Oil Find Excites Britain

Oil fever gripped Britain on Thursday after a small company announced the discovery of what it described as “a possible world-class potential resource” in the Surrey countryside south of London near Gatwick Airport.

The company, UK Oil and Gas Investments, said an evaluation by an American company, Nutech, of a well drilled by the British company late last year indicated that there were 158 million barrels of oil per square mile in the terrain around it.

Investors and others noted that with UK Oil and Gas Investments and its partners holding licenses covering 55 square miles in what is known as the Weald Basin, they could be sitting on almost nine billion barrels of oil, a giant field if anything could be coaxed to the surface.

“We are pretty confident that this is a system that is comparable to the big things” in the United States, David Lenigas, the chairman of UK Oil and Gas, said by telephone.

Mr. Lenigas mentioned large American shale oil finds like the Bakken in North Dakota and Wolf Camp in Texas or the Bazhenov Shale Formation in Russia as possible analogs.

While UK Oil and Gas executives were enthusiastic — the company’s chief executive, Stephen Sanderson, told the BBC that the Weald could hold 50 billion to 100 billion barrels of oil, more than has been produced by the North Sea — experts were more skeptical. They noted that even if the oil were there, much more work would be required to find out how much, if any, could be extracted.

“Without drilling several wells and subjecting them to lengthy production tests (say 18 months) no one knows how much can be produced,” Richard Selley, a geologist at Imperial College in London, said in an email.

He said that UK Oil and Gas had reached its conclusion of what might be underground by extrapolating for the entire Weald Basin what was found in one spot of it. “This can do wonders for the share price,” he said.

Indeed, it did. UK Oil and Gas shares, which are listed on London’s small-company AIM exchange, soared almost fourfold early on Thursday before closing with a gain of 176 percent.

Mr. Lenigas makes no secret that he is trying to attract attention and raise money for the additional drilling needed to maximize the discovery. A spokesman for the company said by telephone that it would be receptive to a takeover. “We are here for takeover,” he said.

UK Oil and Gas owns about 20 percent of the licenses to drill at the site, Horse Hill, with the rest divided among several small operators and investors.

Still, the excitement in portions of the media and in the investment community indicates that many Britons are intrigued by the prospect of a new oil and gas industry despite the disapproval of environmental groups and local activists who worry that fracking will disrupt their lives and pollute their water supplies.

In an interview this year, Sarah O’Hara, a professor at Nottingham University who has conducted polling on public attitudes toward shale gas development, said, she did not think that Britons were “totally against at all.”

Ms. O’Hara’s polling, which began in 2012, has consistently found that more Britons favor shale gas exploration than are opposed to it, although opposition rose after protests over a well being drilled in 2013 near Balcombe, a village not far from Horse Hill.

Onshore oil and natural gas production is not new to Britain. Scattered across the landscape, there are about 120 sites with about 250 wells, according to the industry group United Kingdom Onshore Oil and Gas. The Weald is already a major onshore production area but for the most part, its wells appear to be small producers churning out just tens of barrels per day. Altogether, British onshore wells produce roughly 25,000 barrels per day of oil and gas — compared with around 1.4 million barrels per day for the North Sea.

Britain is the largest producer of oil in the European Union but accounts for about 1 percent of world oil output.

Some onshore wells have been in place for years but draw little attention. It is the specter of hydraulic fracturing, a process known as fracking that is used to produce oil and natural gas from shale rock, that raises fears.

Mr. Lenigas had soothing words for anyone worried that his company intends to start fracking, or otherwise disrupt their lives. The resources below the Weald will only need horizontal drilling because they have already been naturally fracked, he said.

“We don’t see any reason why this field is a fracking field,” he said. “Fracking is a ‘no’ for us.”

A spokesman at Gatwick Airport, which is just two miles away, said officials were unconcerned about the possible impact of a budding local oil industry on airport activities, including ambitions to build a second runway.

“We believe that this would have no impact on our runway expansion plans,” the spokesman, Grant Payne, said in a statement.

Residents in the area, on the other hand, are suspicious, and there were small protests last year during drilling activities. “It is clear that the companies involved are interested in shale oil,” said Rob Basto, a computer programmer who lives a few miles away in Reigate.

“One drill site may not appear too bad,” he continued. “But to get the sort of oil they are talking about would need thousands of sites across the area.”

NY Times