TIDMUJO
RNS Number : 5895Q
Union Jack Oil PLC
01 March 2021
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
1 March 2021
Union Jack Oil plc
("Union Jack" or the "Company")
Completion of a Further Acquisition of a 15% Interest in PEDL253
Biscathorpe
Submission of Planning Application for Side-track Drilling,
Testing and Production
Union Jack Oil plc (AIM: UJO), a UK focused onshore hydrocarbon
production, development and exploration company is pleased to
announce that it has completed the acquisition of a further 15%
economic interest in PEDL253 containing the Biscathorpe project
("Biscathorpe") on the terms originally announced on 18 January
2021 and that Union Jack now holds a 45% interest in PEDL253.
On the proposed conventional B-2Z side-track appraisal well, the
Company also highlights that a Planning Application has been made
for the side-track drilling operation, associated testing and, in a
success case, the long-term production of hydrocarbons at the
Biscathorpe-2 wellsite, with drilling planned for H2 2021, subject
to planning approval.
Highlights
-- PEDL253 is located within the proven hydrocarbon fairway of
the Humber Basin, on-trend with the Keddington oilfield (Union Jack
55% interest) which produces oil from a Carboniferous Westphalian
aged reservoir
-- Union Jack now holds a 45% interest in PEDL253 containing the Biscathorpe project
-- Oil bearing Dinantian Carbonate reservoir of 68 metres has
been confirmed by independent petrophysical analysis and
geochemical analyses of cuttings samples carried out by APT
confirms the presence of 33-34 API gravity oil
-- Dinantian carbonate oil play has Gross Mean Stock Tank Oil
Initially in Place ("STOIIP") of 24.3 million barrels of oil
("mmbo") with an upside of case of 36 mmbo
-- Evidence from reprocessed 3-D seismic for a thickened Basal
Westphalian Sandstone reservoir interval is apparent with Gross
Mean Prospective Resources associated with the Westphalian target
total 3.95 mmbo with an upside case of 6.69 mmbo and, where
economic modelling of the Westphalian target alone, yields
break-even full cycle economics estimated at US$18.07 per barrel
and a gross NPV(10) valuation of GBP55.6 million
-- Detailed technical evaluation by the PEDL253 Joint Venture
has identified an accessible drilling target on the Biscathorpe
Prospect and plans are advanced for drilling the proposed
conventional B-2Z side-track appraisal well during H2 2021, subject
to planning and other consents, that will allow both the Dinantian
Carbonate and Basal Westphalian Sandstone targets to be tested
-- Planning application submitted during February 2021 for
side-track drilling, testing and long-term production of
conventional B-2Z side-track appraisal well
Commenting, David Bramhill, Executive Chairman of Union Jack,
said:
"We are pleased to have taken this opportunity to have increased
our interest to 45% in PEDL253. Union Jack's technical team believe
that Biscathorpe represents a material and commercially viable
hydrocarbon resource that remains un-tested.
"The collective extensive technical information analysed over
the past months, combined with APT's conclusions on the likely
presence of good quality oil, have materially upgraded the resource
potential and economic value of the Biscathorpe project in our
view, further supporting our opinion that PEDL253 remains one of
the UK's largest onshore un-appraised conventional hydrocarbon
licences.
"We look forward to updating the market on drilling plans for
the conventional B-2Z side-track appraisal well currently planned
for H2 2021, subject to planning and other consents, that will
allow both the Dinantian Carbonate and Basal Westphalian Sandstone
targets to be tested.
"Any potential Biscathorpe oil development will be important to
the UK as any indigenous production delivers a lower carbon
footprint when compared to imported alternatives and it will also
provide additional economic benefits to both regional and local
communities."
Biscathorpe
Biscathorpe is located within the proven hydrocarbon fairway of
the Humber Basin, on-trend with the Keddington oilfield (Union Jack
55%) which produces oil from a Carboniferous Westphalian aged
reservoir.
The PEDL253 Joint Venture partnership has now completed
extensive and detailed studies of the Biscathorpe project,
including the reprocessing and remapping of 264 square kilometres
of 3-D seismic. This work has been integrated with the results of
the Biscathorpe-2 well, resulting in a significantly enhanced
understanding of the prospectivity within the Biscathorpe project
area. The results of this extensive exercise concluded that a
possible material and commercially viable hydrocarbon resource
remains to be tested.
Accessible target areas have been identified where evidence for
a thickened Basal Westphalian sandstone reservoir interval is
evident on the reprocessed 3-D seismic. These areas will be
targeted by a side-track of the existing Biscathorpe-2 well which
was suspended once drilling operations were concluded in 2019. The
planned side-track will also target the oil column logged in the
underlying Dinantian Carbonate in Biscathorpe-2 and as further
described below.
At the existing Biscathorpe-2 well, hydrocarbon shows with
background gas and sample fluorescence were observed over the
entire interval from the top of the Dinantian Carbonate to the
Total Depth of the well (an interval of over 157 metres) with a
total of 68 metres interpreted as being oil bearing in the
petrophysical analysis.
A geochemical analysis of the gas data and hydrocarbons
extracted from drill cuttings was originally commissioned by Union
Jack and carried out by Applied Petroleum Technology (UK) Limited
("APT"). The results of this analysis show a hydrocarbon column of
33-34 API gravity oil in the Dinantian Carbonate, comparable with
that produced at the nearby Keddington oilfield. An assessment of
the Dinantian oil volumes has also been modelled with volumetric
assumptions as being filled to spill and a proven likely live oil
column following the results of the APT exercise. The Gross Mean
STOIIP associated with the Dinantian Carbonate target area are
estimated by the Operator to 24.3 mmbo with an upside of case of 36
mmbo.
Although the Westphalian Sandstone objective was absent at the
Biscathorpe-2 well location, data evaluated at the base of the
analysed section were suggestive of possible extra hydrocarbon pay
at the lower end of the Dinantian interval. The Gross Mean
Prospective Resources associated with the Westphalian Sandstone
target area are estimated by the Operator to be 3.95 mmbo, with an
upside case of 6.69 mmbo. Preliminary economic modelling
demonstrates that the Westphalian target alone is economically
robust in the current oil price environment with break-even
full-cycle economics estimated at US$18.07 per barrel and a gross
NPV(10) valuation of GBP55.6 million.
The Operator has submitted, on behalf of the Joint Venture
partners, a Planning Application to Lincoln County Council ("LCC")
for planning permission for the side-track drilling operation,
associated testing and in a success case the long-term production
of hydrocarbons at the Biscathorpe-2 wellsite and that will allow
both the Dinantian Carbonate and Basal Westphalian Sandstone
targets to be tested.
As the proposed development was screened by LCC as being EIA
development, the application was accompanied by an Environmental
Statement. The planning application will now be validated before
LCC commences consultation on the proposals.
Interests held in PEDL253
Egdon Resources U.K. Limited ("Operator") 35.8%
Union Jack Oil plc 45.0%
Montrose Industries Limited 19.2%
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.
Evaluation of hydrocarbon volumes by the Operator on behalf of
the PEDL253 Joint Venture has been assessed in accordance with 2018
Petroleum Resources Management System (PRMS) prepared by the Oil
and Gas Reserves Committee of the Society of Petroleum Engineers
(SPE) and reviewed and jointly sponsored by the World Petroleum
Council (WPC), the American Association of Petroleum Geologists
(AAPG), the Society of Petroleum Evaluation Engineers (SPEE), the
Society of Exploration Geophysicists (SEG), the Society of
Petrophysicists and Well Log Analysts.
For further information, please contact:
Union Jack Oil plc Via Cassiopeia Services Ltd
David Bramhill
SP Angel Corporate Finance LLP +44 (0)20 3470 0470
Nominated Adviser and Broker
Richard Morrison
Richard Hail
Caroline Rowe
Cassiopeia Services Ltd +44 (0)7949 690 338
Public Relations
Stefania Barbaglio
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