LONDON (Alliance News) - Union Jack Oil PLC Monday said it has completed the acquisition of a 10% stake in a UK licence which includes the Keddington oilfield from fellow-listed Egdon Resources PLC.
The completion follows on from the pair signing an agreement back in July, whereby Union Jack acquired a 10% stake in the PEDL005 licence in Lincolnshire, which includes the already producing Keddington oilfield.
Both companies released separate statements confirming the deal, under which Union Jack will pay 20% of the costs of a new sidetrack Keddington well which will be drilled in the fourth quarter of 2015.
Union Jack also will pay 20% of the costs for the proposed Louth-1 exploration well which will be drilled in either 2016 or 2017. Union Jack said it would fund the costs of the two wells from existing resources.
Keddington has produced in excess of 300,000 barrels of oil to date and is currently producing approximately 30 to 35 barrels of oil per day gross with associated gas from two wells, Keddington-4 and Keddington-3Z.
Following the deal, Egdon Resources will hold a 45% stake and remain as operator of the Keddington field, with Union Jack holding its 10% stake. Terrain Energy Ltd has a 35% stake and Nautical Petroleum Ltd holds the balance.
Union Jack shares were down 3.0% to 0.160 pence per share on Monday morning, whilst Egdon shares were down 0.3% to 9.10 pence per share.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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