The Gatwick Gusher

Rumours are circulating that a hundred billion barrels of oil has just been discovered at Gatwick airport. I first came across this story at WUWT who tipped their hat to the GWPF. To place this in context, the UK North Sea has produced around 28 billion barrels of oil since production began in 1975. How could we Brits be so dumb as to miss 100 billion barrels just waiting to be pumped from under the home counties?

The well that has caused so much interest is called Horse Hill 1 (HH1) located to the south of London near Gatwick airport on a geological structure called the Weald Basin. This area is already home to a number of small oil fields (Figure 1). HH1 made an oil discovery that flowed at 456 barrels per day from a Kimmeridge age limestone (See Figures 1 and 2). This is very decent for an onshore well these days but at this rate it would take 219 million days to produce that rumoured 100 billion barrels, i.e. 600,817 years. Alternatively, 1000 wells producing at this rate would produce the oil in just 601 years. That’s still a long time for investors to wait for their returns. How do we bridge this gap between 100 billion barrels of oil in the ground and a flow rate of 456 barrels per day?

Figure 1 Surface geology of the Weald Basin [1]. HH is not on the map but lies just to the east of Brockham.

This is how The Telegraph reported the news:

The well flowed for more than seven hours yesterday (Monday) and further flow tests will be carried out today.

UKOG and its partners in Horse Hill have claimed that more than 9.2 billion barrels of oil lie under the 55 square kilometre licence area in the Weald Basin.
However, some experts have questioned how much of this oil will be recoverable and the viability of large scale drilling ever taking place in the area.

  • Horse Hill gusher is a test case for new onshore oil regulator
  • Gatwick oil gusher claims ‘wildly optimistic’ warns expert

Protesters flocked to the Surrey site over the weekend to oppose the controversial use of hydraulic fracturing in the area, but the operators say they have no plans to use fracking to produce the oil.

This is how The Telegraph reported on the story last April,

UKOG has been accused of exaggerating the potential of Horse Hill after it said earlier this month that the area within its licence could contain “a total oil in place of 158m barrels per square mile”.

Subsequent statements by the chief executive Stephen Sanderson and the chairman Mr Lenigas claimed that the field held up to 100bn barrels of crude and was “very significant” for the UK.

To understand the reality it is necessary to begin with an explanation and an understanding of the differences between resources and reserves and the difference between conventional oil and light tight oil (LTO, or shale oil). And before doing that a simple explanation of the geology also helps.

Figure 2 The stratigraphy of the Weald Basin [1].

Figure 2 shows the stratigraphy of the Weald basin according to The British Geological Survey and DECC [1]. Stratigraphy is the study of the layering and depositional history of sedimentary rocks. To the left is chronostratigraphy that is a measure of age. The foot of the Rhaetian is about 209 million years old while the top of the Valanginian is about 134 million years old. Hence the rocks in the Weald were deposited over a 75 million year period.

To the right is the lithostratigraphy which is a description of the sedimentary rocks being laid down sequentially. Note how the lithostratigrpaphy switches between limestone and mudtsone with only occasional sandstone beds in the sequence.

The surface geology and locations of existing, small, oil fields are shown in Figure 1. HH is not on the map but lies just to the east of Brockham.

The most important unit in the section is the Kimmeridge Clay Formation that is an organic rich black shale with over 20% organic matter [1]. This formation occurs throughout southern England and below the North Sea where it is the source rock for most of the oil and much of the gas. The BGS note, however, that in the Weald basin, there are 5 organic rich shale units that may all be targets for shale oil drilling.

In the recent past, the Weald basin was more deeply buried than at present, sufficiently deep and hot to generate oil in the organic shales. The area has since been buckled and uplifted by tectonic forces that have their origins in Alpine tectonics. Hence, many of the oil fields in the area occur at much shallower depths than would normally be expected.

Conventional versus shale oil

In conventional oil fields the oil migrates out of the organic rich source rock and accumulates in a reservoir that is normally a porous limestone or sandstone that is located below an impermeable seal. The buoyancy of oil on water is the force that drives the migration and trapping of conventional oil. In a conventional oil field, the oil will normally flow to surface un-aided owing to its buoyancy.

Shale oil (LTO) developments are targeting the oil left behind in the source rock which in normal circumstances is most of the oil that was generated. This oil has not escaped the shale by natural processes and will not flow into a well unaided. It needs help by means of fracking. Fracking creates a myriad network of tiny fractures in the well that are pumped full of sand and this enables some of the oil to flow from the shale into the well.

Resources versus reserves

In simple terms, oil resources represent the amount of oil that a company or government believe may exist. Oil reserves are the portion of that resource that may be produced commercially using existing technology.

In a conventional oil field, the geologists and reservoir engineers work out the size of the trap (the field) and how much oil it contains. They then make educated assumptions about how much of that oil may be recoverable and further assumptions about how much more oil may be found. The recoverable oil provides the reserve figure while the total amount of oil believed to exist in the company’s area  provides the resource figure. All of these figures are constrained by measurements made on the size and porosity of the oil trap.

With shale oil, there is no trap, just a very large volume of shale that contains relatively small amounts of oil per unit volume. The conventional methodology of applying resources and reserves breaks down since there is no finite trap to measure. But companies apply the conventional methodology none-the-less and may, as we will see in the case of Horse Hill, come up with some very big numbers that are all but meaningless. Horse Hill actually provides a good test case to explain how this works.

Horse Hill

The Horse Hill exploration license is owned by Horse Hill Developments Ltd, a consortium of investment vehicles and their website is not at all instructive. But roughly 20% of the license is owned by a listed company called UK Oil and Gas (UKOG) [2] and they are bound by stock market rules to report information that is compliant with international standards. UKOG, keen to see their share price rise, actually report a lot more information than required making their website a data mine or should I say data mine field? The challenge is distilling the facts.

Let me begin by looking at the data from the HH1 well. We know that under an extended well test dry oil was produced at a rate of 456 barrels per day from a single zone – a lower Kimmeridge limestone. Other zones remain to be tested and so there is still upside from this single well.

The oil is light (40˚API gravity) sweet (i.e. low sulphur) crude that is prized most by the industry. To be clear, UKOG and partners have made a conventional oil discovery.

The next question normally asked is how much oil is there? Schlumberger produced the resource estimate shown in Figure 3 prior to the well test being made with a total figure of 271 million barrels oil in place per square mile. At first glance this looks like a huge field. A quarter billion barrels onshore UK would be massive. But then scratching the surface we find that this is not an estimate for the conventional oil discovery but more an estimate of the shale oil “resource” per square mile of the license block area.

In this video issued by the Daily Mail, David Lenigas the Chairman of UKOG mentions that conventional oil estimates in the Portland Sandstone ranges from 3 to 16 million barrels. He also mentions that it was a surprise to find oil in the Kimmeridge limestone but I have failed to find any indication of how large the Kimmeridge accumulation actually is. It is likely that UKOG don’t actually know yet.

Figure 3 Schlumberger’s estimate for LTO resources at HH [2].

UKOG seem content to see conventional oil reserves and unconventional resources conflated. They have in fact done a lot of work estimating the latter (Figures 4 and 5).

Figure 4 UKOG’s estimate for shale oil resources in the whole of their license area [2].

Figure 4 explains that the HH license covers 55 square miles. Hence simply taking the 271 million barrels per square mile from Figure 3 and multiplying that by 55 we get 14.9 billion barrels of oil in place. Figure 4 claims a mere 9.25 billion barrels. Presumably the strata thickness and oil richness declines away from the HH 1 well location.

Figure 5 UKOG’s claim of 1 billion barrels in the Kimmerdige Limestones which once again we must presume is LTO resource and not conventional oil.

Figure 5 focusses on the limestones like the one recently flow tested at HH 1. A claim is made for 1 billion barrels oil in place, but again it is not made clear if this is conventional oil that would flow to surface unaided or light tight oil that requires fracking. It is almost certainly the latter.

Concluding thoughts

To sum up. HH 1 has made a nice conventional oil discovery, we don’t know how large it is but it is likely to be closer to 10 – 100 million than 100 billion barrels.

The 55 square mile HH license block may contain 9 billion barrels of LTO disseminated throughout the rock volume that may only be produced by fracking. It has yet to be proven that any of that oil may be produced. Without a positive fracking test, we still have no idea what % of the oil in place may be recovered. And none of this is likely to be commercially viable at current oil prices.

The BGS / DECC report [1] also provides an estimate for the oil in place for the whole of the Weald Basin (Figure 1) with a range from 2.2 to 8.6 billion barrels and a most likely estimate of 4.4 billion. This estimate for the whole of the Weald basin is seriously at odds with the UKOG estimate of 9.2 billion barrels for their relatively tiny license area. Either UKOG and their contractors or the BGS and DECC have not done their sums properly.

It should be clear that the authorities who regulate financial statements from the oil industry in the UK and globally need to provide clear guidance on how LTO resources are reported, especially in circumstances where conventional oil and LTO may occur together as is the case in the Weald basin.

[1] The Jurassic shales of the Weald Basin: geology and shale oil and shale gas resource estimation (LARGE pdf)

[2] UKOG


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14 Responses to The Gatwick Gusher

  1. Peter Lang says:

    Euan Mearns,

    Thank you for the sanity and reality check. An excellent, clear explanation.

  2. jim brough says:

    If the resource is there, tap it with care and not the spendrift way UK did with its North Sea gas.

    I have a copy of the Second Report to the Club of Rome which in 1972 started the cult of modelling the future by computer simulations. Predicted the exhaustion of resources such as oil, gas and minerals. The only prediction it got right was world population.

    It was not happy with nuclear energy and called it a Faustian bargain whereby mere mortals surrender their souls to the Devil.
    That was a long time ago but the idea persists to encourage our fear of nuclear energy.

    I spent years working at the nuclear establishment at Lucas Heights where workers had a better than average health record in spite of the fact that they had handled and lived with waste since the reactor started to produce medical radioisotopes in 1960.


    • @ Jim

      I am not fan of Thatcher but it was here drive and North Sea gas that allowed her to drop the basic rate of tax from 31p to 25p and then to 21p. Similar events in Norway did not where the government decided to set up a savings account that they controlled.

      Both are valid ways depending on your outlook.

  3. willem post says:

    “The only prediction it got right was world population.”

    And nothing is being done about it, other than the Pope saying contraceptives are OK, but only in case of a major, widespread viral disease. How dogmatic can one be?

    Below is a summary with three growthrates: world population at 0.75%/y, gross word product at 3%/y, and world energy consumption at 1%/y.

    The numbers for gross world product become very large; such growth likely would be unsustainable.


    Below is a table of world population, gross world product, GWP, and world energy consumption, WEC, for various years. Any GW mitigation efforts would have to be sufficiently overarching to not only offset the GW effects of the growth factors in the table, but must simultaneously transform the entire world economy away from fossil fuels!!

    The slow growing regions (Europe, US, Japan, etc.), with low percentages for population growth, gross product growth, and energy growth, would find it easier to make the transition away from fossil fuels, than the regions with higher growth percentages.



    Population, billions………………1.2……….7.0……..5.8………….9.4……..7.8………1.35
    WEC, billion GJ…………………23……….540……..23.5………804.6………35………1.49
    WEC/capita, GJ…………………19.2………77.5…….4.0………..85.6………..4.5……1.10
    Biofuel/capita, GJ………………18………….6.5……………………..6.5
    Other/capita, GJ………………….1.2……..71.0……………………79.1
    GWP, $billion in 1990$…….175.24….41090…….234…..134036……..765………3.26
    GWP/capita, in 1990$……..175.24……5895………40…….14259……….98………2.42
    Goods/capita, % of GWP……90…………..50………………………30
    Services/capita, $ of GWP….10…………..50………………………70

    – Assumed world population growthrate is 0.75%/y for 2010 to 2050; growth factor 1.35
    – Assumed WEC growthrate is 1%/y for 2010 to 2050; growth factor 1.49
    – Assumed GWP growthrate is 3%/y for 2010 to 2050; growth factor 3.26
    – Assumed world biofuel energy increases 9.4/7.0 = 35% for 2010 to 2050
    – Assumed the goods/services ratios as shown in the table.

    • Pyrrhus says:

      The major factor in the rapidly exploding world population is the third world, especially Africa. In those areas, few are interested in limiting family size, nor can they afford contraception. What will limit their population eventually is food and water. Currently hardly any of these countries can feed themselves, and they are reliant on imported food, medicine, etc from the west. When that starts to run into Malthusian limits, things will get interesting…

  4. Richard W says:

    As you correctly state the Horse Hill volumetrics are very big numbers that are currently all but meaningless.
    The reservoir in KCF limestones is highly cemented with low porosity and permeability and therefore have limited storage capacity. The oil is likely to be flowing from natural fractures within the limestone; the oil recovered from the limestone beds within the KCF is conventional and not an LTO.
    Given the depth of the limestones the reservoir pressure is unlikely to be sufficient to maintain the initial flow rate. The flow rates where 7 & 9 hours. Production rates will be highly dependent on the fracture network within the limestones.
    Given the well has probably drilled a structural closure for there to be oil in the fractures the Kimmeridge accumulation is probably a similar size to the shallower objectives.
    The absence of geological reasoning in the media reporting has helped to hype this discovery.

    • Euan Mearns says:

      Richard, thanks. If the storage and production comes from natural fractures then the volumes will likely be small. Water will whistle up through the fractures and kill any wells. In an earlier life I published this (work done in my own lab) that was invited as a best paper to the AAPG in San Diego 199x

      • Richard W says:

        The Kimmeridge Micrites are encased in thick KCF claystones. Whether the Micrite fracture system extends vertically into the KCF is likely to determine the amount of water coning. In the well the initial flow was reported 50:50 oil water before it was choked back.

  5. Gaznotprom says:

    Great post E, thanks.
    Think the idea is to bulk a company up, like a hydrocarbon puffer-fish, to securitise, issue bonds, plug into pensions & get out before the music stops!

  6. mosomoso says:

    Thanks E. I sometimes pop in here for the adult version of energy/climate stories. So glad I did this time. (I fear we may be approaching Peak Adult.)

  7. PhilH says:

    One place in the article talks about the applicable area being 55 sq km, but in another place it’s 55 sq mi – making a difference in the conclusion of over 2.5. Though I guess 2.5 times more or less than one meaningless figure is just another meaningless figure.

  8. Pingback: Gatwick Oil Estimates Too Good To Be True | Energy News Corporation

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