TIDMUJO
RNS Number : 8400Q
Union Jack Oil PLC
24 June 2020
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
24 June 2020
Union Jack Oil plc
("Union Jack" or the "Company")
Further Interest Acquired in PEDL 253 Biscathorpe
Settlement Reached with Humber Oil & Gas Limited
Union Jack Oil plc (AIM: UJO), a UK focused onshore hydrocarbon
production, development and exploration company is pleased to
announce the acquisition of a further 3% of PEDL253 containing the
Biscathorpe project and the signing of a legally binding and
confidential settlement agreement (the "Settlement Agreement")
between Egdon Resources U.K. Limited (acting on behalf of the joint
venture partners) and Humber Oil & Gas Limited ("Humber").
Union Jack advises that the joint parties to PEDL253 have resolved
the dispute arising under the Joint Operating Agreement and look
forward to co-operating in the future in the development of the
licence.
Union Jack is pleased to also announce that it has entered into
a Sale and Purchase Agreement with Montrose Industries Limited
("Montrose") to purchase a further 3% interest in PEDL253 which
following the implementation of the terms of the Settlement
Agreement, increases the Company`s economic interest to 30%. The
consideration for the additional interest is GBP115,000 which will
be paid from the Company`s existing cash resource.
Upon completion of the Montrose acquisition and implementation
of the Settlement Agreement, the interests held in PEDL253 will be
as follows:
Egdon Resources U.K. Limited (Operator) 35.8%
Union Jack Oil plc 30.0%
Montrose Industries Limited 19.2%
Humber Oil & Gas Limited 15.0%
David Bramhill, Executive Chairman of Union Jack Oil plc
commented: "We are pleased to have been offered this opportunity to
increase our interest to 30% in Biscathorpe, where a potentially
material and commercially viable hydrocarbon resource remains to be
tested.
"The collective extensive technical information analysed over
the past several months, combined with the APT conclusions on the
likely presence of good quality oil have materially upgraded the
resource potential and economic value of the project, upholding our
opinion that PEDL253 remains one of the UK's largest onshore
un-appraised conventional hydrocarbon licences.
Having retained the wellsite, the joint venture has preserved
its optionality to pursue a cost-effective side-track to test the
resource potential of not only the Basal Westphalian Sandstone play
and also to appraise the oil column demonstrated in the deeper
Dinantian Carbonate reservoir.
We are pleased that agreement has been reached with Humber,
enabling the project now to move forward with full support from all
partners.
"We look forward to providing further updates to shareholders as
the Biscathorpe project develops."
Biscathorpe
Biscathorpe is located within the proven hydrocarbon fairway of
the Humber Basin, on-trend with the Saltfleetby gasfield and
Keddington oilfield (Union Jack 55%) which produces oil from a
Carboniferous Westphalian aged reservoir, the principal target at
Biscathorpe.
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 in 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 Westphalian sandstone reservoir interval is evident on
the reprocessed 3-D seismic. These areas can 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.
The Mean Prospective Resources associated with the Westphalian
target area are estimated by the Operator, Egdon Resources plc to
be 3.95 million barrels of oil (mmbbls), with an upside case of
6.69 mmbbls. Preliminary economic modelling demonstrates that the
Westphalian target is economically robust in the current oil price
environment with break-even full-cycle economics estimated at
$US18.07 bbl and a gross NPV10 valuation of GBP55.6 million.
The Westphalian objective was absent at the Biscathorpe-2 well
location, however, hydrocarbon shows with background gas and sample
fluorescence were observed over the entire interval from the top of
the Dinantian to the Total Depth ("TD") of the well (an interval of
over 157 metres) with a total of 57 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.
Mean Stock Tank Oil Initially in Place within the Dinantian has
been calculated to be 24.3 mmbbls with an upside case of 36
mmbbls.
Although the Dinantian is not considered to be the primary
target, should there be effective permeability, or the presence of
fractures within this section, there is the possibility of a
further commercially viable play being present within the
Biscathorpe licence area that would add considerable resource
upside over and above the principal Westphalian target.
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 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 (SPWLA) and
the European Association of Geoscientists & Engineers
(EAGE).
For further information, please contact:
Union Jack Oil plc +44 (0)78 0154 0358
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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END
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