LONDON (Alliance News) - The London-listed companies involved in the onshore Keddington field in the UK on Monday said they have started drilling the latest development well that is targeting over half a million barrels of oil.
Egdon Resources PLC and Union Jack Oil PLC released statements confirming the Keddington-5 development well is being drilled. Egdon is the operator of the field located in Lincolnshire with a 45% stake whilst Union Jack holds a 10% stake in the field.
Nautical Petroleum Ltd, a wholly owned subsidiary of London-listed Cairn Energy PLC, also holds a 10% stake in the field, but Cairn did not release a statement concerning the well on Monday. The other partner on the field with the other 35% stake is Terrain Energy Ltd.
The companies believe there is a considerable amount of oil underneath the previously drilled Keddington-4 well. The Keddington-5 well is a sidetrack from Keddington-4 and is targeting the 309,000 to 566,000 barrels that are thought to be lying underneath Keddington-4.
"We are pleased to report the commencement of drilling operations at Keddington-5 and look forward to the potential for increased production and profitability from this mature field," said Egdon Managing Director Mark Abbott.
Union Jack is paying 20% of the costs of the Keddington-5 well as part of its earn-in agreement on the field. Union Jack also will pay 20% of the costs of the Louth exploration well on the field, which will be drilled either in 2016 or 2017. Union Jack's contribution towards the costs of the Keddington-5 sidetrack well will be financed from existing cash resources.
"Union Jack, with over GBP3.0 million of cash and debt free, will continue to participate in attractive projects such as Keddington that offer realistic chances of success and the opportunity to add to its asset base at moderate cost," said Union Jack Chairman David Bramhill.
Egdon shares were trading down 11% to 8.10 pence per share on Monday morning, whilst Union Jack shares were down 5.0% to 0.114p. Cairn Energy shares were down 1.7% to 129.10p.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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