A British energy explorer said it has discovered more than 8 billion barrels of shale oil in London’s commuter belt near the country’s second-busiest airport.
NuTech Ltd., a U.S. oilfield services company, estimates the Horse Hill field in the Weald basin, south of the British capital, has 158 million barrels of oil a square mile, UK Oil & Gas Investments Plc said in a statement on Thursday. UKOG almost tripled in value to 51.5 million pounds ($76 million) in London.
“The Horse Hill well has discovered a possible world class potential resource,” UKOG Chief Executive Officer Stephen Sanderson said in the statement.
The discovery in a basin that spans the affluent counties of Surrey, Sussex and Kent confirms a British Geological Survey report published last year and will fuel a debate over whether the U.K. should tap the global shale boom. While the government wants to develop the resources to cut energy costs and boost the economy, opponents say the process of hydraulic fracturing, using high volumes of water, sand and chemicals to drill shale, can damage the environment.
UKOG shares rose as much as 325 percent and were up 178 percent to 3.08 pence at 12:57 p.m. in London.
“These reservoirs can be successfully produced using conventional horizontal drilling and completion techniques,” said Sanderson.
While further drilling and well-testing will be needed to prove whether the field is commercial, similar basins in the U.S. have seen 3 percent to 15 percent of the oil recovered, said UKOG, owner of 20 percent of the Horse Hill licenses, which cover 55 square miles.
Scotland and Wales this year temporarily banned hydraulic fracturing until they study environmental safeguards. While the U.K. Parliament rejected a similar moratorium, the government accepted opposition calls to ban fracking in national parks and beauty spots.
Such a ban would affect 97 percent of 931 English fracking blocks examined, according to the environmental group Greenpeace. Caroline Lucas, the country’s only Green Party lawmaker, was among those arrested in 2013 for protesting against drilling at Cuadrilla Resources Ltd.’s conventional oil well site at Balcombe in Sussex, before being cleared of any offenses. Work at Balcombe was halted.