Size of UK oil find as yet unproven

UK Oil & Gas Investments PLC (UKOG) has said its estimation of potential oil near Gatwick airport was untested.

The "clarification" came after its oil discovery in Horse Hill last week.

UKOG's chief executive told the BBC at the time that the Weald area, including the new discovery, could have "between 50 and 100 billion barrels of oil in place in the ground".

But the company now says it has "not undertaken work... sufficient to comment" on the Weald Basin potential.

A spokesman told the BBC that the Alternative Investment Market (AIM) - on which the company is listed - wanted UKOG to "clarify and reinforce the numbers".

UKOG announced: "The company has not undertaken work outside of its licence areas sufficient to comment on the possible OIP [oil in place] in either the approximate 1,100 sq miles or the whole of the Weald Basin."

It added that "further well testing and assessment of recovery factors will be required to seek to quantify net resources in relation to the... areas and to prove its commerciality".

When the Horse Hill oil discovery was announced, the oil exploration company's chief executive Stephen Sanderson said: "We believe we can recover between 5% and 15% of the oil in the ground, which by 2030 could mean that we produce 10% to 30% of the UK's oil demand from within the Weald area."

UKOG maintains its estimation of the new Horse Hill discovery at 158 million barrels of oil per sq mile.

The company's share price has been volatile, after it soared on the announcement of the new discovery last week.

Analysis: John Moylan, BBC business correspondent

100bn barrels of oil in the South of England. It's an extraordinary claim. No wonder it's generated so much media coverage since the BBC broke the story last week.

And it's at the heart of the reason why the firm has issued what some might regard as an embarrassing clarification.

To be clear, the 100bn figure was not in UKOG's announcement to the market last Thursday or in its update today.

It came from a BBC interview with UKOG's Chief Executive Stephen Sanderson. When asked for his opinion on how much oil might be in the region, known as the Weald, based upon the results at Horse Hill and his knowledge of the wider geology, Mr Sanderson told me:

"Based on what we've found here, I think we're looking at between 50 and 100 billion barrels of oil in place in the ground".

This is his opinion. No one knows how much oil is there or how much could be recovered.

And on that issue today UKOG gave more prominence to another crucial point - that unless proven, the Horse Hill well results should not be considered as either resources or reserves.