Union Jack Share News (UJO)

(Sharecast News) - UK-focussed onshore hydrocarbon operator Union Jack Oil updated the market on its investment in the West Newton A-2 conventional appraisal well, located within the PEDL183 licence, on Thursday.
The AIM-traded firm holds a 16.665% interest in the licence, which is operated by Rathlin Energy UK and contains the West Newton A-1 discovery well and the West Newton A-2 appraisal well.

It said the operator and project partners now believed that the West Newton project represented a "significant" oil and gas discovery, rather than a "pure" gas discovery, as originally perceived.

The evaluation of West Newton A-2 open hole data had identified an estimated gross hydrocarbon column of approximately 65 metres in the Kirkham Abbey formation.

Union Jack said the initial petrophysical evaluation had identified a gross oil column of around 45 metres, underlying a gross gas column of about 20 metres within the Kirkham Abbey interval.

With the indication of a "potentially significant" oil column, the extended well test had been temporarily suspended in order to review and revise the well test design, to deliver the necessary test information to validate the resource .

Following the integration and evaluation of the core, petrophysical, seismic and test data, Union Jack said the operator and partners intended to commission a revised competent persons report to reassess volumetrics and revise net present value numbers, based on the information acquired from the West Newton A-2 well.

"The confirmation of a major oil discovery at the West Newton project is highly encouraging compared to its original perception as a substantial gas discovery," said Union Jack Oil executive chairman David Bramhill.

"We now await a revised competent persons report that Union Jack expects will provide details on the oil in place, gas in place and recoverable volumes.

"Given the positive value implications of a major onshore oil development, rather than predominantly gas as originally believed, we expect this will also lead to a meaningful uplift in the net present value calculations in the revised competent persons report."

Bramhill explained that the extended well test would now be paused to allow the test equipment to be reconfigured to design and implement a revised production test, which he said would better reflect the increased liquid hydrocarbon content of the production fluid.

"We believe this to be necessary in order to maximise the information derived from this extended well test information to drive this important onshore oil project forward.

"We now believe that West Newton will become a significant oil development project for Union Jack, our joint venture partners and for the onshore UK hydrocarbon industry."