Alba to cut oil interests as losses rise

Alba Mineral Resources plc sid it planned to cut its onshore oil interests to focus on Clogau-St David’s gold mine in North Wales.

HORSE HILL

Results for year ended 30 November 2020 showed losses of £2,079,537 (2019: £1,312,40) while cash and equivalents increased to £1,512,031 (£211,333).

Alba plans to reduce its investment in Horse Hill Developments Ltd (HHDL) from £5,430,000 (2019) to £4 million following a review of operations at Horse Hill near Gatwick.

The investor has an 11.765% interest in Horse Hill and 5% in Brockham oil near Dorking.

Work continued at Clogau with underground and surface drilling, bulk sampling, evaluation of a historic rock waste dump, regional exploration and extension of exploration licences.

The company also previously announced it would form a spin-out for its Greenland graphite, ilmenite and iron ore assets.

At Horse Hill, major HHDL shareholder and operator UK Oil & Gas plc (UKOG) made various interventions to the Horse Hill-2z (HH-2z) horizontal well.

This aimed to stop the ingress of formation water which was inhibiting oil production but was not sufficiently resolved, said Alba executive chairman George Frangeskides.

“While it is disappointing that HH-2z was not successful as an oil producer, Alba’s technical team had flagged concerns from the outset as to the significant challenges that lay ahead in UKOG attempting to drill a horizontal well into this reservoir.”

He added that the failure of HH-2z had no bearing on the merits of drilling successive vertical wells into both the Portland and Kimmeridge oil pools.

An intervention to reperforate the full Portland oil-producing section for the original Horse Hill-1 well (HH-1) was completed and followed by a continuing series of production optimisation trials.

Mr Frangeskides said that the early results were encouraging, with stable water influx levels achieved by the end of 2020.

During the year, the Oil and Gas Authority approved the Horse Hill field development plan and agreed to the start of long-term production from the field.