TIDMUJO
RNS Number : 9923S
Union Jack Oil PLC
09 October 2017
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the
purposes of Article 7 of Regulation (EU) No 596/2014 until the
release of this announcement.
9 October 2017
UNION JACK OIL PLC
(AIM: UJO)
Acquisition of Nautical Petroleum`s UK Onshore Hydrocarbon
Licence Portfolio
Union Jack Oil plc ("Union Jack" or the "Company"), a
UK-focused, onshore oil and gas production and exploration company
is pleased to announce the acquisition of the entire onshore
hydrocarbon portfolio interest of Nautical Petroleum Limited, a
wholly owned subsidiary of Cairn Energy PLC.
The portfolio comprises:
-- PEDL005(R) containing the producing Keddington oilfield ("Keddington") (10%)
-- PEDL339 containing the Louth Prospect ("Louth") with an
estimated Stock Tank Oil Initially in Place ("STOIIP") of 5.5
million barrels (10%)
-- PEDL203 containing the Kirklington 3-Z well which will be
production ready once remedial works to site equipment are carried
out should a future production decision be made (16.67%)
-- PEDL118 containing the de-commissioned Dukes Wood oilfield
where unproduced reserves are believed to exist (16.67%)
The consideration for the acquisition is GBP25,000 and Union
Jack has assumed all further financial costs for the above assets
with immediate effect. The cost of the transaction will be financed
from existing cash resources.
Union Jack will receive Keddington production proceeds from the
Economic Date of 1 September 2017.
The turnover attributable to the Company's existing 10% interest
in PEDL005(R) in the year to 31 December 2016 was GBP22,119,
generating a gross loss of GBP577. The acquisition of a further 10%
interest in the licence would, on a pro rata basis, double turnover
and the gross loss attributable to the interest. However, the
enlarged 20% interest will produce a higher level of turnover,
resulting in a gross profit for the remainder of the current
financial year, given expected higher oil prices compared to the
same period last year.
The Oil and Gas Authority has approved the transaction and the
licence interests will be transferred to Union Jack on completion,
subject to satisfaction of the completion conditions.
The licences are all operated by Egdon Resources plc ("the
Operator").
PEDL005(R) - Keddington
As a result of this transaction Union Jack who previously held a
10% interest in PEDL005(R) now holds a 20% interest in PEDL005(R)
and will receive 20% of all production revenues from Keddington,
currently producing approximately 30 barrels of oil per day from
Carboniferous age sandstone reservoirs from the Keddington 3-Z
well.
Recent mapping of the 3-D seismic over Keddington has indicated
areas of potentially unswept oil within structural closure.
Comprehensive geophysical and geological evaluation is ongoing to
better define the greater Keddington area.
Keddington is located along the highly prospective East Barkwith
Ridge, an east-west structural high on the southern margin of the
Humber Basin. The Saltfleetby gasfield is located at the east of
this ridge. The Biscathorpe Prospect (Union Jack 12%), is located
to the west and the Operator`s Best Estimate of gross Prospective
Resources is 14 million barrels of oil and with an attractive
geological chance of success ("COS") of 40%. A conventional well at
Biscathorpe is expected to be drilled in early 2018.
Additionally, there is also the potential for stratigraphic
trapping at Biscathorpe, which, if present, could increase the
expected gross Prospective Resources to 41 million barrels of
oil.
PEDL005(R) also contains a portion of Louth and the entire North
Somercotes gas prospect. The latter is estimated by the Operator to
contain gross mean Prospective Resources of 11 billion cubic feet
of gas with a COS of 25%.
The interests held in PEDL005(R) following the transaction are
as follow:
Keddington Oilfield PEDL005(R) Ex.
Keddington
----------------- -------------------- ---------------
Egdon Resources
U.K. Limited 45% 65%
----------------- -------------------- ---------------
Terrain Energy
Limited 35% 15%
----------------- -------------------- ---------------
Union Jack Oil
plc 20% 20%
----------------- -------------------- ---------------
PEDL339 - Louth
Louth is located immediately west of, and along trend from,
Keddington and extends into PEDL005(R). As a result of this
transaction, Union Jack now holds a 20% interest in PEDL339. 10%
was previously acquired at no cost from the Operator due to its
award to the existing Joint Venture group in the UK 14(th) Landward
Oil and Gas Licensing Round.
Louth is defined on reprocessed 3-D seismic data and is
estimated by the Operator to contain STOIIP of 5.5 million barrels
of oil and gross mean Prospective Resources of 1.4 million barrels
of oil with an attractive COS of 37%.
The interests held in PEDL339 following the transaction are as
follow:
Egdon Resources
U.K. Limited 65%
----------------- ----
Union Jack Oil
plc 20%
----------------- ----
Terrain Energy
Limited 15%
----------------- ----
PEDL203 - Kirklington
The currently shut-in Kirklington oilfield is located in
Nottinghamshire, situated in the East Midlands Province immediately
south and along trend with the Eakring oilfield.
Kirklington was originally discovered by BP in 1985 and produced
oil from two Carboniferous reservoirs, the Crawshaw sandstone and
the Chatsworth Grit.
The Kirklington-3 and the Kirklington 3-Z sidetrack wells were
drilled by the Operator in 2010 and produced from only one of nine
potential pay zones until mid-2013. The STOIIP is believed to be
approximately 4.23 million barrels of oil with circa 1% of this
figure having been produced to date.
The 3-Z well is currently shut in and production facilities have
been preserved as part of a care and maintenance programme and will
be production ready once remedial work has been conducted to site
equipment should a future production decision be made.
Various studies are ongoing to evaluate completion and enhanced
recovery options, both mechanical and chemical which could be
applied to the unswept oil reservoirs present to enable further
production from Kirklington.
The interests held in PEDL203 following this transaction are as
follow:
Egdon Resources
U.K. Limited 55.55%
----------------- -------
Terrain Energy
Limited 27.78%
----------------- -------
Union Jack Oil
plc 16.67%
----------------- -------
PEDL118 - Dukes Wood
The currently de-commissioned historic Dukes Wood oilfield, also
located within the East Midlands Province was discovered in 1939 by
the D`Arcy Company (now BP). Dukes Wood played a very important
part supporting the war effort during WWII and produced throughout
this period. The oilfield was abandoned in 1966 having produced
approximately 6.5 million barrels of oil from a mapped 25.6 million
barrels of oil in place.
The current Operator drilled the Dukes Wood-1 well in 2010 and
encountered three reservoir zones, the Ashover Grit, Crawshaw
sandstone and the Loxley Edge Rock, all of which were flow
tested.
Studies are ongoing to identify reservoir zones containing
previously undrained oil resources.
The interests held in PEDL118 following this transaction are as
follow:
Egdon Resources
U.K. Limited 55.55%
----------------- -------
Terrain Energy
Limited 27.78%
----------------- -------
Union Jack Oil
plc 16.67%
----------------- -------
David Bramhill, Executive Chairman of Union Jack Oil plc
commented:
"The opportunity for Union Jack to acquire Cairn Energy`s UK
onshore hydrocarbon portfolio which comprise assets we hold in high
regard, at nominal cost is an excellent result.
The assets acquired are all located in Union Jack`s core area of
interest in the East Midlands which include additional interests in
the producing Keddington oilfield and the drill-ready prospects,
subject to planning, at Louth and North Somercotes.
This acquisition is a perfect fit to the Company`s existing
portfolio at minimum cost while allowing Union Jack to focus on
growing its production and exploration business."
For further information, please contact:
Union Jack Oil plc +44 (0)7787 160 682
David Bramhill
SP Angel Corporate Finance
LLP +44 (0)20 3470 0470
Nominated Adviser and
Joint Broker
Lindsay Mair
Stephen Wong
Richard Hail
Turner Pope Investments
(TPI) Ltd +44 (0)20 3621 4120
Joint Broker
Ben Turner
James Pope
In accordance with the "AIM Rules - Note for Mining and Oil and
Gas Companies", the information contained within this announcement
has been reviewed and signed off by Graham Bull, Non-Executive
Director, who has over 47 years of international oil and gas
industry experience.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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