Union Jack Oil PLC Acquisition of Interest in Fiskerton Airfield (5925V)
November 06 2017 - 2:00AM
UK Regulatory
TIDMUJO
RNS Number : 5925V
Union Jack Oil PLC
06 November 2017
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.
6 November 2017
UNION JACK OIL PLC
(AIM: UJO)
Acquisition of Interest in Producing Fiskerton Airfield Oilfield
EXL294
Union Jack Oil plc ("Union Jack" or the "Company"), a UK-focused
onshore oil and gas production and exploration company, is pleased
to announce that it has signed a Sale and Purchase Agreement (the
"Agreement"), to acquire from Egdon Resources plc (the "Operator")
a 20% economic interest in licence EXL294 containing the producing
Fiskerton Airfield Oilfield ("Fiskerton").
The cash consideration for the 20% interest, payable from
existing cash resources, is approximately GBP137,000. This figure
includes a pro rata share of the Operator`s legal, licence,
planning and acquisition costs.
The Company's initial review of historic 3D seismic and drill
logs suggests that there is upside potential in the oil resources
at Fiskerton. Union Jack will fund a 3D seismic re-processing
exercise on behalf of the Joint Venture to assist in re-mapping the
area over approximately 24 square kilometres surrounding Fiskerton
to identify further production opportunities from the reservoir. It
is estimated that initial interpretations from the 3D seismic
re-processing will be available during H1 2018. The cost of this
exercise to Union Jack will be GBP35,000.
The effective date of the agreement is 3 November 2017 and Union
Jack will receive 20% of all production revenues from Fiskerton
from that date.
Completion of the acquisition is subject to Oil and Gas
Authority approval.
Following completion of the transaction, the interests held in
EXL294 will be:
Egdon Resources plc (Operator) 80%
Union Jack Oil plc 20%
EXL294, containing Fiskerton, is located approximately seven
miles east of the City of Lincoln. Fiskerton was discovered in 1997
and cumulative production has totalled approximately 440,000
barrels of oil from the most likely mapped Oil in Place of 2.2
million barrels. The oil is of good quality (35.2deg API) and is
exported by road tanker to a refinery at Immingham, North East
Lincolnshire.
Fiskerton is currently producing circa 16 barrels of oil per day
("bopd") from one of two production wells (FA-3). The second
production well (FA-1) is shut-in awaiting a workover. Fiskerton
also has a dedicated water disposal well (FA-2) to re-inject any
produced water into the reservoir for pressure support.
Fiskerton has suffered from a marked lack of investment over the
years. Prior to acting on the initial interpretations from the 3D
seismic re-processing, the joint venture partners plan to enhance
the cash flows and profitability of Fiskerton by increasing
production initially to between 30 and 40 bopd via low cost well
interventions. Workover operations are planned on both the
producing FA-3 and the shut-in FA-1 wells during the next few
months including the installation of new tubing, pumps and the
isolation of water producing zones.
Subject to the results of 3D seismic re-processing, the joint
venture partners will investigate the potential to increase further
production through in-fill drilling.
David Bramhill, Executive Chairman of Union Jack commented:
"The Board is delighted with the acquisition of the attractive
producing Fiskerton Oilfield at a modest cost given the upside
potential that we believe possible and expect will be borne out in
the results of the proposed 3D seismic re-processing.
As with our recent increased interest in the producing
Keddington Oilfield, Fiskerton adds additional oil production and
cash-flow to Union Jack.
I am sure that shareholders will support and welcome Union
Jack's intention to have a more "hands on approach" to progressing
the many attractive opportunities in our existing portfolio and in
relation to evaluating further acquisitions of production
opportunities.
In the meantime, we continue to work with our partners on
progressing the drill-ready Biscathorpe-2 and Holmwood-1
exploration wells, combined with a continued focus on the
significant oil discovery at Wressle and its associated appeal in
order to bring it into production. While we await the outcome of
these events, Union Jack will continue to evaluate and, where
appropriate, be innovative in progressing opportunities in its
existing portfolio and in evaluating new acquisition
opportunities."
AIM Rule Disclosure
The acquisition of the interest in the Fiskerton Airfield
Oilfield is a substantial transaction as defined in the AIM Rules
for Companies (the "AIM Rules"). Owing to a lack of historical
financial information available to the Company on the previous
operator's activities at the oil field, the Company is not able to
provide disclosure on the profits or losses attributable to the
interest in the Fiskerton Airfield Oilfield, as required by the AIM
Rules for substantial transactions. Union Jack has a thorough
understanding of current and likely future operating costs on the
field and the costs of the planned workovers. The Company will
record the acquisition in its books at the purchase cost.
For further information, please contact:
Union Jack Oil plc +44 (0)7787 160 682
David Bramhill
SP Angel Corporate Finance
LLP +44 (0)20 3470 0470
Nominated Adviser and
Joint Broker
Lindsay Mair
Stephen Wong
Richard Hail
Turner Pope Investments
(TPI) Ltd +44 (0)20 3621 4120
Joint Broker
Ben Turner
James Pope
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 47 years of international oil and gas
industry experience.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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