TIDMUJO
RNS Number : 8074V
Union Jack Oil PLC
16 December 2021
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company`s obligations under Article 17 of MAR.
16 December 2021
Union Jack Oil plc
("Union Jack" or the "Company")
Operational and Financial Update
Union Jack Oil plc (AIM: UJO) a UK focused onshore hydrocarbon
production, development and exploration company, notes that the
Operator ("Egdon Resources plc") of several projects in which the
Company holds material interests has today updated the market on
their progress.
Union Jack is pleased to publish the highlights of this
operational review and a financial update;
Wressle PEDL180/182 (Union Jack 40% interest)
-- The Wressle-1 well continues to comfortably exceed initial
expectations of 500 barrels of oil per day (gross) since the
successful completion of the proppant squeeze and subsequent coiled
tubing operations on 19 August 2021
-- Works completed to upgrade the gas incineration system
-- Production site upgrades ongoing
-- Well flowing under a highly restricted choke of 20/64 of an inch
-- Well has produced high quality oil at a constrained rate
during ongoing upgrades at an average rate of 666 barrels of oil
per day ("bopd") following the upgrade of the gas incineration
system (266 barrels net to Union Jack) plus 368,000 cubic feet of
gas (147,200 cubic feet net to Union Jack) over the past seven
days, equating to a gross 727 barrels of oil equivalent per day
-- Zero formation water produced to date
-- Secondary separator system has been designed and manufactured
and is expected to be installed before the year end to optimise
gas/oil separation
-- Early 2022 will see completion of testing of the full potential of the well
-- Decisions will be made in Q1 2022 on the plateau production
rate, to match with longer-term operational objectives and prudent
reservoir management
-- Downhole pressure data has been acquired and is currently
being interpreted to further inform these decisions
-- Focus during 2022 will move to progressing the optimal method
of gas monetisation and finalising plans for the development of
other hydrocarbon bearing zones to access the identified material
contingent resources, with particular focus on the Penistone Flags
reservoir
Note: Up to date photo images of Wressle will be uploaded to the
Company`s twitter feed @UnionJackOilplc from 16 December 2021.
Keddington PEDL005(R) (Union Jack 55% interest)
-- An independent detailed sub-surface review of the Keddington
oil field and the surrounding licence area has highlighted an
opportunity to increase production via a new development side-track
well for which planning is already in place
-- Reservoir engineering work has been completed by ERCE
confirming a target area in the south-east of the licence area
which would add up to 85,000 to 120,000 barrels of recoverable oil
which could be produced and monetised using the existing production
equipment already in place and being utilised on site
-- Well specific modelling and detailed planning will be
completed in the coming period with a view to being in a position
to drill the side-track well during 2022
-- Additional near-field exploration opportunities have been
identified at Keddington South, (gross Mean Prospective Resources
of circa 635,000 barrels of oil (350,000 barrels net to Union Jack)
and the Louth Prospect (gross Mean Prospective Resources of circa
600,000 barrels of oil (circa 330,000 barrels net to Union Jack)
which could be accessed from the existing well site in due
course
Biscathorpe PEDL253 (Union Jack 45% interest)
-- On 1 November 2021, the planning application for a side-track
drilling operation, associated testing and long-term oil production
at the Biscathorpe site, was refused by Lincolnshire County Council
("LLC"), despite being recommended for approval by the Council`s
planning officers
-- The formal decision notice was issued on 6 December 2021 and
the Operator is currently reviewing in detail the reasons for
refusal with their planning and legal advisers and considering
other options which is likely to lead to an appeal
North Kelsey PEDL241 (Union Jack 50% interest)
-- Planning applications were submitted to LLC in early December
2021, to extend the existing planning consents by 12 months and
amend the bottom hole target location for the planned North Kelsey
well
-- The applications have now been validated and the consultation period has begun
-- Subject to receipt of planning consent the North Kelsey well could be drilled later in 2022
Financial Update
-- As of 16 December 2021, cash balance of GBP6,068,000
-- As of 16 December 2021, revenue and investment receivables
are an additional circa GBP600,000 (principally oil production and
North Sea royalty)
-- Projected revenues to 31 December 2021, expected to be
in-excess of GBP1,760,000 (2020 audited, GBP241,467 )
-- Net asset value as at 16 December 2021 is GBP20,281,000
-- Debt free
Executive Chairman of Union Jack, David Bramhill, commented:
"This timely operational and financial update provides tangible
confirmation of the progress being made by Union Jack.
"Wressle is still in the infancy of its development and despite
restricted flow and continuing site upgrades, net revenues to Union
Jack have been material since mid-August 2021. We announced on 27
October 2021, that Wressle had generated US$1,000,000 of net
revenues to the Company and we look forward to announcing the next
net revenue milestone early in 2022.
"When the planned site upgrades are complete, we await, with
anticipation, the scale of the net revenues available from Wressle
in respect of a full year of production as we believe these
contributions will be transformational for Union Jack. Keddington
and Fiskerton oil fields also provide additional revenue which
support our projected year end 2021, net revenues.
"This operational and financial update provides information on
the assets where Union Jack is in Joint Venture with Egdon
Resources plc. It is prudent to mention our 16.665% investment in
West Newton, of which drilling results and a series of extended
well tests have confirmed the presence of substantial onshore
hydrocarbon resources, within the Kirkham Abbey formation of the
West Newton A-1,A-2 and B1z wells. As previously announced, a
number of external studies are currently in process, encompassing a
wide range of reservoir analysis in order to offer direction on how
to achieve satisfactory and commercial flow rates from these wells.
Preliminary reports are encouraging and we would expect to be in a
position to offer a comprehensive update to the market in early
2022, on this material project that represents significant value
potential in our portfolio, once the first phase of this work has
been finalised.
"With the planned activity across our material projects, we
believe that there will be a steady stream of RNS announcements,
updates, research publications and reports published throughout
2022.
"Union Jack is in a sound position both operationally and
financially and we look forward to the future with enthusiasm."
For further information, please contact
Union Jack Oil plc
info@unionjackoil.com
David Bramhill
SP Angel Corporate Finance LLP +44 (0)20 3470 0470
Nominated Adviser and Broker
Richard Morrison
Richard Hail
Caroline Rowe
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END
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