TIDMUJO
RNS Number : 5969G
Union Jack Oil PLC
05 March 2018
5 March 2018
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
Union Jack Oil Plc
("Union Jack" or the "Company")
Proposed Farm-in for an Additional 10% Interest in the
Drill-Ready Biscathorpe Prospect
Commercial Partnership Memorandum Signed with Humber Oil &
Gas Limited
Oversubscribed Placing and Subscription to raise GBP1.25m
The Directors of Union Jack Oil plc (AIM: UJO) are pleased to
announce that the Company has agreed terms on a proposed farm-in
for a further 10% licence interest in PEDL253 ("Proposed Farm-in")
increasing the Company's economic interest to 22%. PEDL253 is
located in the South Humber Basin and contains the drill-ready
Biscathorpe Prospect, where the Biscathorpe-2 conventional
exploration well is planned to be drilled around mid-year 2018.
The Company has also entered into a memorandum of understanding
("MOU") with Humber Oil & Gas Limited ("Humber"), a private
company incorporated in England and Wales, which forms the basis of
an ongoing commercial partnership whereby both parties will seek to
co-invest in UK onshore hydrocarbon opportunities going
forward.
The Company has raised GBP1.25m by way of a placing and
subscription of 1,470,588,226 new ordinary shares of 0.025p each
("New Ordinary Shares") at a price of 0.085p per New Ordinary Share
(the "Fundraising"). The placing comprises 1,311,764,701 New
Ordinary Shares ("Placing") and the subscription of 158,823,525 New
Ordinary Shares ("Subscription"). SP Angel Corporate Finance LLP
acted as sole broker on the Placing.
The proceeds will be used as follows:
-- to fund the Company's expanded drilling obligations in 2018;
-- to progress the evaluation of opportunities within the Company's existing portfolio;
-- to review new opportunities in collaboration with Humber under the MOU; and
-- for general working capital purposes.
Commercial Partnership with Humber Oil & Gas Limited
Union Jack has entered into a commercial partnership with
Humber, a company whose sole director, Frazer Lang, is also
beneficially interested in 396,806,484 ordinary shares of the
Company held by G.P. (Jersey) Limited (representing 9.16% of the
issued ordinary shares prior to the Fundraising).
Union Jack and Humber have agreed to work together in good faith
to progress the commercial partnership and will seek to co-invest
in the UK conventional upstream onshore oil and gas sector.
The Parties will review investment opportunities that fall into
two broad categories:
-- direct equity participation in joint ventures encapsulating UK licence interests; and
-- investments in the equity of private or listed entities.
The first commercial collaboration between Union Jack and Humber
is the Proposed Farm-in for a combined 20% economic interest in
PEDL253, with each of Union Jack and Humber acquiring a 10%
interest.
As part of the commercial collaboration, G.P. (Jersey) Limited
has also acquired a further 183,558,823 New Ordinary Shares in the
Fundraising and will hold in aggregate 580,365,307 ordinary shares
representing a 10% interest in the Company's share capital as
enlarged by the Fundraising.
Further information on PEDL253 and the Proposed Farm-in
Pursuant to the Proposed Farm-in, UJO and Humber will each
acquire individually 6% of Egdon Resources U.K. Limited's interest
in PEDL253 by paying their pro-rata share of the Biscathorpe-2 well
cost plus an additional GBP10,000 per percentage point interest
acquired, both at the time of drilling. In addition, UJO and Humber
will each acquire individually 4% of Montrose Industries Limited's
interest in PEDL253 under the same terms. The Company is not
required to make any immediate up-front cash payment.
The Proposed Farm-in, which will be progressed following
completion of the Fundraising, is subject to contract and Oil &
Gas Authority approval.
PEDL253 is within the proven hydrocarbon fairway of the South
Humber Basin and contains the drill-ready Biscathorpe Prospect and
is on trend with the Saltfleetby gas field, Keddington oil field
and the Louth and North Somercotes prospects. The Biscathorpe-1
well drilled by BP in 1987 encountered a thin oil filled sandstone
which is expected to thicken down-dip.
The Biscathorpe Prospect is a well-defined four way dip closed
structure mapped from recently re-processed 3D seismic. The
Biscathorpe-2 conventional exploration well is planned to be
drilled around mid-year 2018.
The Biscathorpe-2 conventional well will be located in a
direction towards a potentially thicker sand development within the
structural closure of the trap and partner approval has been
granted to drill the conventional well. The current best estimate
prospective resource is 14 million barrels of oil (gross) with a
geological chance of success of 40%.
During 2017, Union Jack commissioned an independent review of
the Biscathorpe 3D seismic survey which was conducted by
geophysical consultants Sotwell Exploration Ltd ("Sotwell").
Sotwell's findings were encouraging, confirming the Biscathorpe
'concept' with good evidence from seismic attributes of the sand
thickening away from the Biscathorpe-1 well location, with the
Biscathorpe-2 location, in the opinion of Sotwell, appearing to be
optimal to appraise the prospect. In addition, Sotwell`s opinion is
that the whole area, within PEDL253, is attractive for hydrocarbon
exploration and that significant upside may exist due to potential
stratigraphic trapping.
The proposed Biscathorpe-2 well will involve conventional
drilling for oil trapped in a sandstone reservoir and for clarity
the operations at the site will not either now or in the future
involve the process of hydraulic "fracking" for shale gas or
shale-oil.
Details of the Director Subscriptions
David Bramhill and Joseph O'Farrell intend, following this
announcement, to subscribe for a total of 70,588,234 New Ordinary
Shares at a price of 0.085p per share ("Director
Subscriptions").
Of this, Joseph O'Farrell, Executive Director of Union Jack,
intends to subscribe GBP50,000 for 58,823,529 New Ordinary Shares,
following which he will have a beneficial interest in 177,693,592
ordinary shares, representing approximately 3.06 per cent. of the
enlarged ordinary share capital of the Company.
David Bramhill, Executive Chairman of Union Jack, intends to
subscribe GBP10,000 for 11,764,705 New Ordinary Shares, following
which he will have a beneficial interest in 65,962,285 ordinary
shares, representing approximately 1.14 per cent. of the enlarged
ordinary share capital of the Company.
Fundraising and Admission
Completion of the Fundraising is conditional, inter alia, upon
admission of the New Ordinary Shares to trading on AIM.
The New Ordinary Shares will rank pari passu in all respects
with the existing ordinary shares. Application has been made to the
London Stock Exchange for the New Ordinary Shares to be admitted to
trading on AIM and admission is expected to take place on or around
8 March 2018.
Total Voting Rights
Following admission, the Company's share capital and total
voting rights will comprise 5,803,651,431 ordinary shares of 0.025p
each. The Company does not hold any shares in treasury.
Consequently, 5,803,651,431 is the figure which may be used by
shareholders as the denominator for the calculation by which they
will determine if they are required to notify their interest in, or
a change to their interest in, the Company under the FCA's
Disclosure and Transparency Rules.
David Bramhill, Executive Chairman of Union Jack, commented:
"We are grateful for the continuing support of our existing
shareholders and new investors who have participated in this
oversubscribed Fundraising. The funds raised will allow us to
acquire an additional 10% interest in PEDL253, on attractive
farm-in terms, and progress the drilling of the potentially
high-impact Biscathorpe-2 conventional exploration well. The
Fundraising also enables us to progress existing opportunities
within the Company's portfolio and evaluate further acquisition
opportunities, in partnership with Humber.
"We look forward to working with Humber on the Biscathorpe-2
well, and to a constructive and value-adding relationship with them
in identifying new accretive acquisition opportunities going
forward on which we can work together.
"The Company is now in an even stronger position to deliver
growth in reserves, production and asset value, while adhering to
our principles of strict financial and technical discipline."
Frazer Lang, Executive Director of Humber, commented:
"We are delighted to be associated with Union Jack, both as a
commercial partner and as a 10% shareholder. In Humber's opinion,
Union Jack holds a highly attractive UK onshore portfolio of
conventional producing, appraisal and drill-ready projects and we
hold in high regard what the team has assembled. We look forward to
working with Union Jack and the other joint venture partners on the
much anticipated Biscathorpe-2 well as our first joint project
together and in evaluating and acquiring other attractive
conventional UK onshore opportunities in due course."
Related Party Transaction
David Bramhill and Joseph O'Farrell are related parties to Union
Jack, as defined in the AIM Rules for Companies and the Director
Subscriptions are related party transactions for the purposes of
Rule 13 the AIM Rules ("Related Party Transactions").
Raymond Godson and Graham Bull, being the independent Directors
for the purposes of the Related Party Transactions, consider,
having consulted with the Company's nominated adviser, SP Angel
Corporate Finance LLP, that the terms and conditions of the
Director Subscriptions are fair and reasonable insofar as the
shareholders of the Company are concerned.
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
Richard Hail
In accordance with the "AIM Rules - Note for Mining and Oil and
Gas Companies", the information contained within the announcement
has been reviewed and signed off by Graham Bull, Non-Executive
Director, who has over 46 years of international oil and gas
industry exploration experience.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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