Union Jack flies the flag for UK on­shore oil and gas

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The di­rec­tors of Union Jack Oil (UJO:AIM)

see the United King­dom on­shore as be­ing an at­trac­tive tar­get for in­vest­ment in hy­dro­car­bon projects where the com­pany is ac­tive in a rea­son­ably low­cost oper­at­ing en­vi­ron­ment and where the li­cens­ing regime is fully trans­par­ent.

The board of di­rec­tors are all very ex­pe­ri­enced in the oil sec­tor and have been in­volved for decades in the de­vel­op­ment and cor­po­rate ac­tiv­ity in re­spect of sev­eral en­ergy com­pa­nies, par­tic­u­larly within the UK on­shore arena.

Union Jack has adopted a low cost, non-oper­at­ing busi­ness model, typ­i­cally ac­quir­ing in­ter­ests in late stage projects, thus min­imis­ing risk and cost ex­po­sure to in­di­vid­ual wells which are con­sid­ered to have ex­cel­lent scope with the drill bit for fu­ture dis­cov­er­ies, the Bis­cathorpe-2 and West Newton ap­praisal wells planned to be drilled Q1 2019 be­ing prime ex­am­ples.

AS­SET OVER­VIEW

The com­pany has ac­quired in­ter­ests in 13 li­cences lo­cated in the East Mid­lands, South­ern Zech­stein and the Weald Basins, all be­ing es­tab­lished hy­dro­car­bon pro­duc­ing prov­inces. • PEDL180 and PEDL182 Wressle and Broughton North 27.5% in­ter­est • PEDL183 West Newton gas dis­cov­ery 16.66% in­ter­est • PEDL005(R) Ked­ding­ton oil­field 20% in­ter­est • EXL294 Fisker­ton Air­field oil­field 20% in­ter­est • PEDL181 Hum­ber Basin 12.5% in­ter­est

• PEDL143 Weald Basin 7.5% in­ter­est • PEDL253 Bis­cathorpe 22% in­ter­est

• PEDL241 North Kelsey 20% in­ter­est

IN­TRO­DUC­ING… UNION JACK OIL an AIM-quoted oil and gas pro­duc­tion and ex­plo­ration com­pany with a fo­cus on op­por­tu­ni­ties within the United King­dom on­shore hy­dro­car­bon sec­tor

• PEDL201 Wid­mer­pool Gulf 26.25% in­ter­est • PEDL209 Laughton

10% in­ter­est

• PEDL118 Dukes Wood 16.67% in­ter­est • PEDL203 Kirkling­ton 16.67% in­ter­est

The East Mid­lands, South­ern Zech­stein and Weald Basins are proven to have all the el­e­ments of com­mer­cial sys­tems, a source rock with suf­fi­cient or­ganic con­tent, ma­tu­rity, a vi­able mi­gra­tion path, a reser­voir and trap for­ma­tion.

Dur­ing 2018 the com­pany was on the ac­qui­si­tion trail and in­ter­ests in ad­di­tional and ex­ist­ing projects were pur­chased in­clud­ing an ad­di­tional 12.5% of the Wressle dis­cov­ery, await­ing de­vel­op­ment plan­ning, a fur­ther 10% of PEDL253 where the Bis­cathorpe-2 ap­praisal well will be drilled in early Jan­uary 2019 and a 16.665% in­ter­est in PEDL183 which holds the sig­nif­i­cant West Newton A-1 gas dis­cov­ery planned to be ap­praised in Q1 2019.

Dur­ing March 2018 Union Jack formed a com­mer­cial part­ner­ship with UK based Hum­ber Oil & Gas Lim­ited

and since that time has es­tab­lished an ex­cel­lent re­la­tion­ship go­ing for­ward with the joint ac­qui­si­tion of in­ter­ests in sev­eral high im­pact projects.

WEST NEWTON GAS DIS­COV­ERY

The ac­qui­si­tion of a 16.665% in­ter­est in PEDL183 con­tain­ing the sig­nif­i­cant West Newton A-1 on­shore gas dis­cov­ery from Rath­lin En­ergy (UK) Lim­ited brought com­pelling im­me­di­ate and fu­ture eco­nomic value to Union Jack in re­spect of the best es­ti­mate con­tin­gent re­sources of 189 bil­lion cu­bic feet of gas equiv­a­lent gross, as­signed to West Newton in a Com­pe­tent Per­sons Re­port.

The West Newton A-1 gas dis­cov­ery is on trend with the pro­lific off­shore Hewlett gas com­plex and is in close prox­im­ity to ex­ist­ing gas pipe­lines and other in­fra­struc­ture.

A well is planned to be drilled dur­ing Q1 2109 to ap­praise the con­ven­tional dis­cov­ery.

In ad­di­tion, a fur­ther oil prospect below the gas reser­voir, the lower Cadeby reef ex­plo­ration tar­get with Best Es­ti­mate Prospec­tive Re­sources of 79.1 mil­lion bar­rels (gross) will be pen­e­trated.

BIS­CATHORPE-2 AP­PRAISAL WELL

Bis­cathorpe is one of the UK`s largest on­shore con­ven­tional oil prospects with Mean Prospec­tive Re­sources of 14 mil­lion bar­rels gross and a ge­o­log­i­cal chance of suc­cess of 40%. Union Jack holds a mean­ing­ful 22% li­cence in­ter­est.

The com­pany`s eco­nomic mod­el­ling of the Bis­cathorpe prospect high­lights its at­trac­tive­ness and shows a pre-drill value for a suc­cess case of circa £24m net to Union Jack.

Fol­low­ing com­ple­tion of site con­struc­tion in De­cem­ber 2018 the drill rig is ex­pected to be mo­bilised in early Jan­uary 2019.

Bis­cathorpe is one of Union Jack`s near term high im­pact projects where a suc­cess­ful out­come could be trans­for­ma­tional.

NEWS FLOW THROUGH­OUT 2019

The com­pany has a bal­anced port­fo­lio of pro­duc­tion, de­vel­op­ment and drill-ready projects which in­cludes the fully funded Bis­cathorpe-2 con­ven­tional ap­praisal well where drill-pad con­struc­tion work is at an ad­vanced stage and drilling is planned to com­mence in Jan­uary 2019 and an ap­praisal well at West Newton to test the sig­nif­i­cant West Newton A-1 dis­cov­ery is planned to be drilled in Q1 2019.

Ad­min­is­tra­tive and gen­eral costs are low, and the com­pany re­mains debt free and has in ex­cess of £2m in cash.

The com­pany`s strat­egy of fo­cus­ing on con­ven­tional rel­a­tively low risk and low­cost on­shore pro­duc­tion, de­vel­op­ment and ex­plo­ration drilling, avoid­ing early stage and fron­tier projects is al­ready show­ing signs of com­ing to fruition and al­lows an op­por­tu­nity for in­vestors to be­come in­volved at the end of the ex­plo­ration and be­gin­ning of de­vel­op­ment cy­cles in a com­pany likely to gen­er­ate plenty of news flow through­out 2019.

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