money?

      • the article Anthony cited said it would run between $10-$30/bbl to produce, depending on how quickly the flow dropped off. It is profitable now (not including taxes, which could be as much as $20/bbl).

      • I object to this filthy black crude. Let’s do the right thing and leave it in the ground. Besides we would be hurting our peace loving middle eastern suppliers never mind hurting our Scotish/ Norwegian friend’s feelings by becoming energy independent. Let,s plant lots of beautiful wind and solar farm’s right above the Oil fields to show just how moral and green we really are. PM start writing subsidy and grant cheques immediately!!!!

  3. Great news for the UK. With fracked gas as well, this has the potential to radically alter the economic outlook for the country. One more reason to go for Brexit.

    • Also pretty amusing if Scotland goes for independence as hugely expensive to extract North Sea oil dries up and it’s cheap hydrocarbon boom time in England.

  4. Somewhere between the Mesosphere (400 miles down) and the crust there has to be a layer in which oil is continuously manufactured because it just isn’t running out. There is no peak oil. Oil is going to continue bubbling up and spewing out all over the world. Rejoice. Take advantage of it. If you’re worried about too much CO2 in the atmosphere plant more forests, grow more crops and hold your breath.

    • John G …. at least take a first year level geology course before posting something so stupid and ignorant.

      • In fact, the idea he proposes is the “abiotic” theory, and it has professional geologists that are supporters in in several countries. It isn’t the preferred or consensus view, but it does have some empirical backing and and genuine science behind. The real problem may simply be that oil may be produced by both biotic and abiotic processes. The reality may not be an either-or situation. Oil was recovered in Sweden from bores that were deliberately sited to fail all standard site selection criteria. Admittedly it wasn’t much, but the existence at all was a surpirise. The short of it is that no “first year” level geology course would address a non-census theory like abiotic oil, any more than a first year “environment” course would address sceptical views of global warming seriously.

      • Geology is not needed. Advanced thermodynamics, especially a knowledge of chemical potential, is what is needed.

      • DUSTER:
        “Oil was recovered in Sweden from bores that were deliberately sited to fail all standard site selection criteria. Admittedly it wasn’t much, but the existence at all was a surpirise.”
        Paper Please.

    • I did like the “hold your breath” idea to reduce CO2; since CAGW guys claim to believe this stuff, they ought to lead by example.
      yea, yea; attempted sarc

  5. The Saudi Russian Venezuela freeze is a freeze at record high production rates… thus the price drop on the news.
    We are not at peak oil and have decades of the stuff. Offshore Brazil is already huge and barely explored so far.

  6. How hard would it have been for the Telegraph article writer to look up the Kimmeridgian Age (152.1–157.3 Ma) of the Late Jurassic Epoch, rather than just checking when the whole Jurassic Period began? I mean, the entire ICS age or stage, penultimate of the Jurassic, takes its name from this formation.
    During this age in Germany lived the famous feathered, maniraptoran dinosaur Archaeopteryx, related to birds.

  7. That the North Sea oil fields are running dry while the Weald Basin is just getting started is another reason why socialist Scotland might want to stay in the UK rather than going independent.

  8. This has to be a knife in the back to all those Greenies. Every global warming rally or protest gets snowed or frozen out, fixing the temperature data hasn’t worked out too well (thanks to Anthony et al), the climate models are a joke, most of the global population has lost interest .. and now billions of barrels of oil in England of all places!!
    The Greenies remind me of the little boy trying to plug leaks in the dike. Stick your finger in one and another two pop up. It will be interesting how they attack this. I’m sure the fracking/pipeline/pollution hysteria will commence shortly.

    • If global temperatures start to decline over the next 5 – 10 years as several of the real climatologist pundits are predicting, I further predict the greens are going to vanish in the stampede.

    • wow… you must be older than me. I remember paying $0.17 a gallon – and only buying a quarter’s worth. (I just had to get from my girlfriend’s house and back.) Most of my young friends assume I’m exaggerating. They blow me off.

    • Per the article, only 3 to 15% of that 100B BBL is recoverable. Historically, future yield estimates from oilfield producers have been overestimated in many basins. At 3% the oil could cover current UK consumption for a bit over six years.
      Note also that to recover the marginal BBL the EROEI becomes very close to unity (more than 60:1 in the 50’s, less than 10:1 now and closer to 3:1 for shale plays).
      One might also point out that:
      Waiting until world oil production peaks before taking crash program action leaves the world with a significant liquid fuel deficit for more than two decades.
      As per abiotic, as I understand it, abiotic generation produces methane, not crude and and the amounts are quite small relative to what’s being extracted daily.

  9. The little fact-file caption indicatives 1bbl = 35 gal. I wonder if the 1 bbl = 42 gal conversion factor I have been using for the past 30 years is wrong?

    • Sorry, forgot this part –
      ” An oil barrel (abbreviated as bbl) is a unit of volume whose definition has not been universally standardized. In the United States, an oil barrel is defined as 42 US gallons, which is about 159 litres[10] or 35 imperial gallons”

    • There is no doubt that the UK has several attractive source rock (shale) basins to be horizontally drilled and fracked.
      As a rule of thumb from US basin experience (Williston, Permian, Barnett, Niobrara) and Russia’s Bahzenov shale, for oil (not gas), only 1/4 of the basin geology will be commercially productive with oil at $100/bbl. And oil (not gas) recovery factors will be less than 5% of estimated OIP in that 1/4 of the geology.
      For natural gas, the numbers are much more favorable. In the Marcellus, for example, it looks like about 2/3 rather than 1/4 of the basin is commercially productive even with the low US gas price the glut has caused. And recovery factors are running 11-12% with some sweetspots hitting 15%. The UK will desperately need CCGT fast and in quantity as its disastrous electricity policies hit home. So the gas numbers are a UK blessing if it would just get fracking.

  10. Mr Lenigas serves lunch …

    The impact is going to be felt by every man, woman, and child in this green and pleasant land. Including the greenies who use oil products in their daily lives without knowing it. This is the UK’s opportunity to secure its energy supplies, becoming self sufficient, and unshackling itself from reliance on Russia, Middle East and elsewhere. Terrifying that Europe is now paying €1 billion a day to Russia for energy imports.

  11. The 100Bbbl was an unjustified extrapolation that the Weald Basin Kimmeridge is like Horsehead, the geological sweetspot. Which is why that location was chosen for the discovery well. If Weald is like the Bakken in the Williston basin, then half won’t contain sufficient TOC to form recoverable oil, and half the remainder wont comtain cemmercially recoverable oil at $100/bbl. so divide by at least 4 for OIP.
    Then the recovery factor needs to be estimated from cores and the behavior of this well over time. Note the flow rate has already dropped from 700 bbl/day to ~450. That indicates low porosity, low permeability, or both in this clay formation. Best is sandstone reservoir. Next best is fossiliferous limestone reservoir. This is a clay based shaley source rock. The recovery factor for Bakken is 1.5% after fracking. The recovery factor for the ‘best’ shale (Eagle Ford) is 3%. MSM doesn’t bother to understand geophysics, and a small exploration company like has every incentive to see yue discovery through rose tinted glasses.
    The comparison to the North Sea is just absurd. For example, the UK’s Brent field alone (sourced from the same Kimmeridge Clay source rock) has by itself produced 2Bbbl of crude since 1976, with an estimated recovery factor of about 50%. Brent was reworked in the 1990s at a cost of $1.5 billion to produce mostly natural gas, is now exhausted and being decommisioned by Shell. To date cumulative North Sea production is about 40Bbbl from conventional reservoirs. The Weald will never reach that. Too small geographically, too low a recovery factor.

    • The population density of England is about 100 times greater than S Dakota, I don’t know where you got your idea from! The population of the UK is about 65 million compared with the US 320 million and the US has a much bigger area 3 million sq miles vs. 94,000 sq miles for the UK.

    • 1.5% recovery is based on old data. They are now doing 50 stage fracs and well spacing has dramatically decreased.

      • James D, so what is the Bakken recovery factor after all that technology you cite? Include refracs. Uhh… NorthDakota has data since they tax extraction. So does Oil and Gas Journal, an industry trade rag. Why rely on one source when there are several?
        Did you know that multistage fracs are mostly related to the longer lengths of the laterals? Something about hydraulic pumping power…Uhhh. You want to argue, at least show up with oil field data rather than warmunist faith based evident ignorance.
        Yes, that is deliberately insulting. Please study geophysics more, and comment less ignorantly after.

      • Yes indeed. Conventional (lol) oil has much greater oil density than shale. Frack a conventional deposit and who knows what recovery factors can be achieved. Ad in multilevel and multi-directional wells, the skys the limit.

  12. Irony seems to have more than a whimsical dimension. Like the Al Gore effect: wherever he goes it snows, the loud unremitting assault on fossil fuels seems to have destroyed peak oil and and brought forth an enormously larger, more commonplace resource than was imagined. Some huge coal seams will be next on the discovery ledger. Offshore oil around the Maldives will be next to put an equivocal quaver into the islands’ strident anti-CO2 chorus. And ya know, when something like the Gatwick discovery comes along, it will be so irresistible to a government which has been casting about to rescue itself from the disastrous idiocy of its energy and enviromental policies that it will just ignore the greens and even their own family members whose renewable investments will be going down the tubes. Even I, when I hear that the planet is being killed off by eating meat, find an almost uncontrollable urge to throw a steak on the barbecue and pop the top off a gassy bottle of Rickard’s Red.

  13. …at a better rate than expected of 463 barrels a day
    Let me see. You are probably looking at a depletion rate of 65% or so and the well is producing $15K of oil per day on its best day. Out of that cash you are looking at royalty payments of say 20%, which brings down the take for the company to around $12K. But in a week you could be looking at $9K per day and a week after that $7K per day. And so on and so on. In the meantime you have to pay for the acquisition cost and the development costs. You have to pay the employees who help you get the oil out of the ground. And most of all, you have to pay the lenders their 8% or so for the money they gave you to pay for the drilling costs. To get 500,000 barrels of production per day you will need to get up to around 1,500 wells or more depending on the drill rates and those 1,500 wells will probably cost you close to a billion dollars, perhaps more.
    Note that my back-of-the-envelope calculation depends on an assumption that the company managed to produce an average well in the formation. But that is very unlikely to be true because if the American producers are a guide, the company hit the sweet spot in the core area of the shale formation first. What the company has going for it is the low population density of England, which is not as crowded as South Dakota or Texas. As such, the drilling will not be all that visible and interrupt daily life in England and the company can be sure to operate free of pressures and scrutiny so that it can concentrate on making its shareholders as rich as the shareholders of Chesapeake, the pioneer in the shale space in the US.

  14. Stewart Pid, 10:14
    If you had gone to school in Russia, you would understand the abiotic discussion.
    Russia has been very successful with Mendeleev’s theory, including producing
    natural gas from 40,000 ft deep wells. I believe that this fact supports Mendeleev.

    • Nope. The oil and gas well you refer to is the Odoptu OP11 in the north Sakhalin basin. Deepest oil/ gas well on Earth. Exxon/Neftgas JV. According USGS 2011, the source rock for this basin is an Upper Oligocene to lower Miocene diatomaceous mudstone. A quite conventional marine sediment. Nothing abiotic about it at all. Abiotic natural gas (methane) does exist, but not in commercial quanties. Only major ‘deposit’ is methane hydrate on the floor of the Framm Strait. Abiotic petroleum is bunkum. The supposed Ukraine discovery was only bad geology.

  15. Crikey, there’s a helluva lot of conjecture in this blog based one drillhole … one cannot help but be humbled by such certitude.

  16. I don’t understand the controversy about the possibility of abiotic oil. After all , the organic chemicals in outer space also of biotic origin, starting with alcohol and methane?

    • I don’t understand the controversy about the possibility of abiotic oil. Or are all the organic chemicals in outer space also of biotic origin, starting with alcohol and methane?

      • Ristvan did not say there was no abiotic hydrocarbons. Titan’s methane is insignificant. The methane detected on all the other moons/planets you refer to are also insignificant. They are trace molecules. Ignore the hydrocarbon oceans, and the methane-ethane clouds in the atmosphere. Ristvan will assure you they are actually insignificant.
        You and I just find that hard to believe.

    • RO, a great question. But you overlook rocky planet v. Gas planet formation processes. And also the iron oxidation period of earth’s biosphere, long before multicellular organisms evolved (so far as we know). Just geology. Also all known petroleum geophysics. So, get a grip?

  17. Another important detail – the referenced 9.2 Billion barrels is OOIP, not recoverable oil.
    See link:
    Recovery factor likely to be in the 6-9% range, based on other unconventional plays. See
    which would put recoverable oil in the 550-830 MMBO range.
    That’s a nice discovery, but hardly a world changer. Recoverable resources of this size are still commonly found around the world. And just to put it in perspective, we are burning ~34,000 MMBO per year world wide, so this about (700/34,000) = ~ 2% annual replacement. Great for this little company if it all works out, inconsequential to the world oil markets.

    • But this may be important to DOMESTIC energy supply. How different would the world be if we changed the geopolitics of energy through domestic self-sufficiency?

      • R2Dtoo

        But this may be important to DOMESTIC energy supply. How different would the world be if we changed the geopolitics of energy through domestic self-sufficiency?

        No “government-favored, government-flavored “renewable” scheme can create energy self-sufficiency. Other than locally produced fossil fuels and nuclear, combined with the hydro power already near-maximum. There are too many million acres too far north, too cloudy, too storm-swept for solar to provide much more than now generated – and those sources are very ineffective anyway, since the sun is capable of producing meaningful power only 6 hours per day. Wind? Fully half the country is blocked by the Bermuda high and local wind patterns. More than 5-8% cannot be produced. And that level will break (is already breaking!) conventional machines by forcing them through startup/shutdown cycles two and four times daily.

      • I suppose from an energy security standpoint in might be comforting but from an energy price standpoint, it is irrelevant as oil is an internationally traded commodity – push here, pull there, … the price all equals out according to worldwide supply & demand , other than minor government driven or supply chain dislocations. Disagree ? Check out world wide prices for benchmark crudes – not much difference is there ?

    • You should probably read a bit more before making statements like this.
      See link from UKOG website :
      Quote from that :
      “Nutech considers that the Kimmeridge limestones are analogous to the oil productive Austin Chalk and Eagle Ford formations of the US.”
      “These US analogues have estimated recovery factors of between 3% and 8% and in a few cases up to 15% of contacted Oil in Place per well.. These recovery factors are achieved with the use of well stimulation techniques. ”
      This is absolutely unconventional & the analogs I site above are also sited by the operator

  18. I’ve drilled and fracced many shale oil reservoirs in Canada. None produced at that rate on test from a vertical well bore with minimal conventional completion (simple perfs and/or chemical wash). They didn’t describe what type of completion they used. If this well wasn’t fracced, at that depth vertical development would probably be by far the most econonomical. If it was fracced, that is a whole different kettle of fish. Either way it is a good sign to flow at that rate through a vertical well. By the way, recovery factors in the Williston basin in Saskatchewan Bakken are being assigned 15% recovery factors by the third party reserve evaluators for public and private companies and their lenders. Additionally, recovery factors in a pool or basin are also influenced by the well density of the development program.

  19. All I know 900 meter is a shallow well, the Bakken oil runs from from 2500 meter to 4300 meters down with the Three Forks further down, with on more shale formation below that, in North Dakota you need to drill the first 461 meters with fresh water and then case that first drill before going deeper, only after you have that first drilling cased can you use conventional drilling fluids. Those rules are in place to protect the fresh water deposits that generally lays above 461 meters. To think that the oil they just found is so shallow and yet no one has tapped it, it simple amazing. Considering fracking is over one hundred and fitly years old and hydraulic fracking is over sixty years old it is a wonder that is was not “found” earlier.

  20. Jeff what part of ” “Importantly, tests so far show oil has flowed to the surface under its own pressure and has not, so far, required artificial lift.
    “The flow test, the first ever in the Lower Kimmeridge limestone within the Weald basin, provides proof that significant quantities of moveable oil exist within the Kimmeridge section of the well and can be brought to surface at excellent flow rates.” ” do you not understand?\
    And thats not the point. its that technology will be used where it works and maximises output from any field under the prevailing economic condition. it does not follow “you cannot do that”

    • How is anything in your quote above in conflict with anything I stated above? Why do you think I don’t understand this quote? What point are you even trying to make? Just because it is unconventional doesn’t mean the flow rates can’t be great. And just because flow rates are great, means nothing about recoverable reserves. The operator has clearly stated this is an unconventional resource and there is nothing in the test results to suggest otherwise.

  21. Why are you nit picking? How can you say they are the same, then admit they are different. whilst at the same time your contradictions have nothing to do with the point that I am making.
    Bafflled, you bet

  22. When you consider the amount of costly hardware that’s gone into North Sea production when there was easily accessible oil under our feet all the time, you realise that science is a very fallible process that can make extremely costly mistakes. The lesson from this should perhaps not be lost on those who believe the climate alarmists without question.

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