London-listed UK Oil & Gas (AIM:UKOG)  told investors on Friday that the Oil and Gas Authority has approved the Horse Hill Field Development Plan in what the CEO has labelled “an important regulatory milestone” for UKOG.

The UK-based oil and gas exploration firm said the OGA has also consented to the start of long-term production from the field which is located near Gatwick Airport.

UKOG holds a controlling 85.635% interest in the Horse Hill oil field and surrounding highly prospective PEDL137 and PEDL246 licences.

“This confirmation of the OGA's approval of the Horse Hill FDP and the start of long-term production is very welcome and positive news indeed,” said George Frangeskides, Executive Chairman of Alba Mineral Resources (AIM:ALBA) which holds a 11.765% interest in the licences.

Shares in UK Oil & Gas were trading 20% higher at 0.45p during Friday trading.

The decision of the OGA will enable net recoverable reserves to be allocated to UKOG, which is a prerequisite for future potential debt-based funding.

It will also permit UKOG to enter into long-term field operations contracts which can help reduce operating costs below $19 per barrel, making the field more profitable even at current low oil prices.

Oil pool production from the Portland formation will commence via Horse Hill-1 ("HH-1") with Kimmeridge Production planned to be added in late spring via a conversion of the well to a dual completion.

Production from HH-2z is planned to follow upon completion of the current extended well testing campaign, this morning’s statement added.

Shares in Alba Mineral Resources were trading 21.43% higher at 0.085p during Friday trading.

“The company can now focus firmly upon maximising stable production, reducing operating costs and generating positive cash flow,” said Stephen Sanderson, UKOG's Chief Executive.

He added, “The ability to book reserves also opens the way to potential debt funding, a positive step towards both creation and preservation of shareholder value."

Follow News & Updates from UK Oil & Gas here:  and Alba Mineral Resources here: