TIDMUJO TIDMUJOP
RNS Number : 7423K
Union Jack Oil PLC
26 September 2016
UNION JACK OIL PLC
(AIM: UJO)
Competent Person's Report on the Wressle-1 Discovery in PEDL180
and PEDL182 and the Broughton North Prospect in PEDL182, Onshore
UK
Union Jack Oil plc ("Union Jack" or the "Company"), an onshore
oil and gas exploration and production company with a focus on
exploration, production, development and investment opportunities
in the United Kingdom hydrocarbon sector, is pleased to provide
summary details from a Competent Person's Report ("CPR") dated
September 2016 prepared by ERC Equipoise Ltd ("ERCE" or "Competent
Person"). ERCE has made independent estimates of the Reserves,
Contingent and Prospective oil and gas Resources associated with
the Wressle-1 discovery in PEDL180 and PEDL182 and the Broughton
North Prospect in PEDL 182, located onshore Lincolnshire on the
western margin of the Humber Basin. Union Jack holds an 8.33%
economic interest in both licences for which Egdon Resources U.K.
Limited is the operator ("Operator").
ERCE's summary of the findings of their CPR including the
definitions of the terms used in this announcement has today been
published on the Company's website, www.unionjackoil.com.
Highlights:
Wressle Reserves and Development Update
-- Oil and gas Reserves and Contingent Resources identified by
the Competent Person in aggregate exceed the Operator's original
pre-drill estimates
-- Gross P Mean Oil Discovered Initially In Place ("OOIP") is
14.18 million stock tank barrels in aggregate across three
reservoir sands, the Ashover Grit, Wingfield Flags and Penistone
Flags, of which 2.15 million stock tank barrels are classified as
discovered (2P+2C)
-- Gross 2P oil Reserves of 0.62 million stock tank barrels in
aggregate identified across two reservoir sands, the Ashover Grit
and Wingfield Flags that form the basis of the initial development
plan which currently excludes development of the material Penistone
Flags reservoir sands
-- The initial development plan utilising the Wressle-1
discovery well has been submitted to the Oil & Gas Authority
("OGA") and for which a planning application is currently being
considered by the North Lincolnshire Council
-- Commercial oil production is expected to commence in early
2017 at an estimated 500 barrels per day gross and generate
significant net cash flow
-- Gross 2P gas Reserves of 0.2 billion standard cubic feet
-- Development options and production planning for the Penistone
Flags reservoir are expected to be progressed following
commissioning of the initial Wressle development and will include
monetisation of the produced gas by pipeline or electricity
generation which will be sold to the National Grid.
Substantial Contingent Resources in the Penistone Flags
Confirmed
-- Substantial Contingent Resources have also been confirmed by
the Competent Person in the Penistone Flags reservoir at Wressle
that are over and above the oil and gas Reserves identified in the
Ashover Grit and Wingfield Flags reservoirs
-- The Penistone Flags reservoir has gross oil 2C Contingent
Resources of 1.53 million stock tank barrels and 2.0 billion
standard cubic feet of gas
-- The Competent Person highlights that the Penistone Flags
reservoir was oil bearing in the Wressle-1 discovery well and also
in the Broughton-B1 exploration well approximately two kilometres
to the north west that was drilled by BP in 1984, and tested oil
from the Penistone Flags reservoir at a rate of approximately 40
barrels per day. The gross thickness of the Penistone Flags
reservoir sand is 26 metres in the Broughton-B1 exploration well
and 29 metres in the Wressle-1 discovery well and it is expected to
be laterally extensive
-- Development options and timing of production plans from the
Penistone Flags reservoir are expected to be progressed following
commissioning of the Wressle development
-- The conversion of the Penistone Flags 2C Contingent Resources
of 1.53 million stock tank into 2P Reserves, in full or in part, is
expected to occur following receipt of necessary development
approvals and commencing production at the Wressle development and
once a subsequent development plan has been identified for the
Penistone Flags reservoir
-- The Board intend to apply the net cash flows generated from
the initial Wressle development to finance the development of the
Penistone Flags reservoir
Broughton North Prospect Prospective Resources
-- The Broughton North Prospect has an undiscovered OOIP of 3.43
million stock tank barrels, gross unrisked Mean Prospective
Resources of 0.51 million stock tank barrels and 0.51 bcf of gas in
aggregate across two reservoir sands, the Ashover Grit and
Penistone Flags
-- Broughton North is a drill-ready prospect, subject to obtaining planning permission
-- The Broughton North Prospect benefits from the results of the
Wressle-1 oil and gas discovery and the Broughton-B1 exploration
well that significantly reduces the geological risk over PEDL180
and PEDL182. Consequently ERCE attribute a high Geological Chance
of Success ("COS") with a range of 40% to 49% for the prospect
-- Mapping of the Broughton North Prospect also benefits from
the same high quality 3D seismic data as was used to identify the
Wressle-1 oil and gas discovery
-- Funding for an exploration well on the prospect will be
assisted by the significant net cash flows to be generated from
commercial production from the initial Wressle development
The gross numbers mentioned above are summarised with the net
Union Jack interests in the following table:
Net Volumes
Gross attributable
Volumes to Union Jack
Oil Oil
Oil Gas Equiv Oil Gas Equiv
MMstb bcf MMboe MMstb bcf MMboe
---------------------------- ------- ----- ------- ------------------- ----- --------
2P Ashover Grit
and Wingfield Flags 0.62 0.20 0.65 0.05 0.02 0.05
2C Penistone Flags 1.53 2.00 1.86 0.13 0.17 0.16
Broughton North
Mean Unrisked Prospective
Resources 0.51 0.51 0.60 0.04 0.04 0.05
---------------------------- ------- ----- ------- ------------------- ----- --------
The interests held in both PEDL180 and PEDL182 are:
Egdon Resources U.K.
Limited (Operator) 25.00%
Celtique Energie Petroleum
Limited 33.33%
Europa Oil & Gas Limited 33.34%
Union Jack Oil plc 8.33%
David Bramhill, Executive Chairman of Union Jack, commented:
"The CPR highlights the attractions of the proposed onshore
development at Wressle which is due on-stream in early 2017 at an
estimated constrained 500 barrels per day gross that is expected to
generate considerable net cash flow over its life. The initial
Wressle development is a particularly attractive project in the
current oil price environment as it has the benefits of modest low
capital costs and low operating costs.
We are also highly encouraged by the additional Resources
identified in the Penistone Flags reservoir at Wressle as these
additional Resources are not currently part of the initial Wressle
development plan but are expected to be developed at a later date.
The thickness of the oil bearing Penistone Flags sands of between
26 metres to 29 metres make this reservoir an attractive
incremental development opportunity following on from commencement
of commercial production under the initial Wressle development
plan.
Similarly, the additional Resources identified in the Broughton
North Prospect, contain reservoirs to which the CPR has assigned a
high geological chance of success, and funding for a future
exploration well will benefit from the significant net cash flows
generated by the initial Wressle development as well as having
access to the planned Wressle-Penistone production facilities in a
cluster-style development given its close proximity".
For further information, please contact:
Union Jack Oil plc
David Bramhill +44 (0) 77871 60682
Shore Capital
Nominated Adviser
Edward Mansfield
Anita Ghanekar
Corporate Broking
Jerry Keen +44 (0) 20 7408 4090
SP Angel
Joint Broker
Richard Hail +44 (0) 20 3470 0470
Yellow Jersey PR
Limited
Public Relations
Dominic Barretto
Aiden Stanley +44 (0) 7768 537 739
In accordance with the "AIM Rules - Note for Mining and Oil and
Gas Companies", the information contained within the announcement
has been reviewed and signed off by Graham Bull, Non- Executive
Director, who has over 46 years of international oil and gas
industry exploration experience.
ERCE have carried out this work using the March 2007
SPE/WPC/AAPG/SPEE Petroleum Resources Management System (PRMS) as
the standard for classification and reporting. The report is
compliant with the AIM Rules - Note for Mining and Oil and Gas
Companies.
This information is provided by RNS
The company news service from the London Stock Exchange
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