UK Oil and Gas sells Horse Hill site for £1m after £25m-plus outlay

New owner renews Horse Hill drilling bid after 2024 supreme court ruling

After more than a decade of attempts to develop the Horse Hill oilfields near Horley in Surrey, UK Oil and Gas has divested the site for £1 million — a fraction of what it spent — and rebranded itself as UK Energy Group, focusing on salt-cavern energy storage and other clean energy projects.

The Guardian, citing industry estimates, reported that there could be about 9.24 billion barrels of oil in the tight Jurassic shale and conventional reservoir sections within the Horse Hill licences, while UKOG had said it had found 100 billion barrels of oil there. The implied value of the licence area reached a peak of £46 million in September 2018, when UKOG agreed to buy a 14.3% economic stake from a group of vendors for £6.6 million.

Public records reviewed by The Guardian appear to show that UKOG invested more than £25 million into the site. Prior to the £1 million sale, UKOG’s financial accounts showed that it had written down the value of its Horse Hill interests to just £55,360 on its balance sheet.

Stephen Sanderson, the company’s chief executive, said while UKOG still sees “potentially material resources” at Horse Hill, the divestment presented “timely and attractive opportunity to complete UKOG’s exit from the UK onshore oil and gas sector.” The company reportedly raised £1 million in 2025 to develop hydrogen-storage projects in south Dorset and Yorkshire, and a further £500,000 to acquire land for a proposed East Yorkshire salt-cavern site.

Guy Prince, head of energy supply at the energy transition thinktank Carbon Tracker, characterised Horse Hill as an example of “regulatory stranding,” in which climate litigation and regulatory shifts undermine the value of a fossil fuel asset.

“The same transition risk can have really radical financial consequences depending on who owns the asset,” Prince said. “For a major [company], it might impair one investment opportunity. But for a small company concentrated on one project like this, it just transformed the entire business.”

In 2024 the UK Supreme Court, in a decision which has since become known as the Finch Ruling, decreed that “a planning authority should have considered the indirect downstream greenhouse gas emissions of an oil and gas project as part of its environmental impact assessment” and overturned a 2019 council decision to let expansion at the site go ahead.

The new owner, Energy B, controls Horse Hill Developments Ltd, which submitted a renewed planning application to Surrey county council in May for four production wells, a new oil processing area, tanker-loading facilities, and a fluid reinjection well. The proposal would allow nearly 700,000 tonnes of oil to be extracted over 20 years.

The application estimates the development would result in about 2.3 million tonnes of greenhouse gas emissions over its lifetime, including emissions from the eventual burning of the oil, and concluded the impact “insignificant.” Planning documents state: “Horse Hill would account for around 0.05% of the projected UK carbon budget; an insignificant contribution that would give rise to insignificant climate change effects.”

Finch disputed the assessment. “New guidance from the government and pre-existing guidance all say that they have to place the emissions from a new proposed project within a cumulative context of all current and approved fossil fuel projects,” she said. “They didn’t make any attempt to do that, although the data is readily available out there.”

She called the developer’s argument that the emissions are insignificant “false,” adding: “Any greenhouse gas emissions are significant. The International Energy Agency has said we can’t afford any new oil or gas. Any additional fossil fuels are going to make it impossible to stay within the 1.5C target, so [the emissions] are significant.”

The application also argued that extracting up to 678,693 tonnes of oil at Horse Hill would improve energy security by reducing the UK’s reliance on imports. An Energy B spokesperson said: “At a time of global uncertainty and energy price shocks, domestic oil and gas production increases energy security. We are confident of meeting all the necessary legal and environmental requirements for the site. With the oil being refined in the UK and the gas serving the domestic market, the field will contribute positively to the UK economy.”

Finch disputed that argument, saying domestically produced oil is typically traded on an international market rather than necessarily supplying British consumers.

Finch said Surrey county council’s decision would be a “significant test case” for whether the climate risks of fossil fuel projects are being properly assessed after the 2024 ruling. The local authority’s formal consultation closed on 13 July, though the council has said it will consider submissions received before it makes its decision, which could be reached this month.

Finch said the Weald Action Group would not rule out seeking another judicial review if the council approved the development. “We’re fairly confident that the environmental statement that’s been submitted isn’t compliant with the law and the new guidance,” she said.

UK Energy Group, formerly UK Oil and Gas, declined to comment.