UK Oil & Gas Investments says the well has produced 463 barrels a day under its own pressure

Oil flowing easily from a well near Gatwick airport proves large quantities can be brought to the surface, bringing the prospect of an oil bonanza in Sussex closer, the company responsible for the site has said.

Shares in UK Oil & Gas Investments jumped more than 40% after it said oil had flowed to the surface under its own pressure at a rate of 463 barrels a day at Horse Hill in Sussex’s Weald Basin. UKOG owns just over 20% of the licence for the HH-1 well.

The site has been the subject of fevered speculation since 2014, when test results showed that a well could contain millions of barrels of oil. UKOG sent spirits racing last April when it said there could be 100bn barrels of oil at the site in woodland near the border with Surrey – dubbed the “Gatwick Gusher”. It predicted that up to 15% of the oil could be reached.

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However, there have been persistent doubts about claims made for Horse Hill’s potential. A week after the announcement, the stock exchange made UKOG clarify that the oil in place should not be treated as a contingent or prospective resource or preserve.

Stephen Sanderson, UKOG’s executive chairman, said on Tuesday: “This is a very significant event for the company and for oil and gas activity in the Weald Basin of southern England. 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.”



UKOG has faced criticism from environmental groups, which argue that it can only get to the oil using the fracking technique. Other analysts have cast doubt on whether the oil at Horse Hill can be economically viable.



The company’s latest announcement suggested that the Gatwick Gusher might turn the area into a mini-Dallas without using fracking after all.



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Sanderson said: “Tests so far show oil has flowed to the surface under its own pressure and has not, so far, required artificial lift. While these flow rates are significant and in excess of management’s expectations, it should be borne in mind that the planned future use of a horizontal well and appropriate conventional reservoir stimulation techniques could likely increase flow rates even further.”

Sanderson took over last July from David Lenigas, an Australian entrepreneur with various interests in the oil industry. Lenigas was in charge when the stock exchange ordered UKOG to clarify its claims about Horse Hill’s potential.

In late morning trading, UKOG shares were up 33% to 1.9p. The shares, which trade on London’s Aim market, peaked at 3p last June.

