TIDMUJO
RNS Number : 2186X
Union Jack Oil PLC
18 December 2019
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
18 December 2019
Union Jack Oil plc
("Union Jack" or the "Company")
West Newton A-2 Extended Well Test Update
Union Jack Oil plc (AIM: UJO), a UK focused onshore hydrocarbon
production, development and exploration company is pleased to
announce an update on the Extended Well Test ("EWT") at the West
Newton A-2 appraisal discovery well situated in East Yorkshire
within PEDL183.
Completion and EWT operations on the Kirkham Abbey formation in
the West Newton A-2 well were temporarily suspended in August
2019.
During the early stages of completion and testing it became
apparent that the Kirkham Abbey formation which was previously
expected to be principally a major gas discovery was a reservoir
containing a 20 metre gas column overlying a 45 metre liquid
hydrocarbon column.
The approved testing programme for the West Newton A-2 appraisal
discovery well had originally been designed to test a gas column.
Gas flow to surface was achieved and was flared during operations,
however, due to the equipment availability at the time, reservoir
fluids were not recovered. The oil zone, therefore, was not fully
evaluated during the initial phase of testing.
The EWT was suspended in order to review and revise the well
test design to deliver and validate this important onshore
resource.
Pumping, surface separation, fluid storage tanks and other well
testing equipment has now been sourced to undertake this work.
Regulatory approvals to re-commence the EWT are currently being
sought.
Once regulatory approvals have been received, the equipment will
be mobilised to site at the earliest opportunity and the EWT will
re-commence.
The programme will include pulling the existing completion
assembly from the well, running a new tubing and pumping bottom
hole assembly and the installation of a pumping wellhead. These
operations will be followed by the running in of the pump and well
rods and the installation of a surface pumping unit. The well will
then be pumped to recover load fluid, directing all recovery
through the test unit and incinerator.
The well will be monitored for inflow and, following the EWT,
will be shut in and suspended.
The cost of this additional work is already covered by an
earlier cash call, of which Union Jack has already paid for its
share, and the estimated costs fit well within the original test
well budget.
Statutory planning permissions are in place to drill two
additional wells, the West Newton B-1 and B-2. The locations of
these wells are considered to be optimal to test the Kirkham Abbey
formation and will also test the possible presence of the Cadeby
formation, a further, highly important and high value target.
Union Jack, following a recent successful placing of GBP5
million, is more than adequately funded for the cost of future
drilling operations and any other project related works and
G&A, including 3D seismic acquisition over other potential
prospects within PEDL183.
Following the completion of the EWT, ongoing costs will not be
subject to any promote and all costs will be at a percentage
holding equivalent.
The PEDL183 Licence
PEDL183 covers an area of 176,000 acres and is situated near
Beverley, East Yorkshire, at the Western extent of the Southern
Permian Basin. Union Jack holds a 16.665% interest in this licence,
which contains the West Newton A-1 discovery and the West Newton
A-2 appraisal well.
In the United Kingdom, the carbonates of the Southern Permian
Basin have targeted and produced hydrocarbons both onshore and
offshore in the Southern North Sea Gas Basin. These carbonates have
been extensively explored and produced onshore in the Netherlands,
Germany and Poland, which provide several direct analogues for
PEDL183 and West Newton.
The Operator has undertaken a number of core, geochemical and
other studies in respect of the West Newton A-1 and A-2 wells and
re-evaluated the volumetrics of the West Newton Kirkham Abbey
reservoir, utilising information from the A1 and A-2 discoveries,
as well as 3D seismic data, the results of which:
-- Indicated a material upgrade in liquid hydrocarbons contained in the Kirkham Abbey formation
-- Base Case volumetrics of:
Liquids : 146.4 million barrels ("mmbbl") of stock tank oil
initially in place ("STOIIP")
and gas 211.5 billion cubic feet ("bcf") of gas initially in
place ("GIIP")
-- Upside Case volumetrics of:
Liquids: 283.0 mmbbl STOIIP and gas 265.9 bcf GIIP
David Bramhill, Executive Chairman of Union Jack, commented:
"We are pleased to report the progress that has been made to
understand better the significance of the West Newton discoveries,
to plan the resumption of the A-2 EWT and design of the drilling
programme for 2020 following extensive and painstaking technical
work executed by both Rathlin and Union Jack`s technical teams.
"Although highlighted in an RNS previously, what had become
apparent is the materiality of the size and scale of the liquid and
gas volumes in place at West Newton, which we believe are unique to
UK onshore and more representative of offshore North Sea
discoveries.
"West Newton remains one of Union Jack's flagship projects which
will be evaluated in further detail during 2020.
"In addition to West Newton, we also look forward in 2020 to
progressing work on our other advanced projects including first
production from the development at Wressle, subject to a favourable
decision from the Planning Inspectorate, progressing the ongoing
studies and appraisal of what we consider to be a material resource
at Biscathorpe, and making meaningful technical and corporate
progress at two other projects namely, the producing Keddington oil
field which we consider hold untapped value and at the drill-ready
North Kelsey Prospect, where we also have high expectations.
"There is still work to be done, however, the board is confident
it has excellent, value accretive projects, whose contribution will
become apparent during 2020 for which we are fully funded and we
look forward to reporting on our progress."
Competent Person`s Statement
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 46 years of international oil and gas
industry experience.
For further information, please contact:
+44 (0)7801 540
Union Jack Oil plc 358
David Bramhill
SP Angel Corporate Finance
LLP +44 (0)20 3470 0470
Nominated Adviser and Broker
Richard Morrison
Richard Hail
Stephen Wong
Blytheweigh Communications
Limited +44 (0)20 7138 3204
Financial PR
Tim Blythe
Megan Ray
Jane Lenton
+44 (0)7949 690
Cassiopeia Services Ltd 338
Public Relations
Stefania Barbaglio
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END
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