RNS15 May 2018 08:20
Union Jack Oil PLC
15 May 2018
�
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
�
15 May 2018
�
Union Jack Oil plc
("Union Jack" or the "Company")
Acquisition of Further Interest in Widmerpool Gulf Licence (PEDL201)
Acquisition of Interest in Humber Basin Licence (PEDL181)
�
Union Jack Oil plc (AIM: UJO), a UK-focused onshore hydrocarbon production, development and exploration company is pleased to announce that it has entered into a sale and purchase agreement with Celtique Energie Petroleum Limited whereby Union Jack and its Commercial Partner Humber Oil & Gas Limited ("Humber Oil & Gas" or "Commercial Partner") will each make an investment to acquire a 16.25% interest in PEDL201 ("Widmerpool Gulf") and a 12.5% interest in PEDL181 ("Humber Basin") for a cash consideration of �7,500 each ("Consideration").
This is the second investment made by the Company alongside its Commercial Partner in low cost onshore oil and gas licences.� Both licences have no immediate conventional or unconventional work programme commitments or planned activities.
PEDL201 is located in the Widmerpool Gulf and PEDL181 is located in the Humber Basin. �The licences are contained within a wider area that, according to studies published by the British Geological Society ("BGS") on behalf of the Oil & Gas Authority ("OGA"), are considered prospective for both oil and gas; the report (The Carboniferous Bowland Shale gas study: geology and resource estimation, DECC 2013) is available from the OGA's website.
Internationally, horizontal drilling and specialised completion technologies in tight formations have permitted extensive unconventional developments in both oil and gas, most notably in the United States. �Potential in-place volumes on the licences could represent significant economic value, even if only recovery factors at the low end of those achieved in the US can be replicated in the UK onshore.
As an indication of the potential economic value of the licences, and while valuations are dependent on a number of factors, not least the ability to be able to operate successfully, Edison Investment Research Limited ("Edison") recently published equity research on implied values for unconventional UK onshore activities based on recently observed transaction valuations, that ranged between US$614 - US$2,200 per acre (Focus on UK shale - a low-cost option; 30 April 2018). �
Edison's value range applied to Union Jack's net acreage in PEDL201 and PEDL181
Licence Area
Edison Value Range (US$/acre)
Interest (%)
Net
Acreage
Implied V