UKOG Horse Hill tight oil discovery to be drilled not fracked

By Josie Shillito
Published: Thursday, 09 April 2015

The identification of 158m barrels of oil per square mile in the south of the UK has raised eyebrows with the announcement that despite being a shale oil resrve, the discoverers UKOG believe it can be extracted using conventional drilling muds, rather than by fracking.

The discovery of an estimated 8.6bn barrels of oil reserves in the southern UK county of Sussex could spell fresh demand for mineral-based drilling muds.

UK Oil & Gas Investments (UKOG) revealed today that estimates for its Horse Hill well in the Weald Basin in Sussex has total oil in place amounting to 158m barrels per square mile, over an area of 55 square miles (142.5km2).

Even though the oil identified is tight oil contained in shale rock, UKOG says that the reserves will be recovered using conventional drilling techniques using muds and not hydraulic fracturing (fracking) with frac sand or ceramic or resin-coated proppants, explained a UKOG spokesperson.

This is because the rock is already naturally fractured, the company explained.

As is typically the case with shale oil, approximately 3-15% of the reserves are recoverable, or 258m–1.29bn barrels of oil, according to the company's press release.

Mud used in oilwell drilling typically contains barite (barytes), calcium carbonate, bentonite, graphite, ilmenite and mica. Completion fluids using bromine chemicals are also commonly employed.

During the drilling process, the mud is circulated to cool the drill bit, convey rock chippings to the surface and to seal permeable layers and fractures.

World barite production is very closely correlated to the total world rig count (see graph). The 8.6bn barrel total at Horse Hill is over half of the total number of barrels of oil in reserves in the whole of Brazil (14bn barrels).

Over the past two years, barite prices have moved up from $145-160/tonne to $157-172/tonne for Moroccan (OCMA/API, bulk) SG 4.2 material on a C&F North Sea basis, according to IM Prices Database. Indian and Chinese barite prices have also risen, although these are marginally cheaper than material sourced from Morocco.

The Horse Hill asset will have further results shortly, according to the press statement published today.

An estimate of total oil in place in the licence will be given following ongoing analysis of the asset by US petrophysical intelligence outfit, Nutech.

"These initial results suggest a very large volume of oil in place, which could potentially help  to stem the rise in oil imports and improve Britain’s energy security and balance of payments.  Further appraisal work will be needed to test what could be economically and technically recoverable," said Ken Cronin, the chief executive of United Kingdom Onshore Oil and Gas (UKOOG).  

Graph: World barite production compared with world oil and gas rig count 1975-2013

World barite production compared with world oil_gas rig count 

For more information on drilling-grade barite, contact IM Research, which has recently published an in-depth report on this mineral and its use in conventional and unconventional drilling worldwide. The above graph has been taken from the Drilling-Grade Barite research report.



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