AIM-listed UK Oil & Gas (UKOG) notes the Supreme Court decision by a three to two majority, which found that in its 2019 grant of planning consent for the Company's oil production at Horse Hill, Surrey County Council ('SCC') did not request and consider in their assessment an estimate of the end-use carbon combustion emissions of produced hydrocarbons. The ruling now retrospectively requires that the end-use combustion emissions must be included in the development's Environmental Impact Assessment ('EIA') and assessed as part of the grant of planning consent for the development.

Consequently, the Company now plans to work closely with SCC to promptly rectify the situation, either via an amendment to the original 2018 planning application's EIA or via a new retrospective planning submission, for which there is recent planning precedent within Surrey.

In the case of a retrospective planning solution, the field's historic and future expected production volumes would fall below the 500 tonnes/day (c. 3,700 barrels/day) production threshold for which an EIA is mandatory for petroleum extraction developments.

It should be noted that the original 2018 planning submission and 2019 consent were subject to the prevailing 2017 Planning Act EIA Regulations and precedents, which were interpreted by SCC to require consideration of only those emissions derived from the actual development. It being reasonably considered that any end-use derived emissions would be subject to other end-use emissions controls (e.g., at refineries or in vehicle use) which lie beyond the developer's control.

This position was upheld by numerous judges in prior hearings from 2020 to 2022, including England's two most senior planning judges, Lord Justices Holgate (2020) and Lindblom (2021) and the Court of Appeal (2022).

The Company has at all times operated the field in full regulatory and legal compliance.

The Company holds an effective 85.635% interest in Horse Hill and the surrounding PEDL137 licence.

Stephen Sanderson UKOG's Chief Executive commented:
"The Court's rather perplexing retrospective ruling, which is counter to all prior judgements, further underscores why the Company's focus over the past few years has shifted away from oil and gas and firmly towards creating and delivering strategic underground hydrogen storage, an essential element of the UK's future low carbon energy system.

These projects have the potential to create far greater sustainable value for the Company and the UK than any small onshore field such as Horse Hill. They also have the added benefit of making a positive contribution to Net Zero.

However, although Horse Hill is a small part of our portfolio, it still has a role to play in both the Company's and UK's future transitional energy mix and thus we look forward to working closely with the local planning authority to rectify this retrospective change to EIA requirements."

KeyFacts Energy: UK Oil & Gas UK country profile