David Lenigas is still to apply to the UK's oil regulator for permission to test the Horse Hill well near Gatwick despite stock exchange statement

Drilling for oil at Horse Hill near Gatwick will not be allowed to proceed any further because its backers, including the entrepreneur David Lenigas, do not have the necessary approvals from government agencies.

It was revealed that the operator Horse Hill Developments and its shareholder Aim-listed UK Oil and Gas Investments (UKOG) have not directly applied to the regulator, the Oil and Gas Authority (OGA), for permission to begin flow testing the Horse Hill-1 well in the Weald Basin.

The site will remain in a “suspended state” until the authority sanctions further drilling work to go ahead. The request for approval process with the OGA is entirely separate to the request to extend the Horse Hill licences, which is pending.

It is understood that although UKOG, which is chaired by Mr Lenigas, and its partners have local planning permission and a licence for the site in Surrey they would still require formal approval from the newly established OGA before any flow testing operations- vital to the project’s commercial future - could begin.

UKOG, whose shares are traded on the London Stock Exchange’s junior Aim market, said in a statement to the stock exchange that planning permission to proceed at Horse Hill was in place and that it had “already submitted the applications to the authorities for their consent” to conduct a flow test of the well.

However, it is understood that no such application had been received by the Oil and Gas Authority as at the close of business today, Aoril 28.

A spokesman for Mr Lenigas – who is playing an active role in driving the scheme forward – said that the company stands by its original statement “which is entirely accurate”.

According to guidelines, a well test would require planning permission from the Mineral Planning Authority, environmental permits from the Environment Agency (EA), a review of well plans by the Health and Safety Executive and finally regulatory consent from the OGA.

This process could take months, which if so would potentially put the company’s plans to flow test Horse Hill this year under pressure. Mr Lenigas, who regularly updates shareholders through social media, said on Twitter that the exact timing of the testing was “secret”.

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.

However, a week later the company clarified its original statement issued on April 9 emphasising that “hydrocarbon volumes estimated should not be considered as either contingent or prospective resources or reserves.”

Shares in the company closed down 7.26pc at 2.25p.

Source: www.telegraph.co.uk

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