UKOG – The magic dust fades away.

I’ve written about UKOG over the past year. So this is just a very quick update, which even if one person stops and thinks will be worthwhile.

If there is so much oil just waiting, all over the Weald to gush out of the ground, then why hasn’t the plethora of drills over the last 20-30 years found much?

The answer if we are to believe David Lenigas, is that new technology and extraction techniques now make it possible to squeeze it like a sponge and for the oil to flood out.

The new technologies that he’s talking about, are of course not particularly new as they are used elsewhere in the world, not least in the areas mentioned in the “Independent Reports” that have been commissioned by UKOG. These new technologies concern the ability to naturally frack existing fissures in the rock and lateral extensions to wells, allowing for far greater horizontal pay zone extraction.

Lateral extensions are used extensively at Wytch Farm in Dorset in similar geological formations to those targeted by UKOG. They stretch miles out to sea in an area where lateral extensions will have no impact on people’s lives. They generate on average, a few hundred barrels of oil a day per a drill.

It is important to understand that the reason that Wytch Farm is productive is that it’s a natural collection point for the oil that has migrated from the Weald i.e the movable oil.

Even if UKOG is allowed to drill large laterals under the rich homes of Southern England the output is very unlikely to meet the more movable oil found at Wytch.

The only way that UKOG will be an amazing company, is if the new technology talked about can materialise oil out of rock, Star Trek like in transporter beams…

Have a good weekend.