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.
6 February 2024
Union Jack Oil plc
("Union Jack" or the
"Company")
Farm-in Agreement in West Bowlegs
Drilling Project, Oklahoma, USA
Union Jack Oil plc (AIM: UJO), a predominantly
UK focused onshore hydrocarbon production, development and
exploration company is pleased to announce, further to its
announcement dated 29 January 2024, that the Company has signed a
farm-in agreement with Reach Oil & Gas Company Inc ("Reach"),
to acquire a 45% working interest in a well planned to be drilled
during Q2 2024, to test the West Bowlegs Prospect ("West Bowlegs")
and in an area of associated interest, located in Seminole County,
Oklahoma, USA.
·
Andrews-1 well planned to be drilled in early Q2 2024, with a
geological chance of success estimated by the Operator (Reach) to
be 75%
·
Approximate ten-day drilling period to a depth of 5,200
feet
·
Completion time is swift; approximately eight days including
perforating and flow-back if successful
·
Recently acquired proprietary 3D seismic covering the proven
producing Hunton Limestone, one of the main hydrocarbon reservoirs
in Oklahoma
·
Union Jack to pay 60% of costs of the Andrews-1 well to earn
a 45% economic interest
·
Going forward, the cost of further planned wells will be
based on the Company's 45% economic interest
·
Further drill ready prospects covered by 3D seismic
identified within interest area earned by Union Jack
·
Strategic partnership with Reach offers the opportunity to
access a wider inventory of prospects and further drill-ready
targets in Oklahoma
·
Seismic acquisition and planning costs of US$347,000 are
payable by Union Jack
· Cost
for drilling and completion of the Andrews-1 well is estimated to
be approximately US$516,000 net to Union Jack
·
Costs to be paid from existing cash resources
The target for this well is the Hunton
Limestone, one of the main hydrocarbon reservoirs in
Oklahoma. The Hunton Limestone is unconformably overlain by
the main oil-prone source rock, the Woodford Shale and is in an
excellent position for the migration of oil. Oil-filled
porosity is encountered within a basal Oolite limestone formation
in wells within a mile of the first drill location for the
Andrews-1 well and this is believed to be the main reservoir within
West Bowlegs.
West Bowlegs is associated with a remnant of
the Hunton Limestone and is expected to be at original pressure
with the seal for the reservoir being the Woodford Shale and
lateral seal against the underlying Sylvan Shale.
Primary oil recovery is expected to be by
solution gas drive with any gas recovered to surface being sold
into the local network.
Reach is an accredited operator in the USA,
owning and operating oil and gas production facilities in Seminole
and Pottawatomie Counties in Oklahoma. All prospects are generated
by Reach which owns modern seismic equipment, supplied by a UK
based company Stryde Limited.
Gneiss Energy has acted as financial adviser to
this transaction.
David
Bramhill, Executive Chairman, commented: "As
indicated in the announcement dated 29 January 2024, I am delighted
to be able to announce the execution of the agreement with Reach
for our initial near-term drilling operation in Seminole County,
Oklahoma.
"The Andrews-1 well has a high chance of
success and if proven commercial could be in production within one
month or sooner from spudding. Similar low-cost development
wells nearby, typically produce initially at approximately 150
barrels of oil and over 200 thousand cubic feet of gas per day and
can provide rapid pay-back within six months.
"The West Bowlegs transaction meets our
criteria of acquiring material interests in projects with near-term
planned drilling and capable of adding significant cash-flow, while
complementing our existing profitable production and development
interests onshore UK.
"Our strategic partnership with Reach offers
Union Jack the opportunity to access a wider portfolio of prospects
and drill-ready targets.
"I look forward to reporting to shareholders on
this new phase in the growth of Union Jack, further near-term
project interest acquisitions and the spudding of the Andrews-1
well in early Q2 2024."
Miles Newman,
Chairman of Reach, commented: "We acquired the
West Bowlegs 3D seismic survey, which is very close to our existing
production operations with our state-of-the art Stryde seismic node
system and have mapped several interesting prospects.
"Reach is focused on generating drilling
opportunities on the US onshore that can benefit from modern 3D
seismic.
"We are very pleased to expand our activities
with Union Jack onshore US."
For
further information, please contact the
following:
Union Jack Oil
plc
info@unionjackoil.com
David Bramhill
Reach Oil & Gas Company Inc
Miles
Newman
miles@reachoil-gas.com
Jim
McKenny
jmckenny@reachoil-gas.com
SP
Angel Corporate Finance LLP
+44
(0)20 3470 0470
Nominated Adviser and Joint Broker
Matthew Johnson
Kasia Brzozowska
Caroline Rowe
Richard Hail
Shore
Capital
+44 (0)20 7408 4090
Joint Broker
Toby Gibbs
Iain Sexton
Gneiss Energy
Limited
+44 (0)20 3983
9263
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Jon Fitzpatrick
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7138 3204
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