The Horse Hill oil project has been approved for an extended flow test by the Environment Agency.
Stakeholders UK Oil & Gas Investments PLC (LON:UKOG) and Solo Oil PLC (LON:SOLO) confirmed that the approval will allow the programme to test the HH-1 well, as well as drill a side-track to HH-1 and the new HH-2 well.
READ: UKOG completes acquisition of additional Horse Hill stake
The Horse Hill partners, separately, await planning permission for the project – an application was submitted in October 2016 and it is anticipated that a decision will be made by the Surrey County Council planning committee on October 18 2017.
A site visit including members of the planning committee took place yesterday.
It is expected that the new Horse Hill programme will get underway in the fourth quarter, following the necessary remaining approvals.
READ: Solo Oil upside eyed by house broker ahead of pivotal Horse Hill planning decision
"We look forward to a successful planning outcome and the resumption of operations at Horse Hill," said Stephen Sanderson, executive chairman of 32.435% Horse Hill stakeholder UKOG.
Solo Oil owns a 6.5% stake in the Horse Hill project.
In late afternoon trading, Solo Oil shares were over 6.5%, or 0.38p higher at 6.12p.
In a note to clients, analysts at ‘house’ broker Shore Capital said: “With Environment Agency permitting now in place, we look forward to the Surrey planning committee’s forthcoming decision on Horse Hill and, in the meantime, highlight the positive read-across provided by other Kimmeridge wells in the vicinity, along with the impressive resource upgrade recently announced by Solo (along with operator Aminex+) in Tanzania.
“As previously flagged, following the recent strong progress seen at Ruvuma in Tanzania, we now anticipate an upgrade to our 18p/share Risked NAV estimate for Solo.”
-- Adds share price, broker comment --