A tiny UK oil explorer has made the bold claim that there could be up 100 billion barrels of oil lying 650ft beneath the home counties of southeast England following drilling at a well near Gatwick airport.
Shares in UK Oil & Gas Investments (UKOG), an Aim-traded oil exploration firm, jumped 220 per cent yesterday after the company estimated that the Weald Basin had total oil of 158 million barrels per square mile, far outreaching previous geological estimates funded by the British government.
The company claimed to have discovered a “world class potential resource” after drilling the deepest well into the Weald Basin in 30 years at Horse Hill, near Gatwick airport in Surrey.
David Lenigas, chairman of UKOG, extrapolated that the whole basin could contain "multiple-billion barrels" and was "turning into a potentially strategic asset for the UK".
Sceptical
However, industry analysts were sceptical about the company’s claims and how much oil could actually be recovered from the area.
They questioned the claims being made by the company, which has a market capitalisation of just over £48 million and is the latest of several small oil explorers that Mr Lenigas has been involved with.
Malcolm Graham-Wood, founding partner of Hydrocarbon Capital, an independent oil advisory company, said: “I wouldn’t as of yet get overly excited. This is at a very early stage.
“The recovery factor they are claiming is between 3 and 15 per cent, but the physical point of getting oil out of this kind of limestone is far from being proven.” – Copyright The Financial Times Limited 2015
