Significant upgrade to the Horse Hill discovery

9 April 2015 Doriemus plc ("Doriemus" or "the Company") Significant upgrade to the Horse Hill discovery, Weald Basin Doriemus plc (AIM: DOR) is pleased to announce that UK Oil & Gas InvestmentsPlc ("UKOG"), has made the following positive news release with respect to theHorse Hill -1 well in the UK's Weald Basin. Doriemus interest in Horse Hill: The Horse Hill-1 well is located within onshore exploration license PEDL 137,on the northern side of the Weald Basin near Gatwick Airport. Doriemus owns a10% direct interest in Horse Hill Developments Ltd ("HHDL"). HHDL is a specialpurpose company that owns a 65% participating interest and operatorship oflicence PEDL 137 and the adjacent licence PEDL 246 in the UK Weald Basin. Theparticipants in the Horse Hill-1 well are HHDL with a 65% working interest andMagellan Petroleum Corporation with a 35% interest. Enquiries: Doriemus plcDonald Strang/Hamish Harris +44 (0) 20 7440 0640 Cairn Financial Advisers LLP:James Caithie / Carolyn Sansom +44 (0) 20 7148 7900 Public Relations:Square 1 Consulting Ltd +44 (0) 20 7929 5599David Bick/Mark Longson UKOG news Release of 9 April 2015 in full is as follows: London quoted UK Oil & Gas Investments PLC (LSE AIM: UKOG) is pleased toannounce that US-based Nutech Ltd ("Nutech"), one of the world's leadingcompanies in petrophysical analysis and reservoir intelligence, estimate thatthe Horse Hill-1 ("HH-1") well in the Weald Basin has a total oil in place("OIP") of 158 million barrels ("MMBO") per square mile, excluding thepreviously reported Upper Portland Sandstone oil discovery. The Horse Hill licences cover 55 square miles of the Weald Basin in southernEngland in which the Company has a 20.36% interest. Nutech's report to the Company states this OIP lies within a 653 feet aggregatenet pay section, primarily within three argillaceous limestones and interbeddedmudstones of the Kimmeridge, and the mudstones of the Oxford and Lias sections.Approximately 72% of OIP, or 114 MMBO, lies within the Upper JurassicKimmeridge interbedded limestone and mudstone sequence. The Executive Summaryof the Nutech Report is appended in full at the end of this release and thefull executive report with figures will be available on the Company's websiteat www.ukogplc.com. In order to establish estimates of total OIP within the licence area, thesemi-regional resource potential of the Weald Basin's eastern footprint is thesubject of ongoing analysis under the contracted alliance between Nutech, UKOGand Solo Oil Plc. The results of the estimated OIP within the licence will bereported when completed. Final assessments of the Upper Portland Sandstone and the Oxford and Liassections are in progress, with further results expected shortly. Stephen Sanderson, UKOG's CEO, commented: "Drilling the deepest well in the basin in 30 years, together with the abilityto use concepts, techniques and technology unavailable in the 1980s, hasprovided new cutting-edge data and interpretations to comprehensively changethe understanding of the area's potential oil resources." "As a result, we believe that, in addition to the Portland Sandstone oildiscovery, the Horse Hill well has discovered a possible world class potentialresource in what is interpreted to be a new Upper Jurassic "hybrid play". "With the help of Nutech's considerable global knowledge base and play library,we have identified that the Horse Hill Upper Jurassic rock sequence isanalogous to known oil productive hybrid reservoir sections of the Bakken ofthe US Williston Basin, the Wolfcamp, Bone Springs, Clearfork, Spraberry, andDean Formations in the US Permian Basin and the Bazhenov Formation of WestSiberia." "The US analogues have estimated recovery factors of between 3% and 15% of Oilin Place." "The Company considers that the high pay thickness, combined with interpretednaturally fractured limestone reservoir with measurable matrix permeability,gives strong encouragement that these reservoirs can be successfully producedusing conventional horizontal drilling and completion techniques." "Nutech's results combined with our extensive geochemical analyses stronglyindicates that the Company's Horse Hill licences lie within the likely sweetspot of the identified "Weald hybrid play"." "Appraisal drilling and well testing will be required to prove itscommerciality, but this "Weald hybrid play" has the potential for significantdaily oil production." "The operator, Horse Hill Developments Ltd, with the assistance of Nutech, isnow focussed on flow testing the Portland Sandstone and Kimmeridge Limestonesections of the well, to establish producibility and thereby seeking toquantify an overall net discovered resource". UKOG's interest in Horse Hill: The Horse Hill-1 well is located within onshore exploration License PEDL 137,on the northern side of the Weald Basin near Gatwick Airport. UKOG owns a 30%direct interest in Horse Hill Developments Ltd ("HHDL") and a 1.32% interest inHHDL via its 6% interest in Angus Energy Limited. HHDL is a special purposecompany that owns a 65% participating interest and operatorship of Licence PEDL137 and the adjacent Licence PEDL 246 in the UK Weald Basin. Qualified Person's Statement: Stephen Sanderson, UKOG's CEO, who has over 30years of relevant experience in the oil industry, has approved the informationcontained in this announcement. Mr Sanderson is a Fellow of the GeologicalSociety of London and is an active member of the American Association ofPetroleum Geologists. The oil in place hydrocarbon volumes estimated should not be considered aseither contingent or prospective resources or reserves. For further information please contact: UK Oil & Gas Investments PLC David Lenigas / Donald Strang Tel: 020 7440 0640 WH Ireland (Nominated Adviser and Broker) James Joyce / Mark Leonard Tel: 020 7220 1666 Square 1 Consulting (Public Relations) David Bick / Mark Longson Tel: 020 7929 5599 Nutech Executive Report Summary (dated: 8 April 2015): Results and Recommendations: NULOOK and NULIST (electric) log interpretation results, now calibrated byPOROLAB's rock analyses, calculate that the Horse Hill-1 well, excluding thestructurally constrained Upper Portland sandstone, has a total oil in place("OIP") estimate of 158 million barrels of oil ("MMBO") per square mile. The158 MMBO per square mile OIP correlates to an aggregate pay section of 653feet, primarily from the argillaceous limestones and mudstones of theKimmeridge, and the mudstones of the Oxford and Lias sections. Table 1 showsthe calculated OIP values for the well's main stratigraphic units. It is highlyrecommended that conventional flow testing be undertaken in one or more of theKimmeridge limestone units as part of the planned flow testing of the UpperPortland sandstone discovery. From its proprietary regional well log analyses NUTECH considers that the HH-1OIP extends significantly beyond the 55 square miles of PEDL137 and PEDL246with strong evidence that the eastern section of the Weald Basin containsconsiderably larger oil potential than has been previously estimated andpublished. This regional potential is the subject of ongoing analysis underNUTECH's contracted alliance with UK Oil & Gas Investments PLC and Solo OilPlc. Table 1: HH-1 NULOOK/NULIST OIP Summary Table: SECTION DEPTH FT DEPTH FT GROSS FT PAY FT OIP TOP BASE MD MD MMBO/Sq. Mile L. Portland 2038 2320 129 19 7.2 Kimmeridge 2482 4430 1948 511 114.9 Top 4430 5000 374 0 0.3Corallian Oxford 5050 5466 415 30 7.2 Kellaways 5466 5517 16 0 0.0 Upper Lias 6370 6711 220 0 0.4 Middle Lias 6711 7072 100 4 1.6 Lower Lias 7072 8096 986 53 17.6 Triassic 8288 8507 150 12 3.2 Palaeozoic 8508 8837 213 24 5.5 TOTAL 4308 653 158.0 TOT TOT CUM The most significant calculated OIP volumes lie within the Upper JurassicKimmeridge section at 115 MMBO per square mile. The total Kimmeridge sectioncalculates at 511 feet net pay with a corresponding average TOC of 2.8 %. Table2, below, illustrates that the Kimmeridge now contains three interbeddedargillaceous limestone and mudstone hybrid reservoir sequences, which containan aggregate OIP of 107 MMBO per square mile, or 93% of the total KimmeridgeOIP. The Middle Kimmeridge hybrid reservoir sequence is likely the most prospectiveas it contains two thick circa 100 gross feet oil saturated limestone reservoirunits with an aggregate limestone only net pay section of 78 feet. The MiddleKimmeridge units are encased within 593 gross feet of self-sourcing,oil-saturated organic rich mudstones, with high TOCs up to 9.4%. Fracture analysis, together with information from offset well information,indicates that the Kimmeridge shows good evidence of natural fracturing,particularly in the Middle Kimmeridge Limestone 1 and 2 pay sections. Table 2: Kimmeridge Total and Kimmeridge Hybrid Section OIP and Metrics: UNIT LITHOLOGY TOP BASE GROSS NET PAY CLAY PORO-SITY SW AVG ³ OIP FT FT MD FT MD PAY RANK PAY ² TOC % MMBO/ MD * % % % FT SQ. MD MILE U. KIMM Mudstone 2482 2649 167 19 3 50.1 9.7 1.14 7.9 1 M. KIMM Mudstone 2649 2825 176 100 3 50.2 9.7 2.13 19.2HYBRID 2SEQUENCE Upper 2825 2931 106 17 2.94 16.1 8.5 53.8 n/a 3.0 Limestone 1 Mudstone 2931 3082 151 98 2.97 42.2 7.9 4.05 17.4 3 Lower 3082 3184 102 61 2.66 18.2 8.5 45.6 n/a 12.7 Limestone 2 Mudstone 3184 3450 266 113 3 41.4 7.2 3.69 20.6 4 L. KIMM Limestone 3450 3479 29 17 2.88 23.6 9.3 57.0 n/a 3.0HYBRID 3SEQUENCE Mudstone 3479 4430 951 86 3 41.8 5.1 2.48 31.2 5 TOTAL 1948 511 114.9 *NUTECH flag system that shows the average pay ranking over a formationsequence (5 flags=1, 4 flags=2, 3 flags=3), where 3 is minimum pay ranking; ²Sw in generative shale assumed as ~0%, i.e. no free water; ³ TOC calculatedappear underestimated at high TOC sample values >5% TOC, values up to 9.4% seenin samples. Potential Analogue Plays and Recovery Factors: From a geological, reservoir engineering and possible future operationalperspective, the interbedded naturally fractured carbonate and mudstonereservoirs encountered in the HH-1 are analogous to the Middle Bakken limestoneof the Williston Basin. Further analogues are represented by the interbeddedtight clastic reservoirs and source rocks of the Three Forks Formation, the USPermian Basin (Bone Springs, Wolfcamp, Clearfork, Spraberry, and DeanFormations), and possibly the age equivalent Upper Jurassic Bazhenov Formationof Russia's Western Siberian basin. Bakken wells analyzed by NUTECH show a contacted OIP of between 10-20 MMBO persquare mile, from a formation thickness of 40-150 feet, containing one hybridcarbonate reservoir to mudstone source-rock pairing. The Kimmeridge in HH-1 nowshows three carbonate reservoir-mudstone source-rock pairings. Recoveries perwell to date from the Bakken range from 8-15% in identified sweet spots. NUTECH's analyses of the Wolfcamp/Bone Springs shows a contacted OIP range ofbetween 60-160 MMBO per sq. mile in a 300-400 feet thick section and exhibitsrecovery factors of 1-10%. Table 3: Comparison Metrics of HH Kimmeridge vs. Analogous Hybrid ProducingPlays: Basin Names HH Kimmeridge Bakken &Three Wolfcamp/Bone U. & L. (Weald Basin) Forks Springs Bazhenov Russia- W. Siberia Geological Era U. Jurassic Devonian & Permian U. Jurassic Carboniferous Reservoir Age 145-157 MMybp 320-380 MMybp 260-300 MMybp 140-152 MMybp Depth (feet) 2300-4400* 8,000-11,000 7,000-10,000 8000-11000 Areal Extent (sq. ~1100² ~6500 ~7800 ~800000miles) Thickness (feet) 1500-2000 25-150 300-400 60-150 Porosity 4-10% 4-12% 4-8% 2-12% Water sat. (Sw) 10?-57% 25-60% 20-50% 10-15%*** Clay Content 15**-50***% 25% 20-30% 10-30% Maturity Ro 0.5- 0.91% 0.5-1% 0.8-1% 0.5-1.1% Measured TOC% 2- 9.4% 8-12% 4-8% 3->11% Hydrogen Index 650-900 298-450 ~100-700 200-700 OIP/sq. mile 114 10-20 60-160 7.25->13(MMBO) Recovery Factor • 8-15% 3-10% • *HH-1 uplifted by up to ~5000 feet, **within argillaceous limestone units, ***in mudstones, ² total Jurassic Weald shale prospective area, from BGS 2014, fig47. The Bazhenov Formation, of the same geological age and general stratigraphic,oil source rock composition and source richness as the Kimmeridge, constitutesthe main oil source rock of the super-giant W. Siberian petroleum system. Some200 conventional Soviet era vertical wells have been drilled and produced athighly variable rates and recovery factors in the last 50 years in the BolshoiSalym field area. Production to date is primarily from a hybrid of thinnaturally fractured low porosity and permeability limestone, silicite andcarbonate silicite conventional tight reservoir units interbedded within thecurrently generative high TOC source rock (key metrics are shown in Table 3). Recent publications show that the Upper and Lower Bazhenov mudstone oil sourcerock formations both contain a 10-30 feet low porosity limestone/carbonateconventional reservoirs created by the replacement of radiolarian fossils andalgae or bacteria by carbonate cementation. Additional reservoirs exist in thin5-10 feet thick naturally fractured silicites and carbonate silicites. TheBashenov constitutes a significant future hybrid reservoir target and oilresource albeit on a much larger geographical scale than the Kimmeridge. It isthe focus of intense studies and horizontal drilling by Shell/Gazprom and Exxon/Rosneft. Bazhenov well economics have likely been significantly boosted byRussia's recent oil/corporation tax exemptions for tight (low poroperm i.e.,under 2 milliDarcy permeability) reservoir developments. Work in Progress:Final assessments of the Upper Portland sandstone reservoir and the Oxford andLias sections are still being completed with the assistance of UKOG and itstechnical team. The overall regional potential of the Weald Basin is thesubject of ongoing analysis under the contracted alliance. Glossary: argillaceous a limestone containing a significant proportion of claylimestone minerals cementation involves ions carried in groundwater chemically precipitating to form new crystalline material between sedimentary grains clastic rocks composed of broken pieces of older rocks discovery a discovery is a petroleum accumulation for which one or several exploratory wells have established through testing, sampling and/or logging the existence of a significant quantity of potentially moveable hydrocarbons effective porosity The interconnected pore volume or void space in a rock(PHIE) that contributes to fluid flow or permeability in a reservoir. Effective porosity excludes isolated pores and pore volume occupied by water adsorbed on clay minerals or other grains electric logs tools used within the wellbore to measure the rock and fluid properties of surrounding rock formations fractured containing a crack or surface of breakage within rock; fractures can enhance permeability of rocks greatly by connecting pores together free water water that is mobile, available to flow, and not bound to surfaces of grains or minerals in rock hydrogen index (HI) the amount of hydrogen relative to the amount of organic carbon in a sample, normally expressed in milligrammes of hydrogen per gramme of TOC. The higher the amount of hydrogen the more oil prone the source rock when subjected to time, temperature and pressure; an initial HI over 450 normally indicates an oil prone source rock limestone a carbonate sedimentary rock predominantly composed of calcite of organic, chemical or detrital origin. Minor amounts of dolomite, chert and clay are common in limestones. Chalk is a form of fine-grained limestone lithology The macroscopic nature of the mineral content, grain size, texture and color of rocks micrite a sedimentary rock formed of very fine grained calcareous particles ranging in diameter from 0.06 to 2mm, often referred to as lime mudstone milliDarcy a standard unit of measure of permeability. One Darcy describes the permeability of a porous medium through which the passage of one cubic centimeter of fluid having one centipoise of viscosity flowing in one second under a pressure differential of one atmosphere where the porous medium has a cross-sectional area of one square centimeter and a length of one centimeter. A milliDarcy (mD) is one thousandth of a Darcy and is a commonly used unit for reservoir rocks MD measured depth MMBO millions of barrels of oil MMybp millions of years before present mudstone an extremely fine-grained sedimentary rock consisting of a mixture of clay and silt-sized particles oil in place (OIP) the quantity of oil or petroleum that is estimated to exist originally in naturally occurring accumulations before any extraction or production oil saturation the amount of the pore space within a reservoir containing oil organic rich a rock rich in organic matter which, if subjected to sufficient heat and pressure over geological time, will generate oil or gas. Typical source rocks, usually shale or limestone, contain above an initial 2% organic matter by weight pay a reservoir or portion of a reservoir that contains economically producible hydrocarbons. The term derives from the fact that it is capable of "paying" an income. The overall interval in which pay sections occur is the gross pay; the smaller portions of the gross pay that meet local criteria for pay (such as minimum porosity, permeability and hydrocarbon saturation) are net pay permeability the capability of a porous rock or sediment to permit the flow of fluids through its pore spaces play a set of known or postulated oil and or gas accumulations sharing similar geologic, geographic, and temporal properties, such as source rock, migration pathways, timing, trapping mechanism, and hydrocarbon type porosity the percentage of void space in a rock formation, where the void may contain, for example, water or petroleum recovery factor those quantities of petroleum, as a proportion of OIP anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions reservoir a subsurface rock formation containing an individual natural accumulation of moveable petroleum that is confined by impermeable rock/formations sandstone a clastic sedimentary rock whose grains are predominantly sand-sized. The term is commonly used to imply consolidated sand or a rock made of predominantly quartz sand silicite fine grained rocks composed primarily of layered silica source rock a rock rich in organic matter which, if subjected to sufficient heat and pressure over geological time, will generate oil or gas. Typical source rocks, usually shale or limestone, contain above an initial 1% organic matter by weight sweet spot the area within a shale source rock unit showing highest TOC and generative potential normally associated with basin centred deposition thermal maturity a term applied to source rocks which have received(Ro) sufficient temperature and pressure over geological time to generate hydrocarbons TOC total organic carbon - the weight percent amount of organic carbon within the rock which is a commonly used measure of hydrocarbon source rock richness water saturation The fraction of water in a given pore space. It is(Sw) expressed in volume/volume, percent or saturation units.