A recent rally in the share price of UK Oil & Gas plc (LON:UKOG) has failed to break above 2.7p, a level the share price has failed to move above since February thus year.
The company updated the market in the form of a competent persons report in June of this year which highlighted a contingent resource of 22 million barrels of oil net to UKOG. UKOG famously discovered a significant oil field near Gatwick airport which became known as the ‘Gatwick Gusher’.
The company is in the process of testing the play for economic viability and potential production rates. In late 2017 UKOG was granted permission by Surrey County Council and the environment agency to conduct flow tests at Horsehill and construct sidetracks to HH-1.
The UKOG share price rallied sharply earlier this year after David Lenigas tweeted about the potential oil quality and the state of the well.
40 API oil at Horse Hill in the Kimmeridge limestones was a great surprise. Because that is better quality than North Sea #Brent . The better surprise was that both the Kimmeridge and Portland oil were DRY #Oil on the initial flow tests – No water! Amazing! @UKOGlistedonAIM
— David Lenigas (@DavidLenigas) 2 July 2018
However since then, the share price has languished as investors await further news on whether hard results are to follow Lenigas’s tweet.If Lenigas’s claims can be confirmed it would mean the the prospect holds oil that is lighter than both US WTI Oil and Brent.
Oil with an API gravity between 40 and 45 tends to fetch the highest prices. Brent Crude and West Texas Intermediate have an API gravity between 38-39.
UKOG’s share price was down 2% on Thursday morning at 2.4p.