Last checked at 13 Sep 2022 07:00
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.
13 September 2022
Union Jack Oil plc
("Union Jack" or the "Company")
Gaffney Cline Report
Reserves and Contingent Resources of the Wressle Oilfield PEDL180 and PEDL182
Illustrative Production Scenario
Upside Potential
Union Jack Oil plc (AIM: UJO), the UK focused onshore hydrocarbon production, development and exploration company, is pleased to announce that Gaffney, Cline & Associates Limited ("GaffneyCline") has prepared an independent Reserves and Contingent Resources report with an Effective Date of 30 June 2022, on the Wressle Oilfield, PEDL180 and PEDL182, onshore United Kingdom. Included in this work was the development of an Illustrative Production Scenario for the potential future development of the field that includes the Contingent Resources. In addition, an independent assessment of the upside potential of the producing Ashover Grit and the Santon Sands horizons was undertaken.
HIGHLIGHTS
· Ashover Grit Speculative Deeper Oil-Water Contact assessment indicates a potentially significant increased estimate of STOIIP ("Stock Tank Oil Initially in Place") of 10.12 million barrels of oil ("MMBbl") and a recoverable resource of 2.43 MMBbl
· The Wressle-1 well also indicated the hydrocarbon potential of the Santon Sandstone where GaffneyCline has estimated a Contingent Resource
· Illustrative Production Scenario shows a constrained plateau production rate of 800 barrels of oil per day for approximately five years
· Ashover Grit and Wingfield Flags oil reserves at the Effective Date of 30 June 2022 stood at 1P 320,000, 2P 670,000 and 3P 1,030,000 barrels of oil following past production of 203,000 barrels of high-quality oil with zero water cut
An abridged version of the Report is presented and the full Report can be viewed on the Company's website www.unionjackoil.com
In addition, an animated PowerPoint highlighting the key points of the Report can also be viewed on the Company's website.
The Report has been prepared exclusively for Union Jack and its content does not necessarily reflect the Operators or other Partner views.
In the preparation of the Report, GaffneyCline has adopted the Petroleum Resources Management System ("PRMS") standard and used definitions contained therein.
GaffneyCline has approved this RNS and PowerPoint presentation.
RESERVES AND CONTINGENT RESOURCES OF THE WRESSLE OILFIELD
Licence Summary and Ownership Details
The Wressle oilfield is located within licences PEDL180 and PEDL182 in Lincolnshire on the Western Margin of the Humber Basin.
Union Jack holds a 40% economic interest in these licences.
Licence Ownership Details
Licence | Holders (WI) | Operator | Area (km2) | Award Date | Expiry Date |
PEDL180 | Union Jack Oil plc (40%) Egdon Resources U.K. Limited (30%) Europa Oil and Gas Limited (30%) | Egdon | 40 | 1 July 2008 | 1 July 2039 |
PEDL182 | Union Jack Oil plc (40%) Egdon Resources U.K. Limited (30%) Europa Oil and Gas Limited (30%) | Egdon | 19 | 1 July 2008 | 1 July 2039 |
Wressle Oilfield Oil Reserves as at 30 June 2022
Reservoir | Gross (MMBbl) | Net to Union Jack (MMBbl) | ||||
1P | 2P | 3P | 1P | 2P | 3P | |
Ashover / Wingfield | 0.32 | 0.67 | 1.03 | 0.17 | 0.27 | 0.41 |
The remaining 2P reserves of 0.67 MMBbl compares to initial gross 2P reserves of 0.62 MMBbl as originally reported in the Company's announcement of 26 September 2016. This figure is post past production of 203,000 barrels of oil.
Wressle Oilfield Contingent Resources as at 30 June 2022
Reservoir | Gross (MMBbl) | Net to Union Jack (MMBbl) | ||||
1C | 2C | 3C | 1C | 2C | 3C | |
Penistone Flags | 0.85 | 1.56 | 2.74 | 0.34 | 0.62 | 1.10 |
Santon Sandstone | 0.03 | 0.06 | 0.11 | 0.01 | 0.02 | 0.04 |
Gross Contingent Resources are 100% of the volumes estimated to be recoverable from the discovery if it is developed.
The volumes reported here are "unrisked" in the sense that no adjustment has been made for the risk that the discovery would not be developed in the form envisaged or not at all (i.e. no "Chance of Development" factor has been applied).
Wressle Oilfield Gas Contingent Resources as at 30 June 2022
Reservoir | Gross (Bscf) | Net to Union Jack (Bscf) | ||||
1C | 2C | 3C | 1C | 2C | 3C | |
Ashover Grit | 0.21 | 0.44 | 0.67 | 0.08 | 0.18 | 0.27 |
Penistone Flags | 0.95 | 1.98 | 2.52 | 0.38 | 0.79 | 1.01 |
Wingfield Flags | 0.03 | 0.05 | 0.11 | 0.01 | 0.02 | 0.04 |
Santon Sandstone | 0.06 | 0.11 | 0.20 | 0.02 | 0.04 | 0.08 |
The associated gas from the Ashover Grit and Wingfield Flags production is classified as Contingent Resources as no method to monetise these resources is currently in place. Contingent Resource estimates take into account gas production to effective date.
The volumes reported here are "unrisked" in the sense that no adjustment has been made for the risk that the discovery would not be developed in the form envisaged or not at all (i.e. no "Chance of Development" factor has been applied).
Wressle Oilfield: Estimates of Gross Technically Recoverable Resources ("TRR")
Reservoir | Oil TRR (MMBbl) | Gas TRR (Bscf) | ||||
Low | Best | High | Low | Best | High | |
Ashover Grit | 0.39 | 0.77 | 1.58 | 0.22 | 0.43 | 0.87 |
Wingfield Flags | 0.04 | 0.08 | 0.16 | 0.05 | 0.08 | 0.15 |
Penistone Flags | 0.85 | 1.56 | 2.74 | 0.95 | 1.98 | 3.52 |
Santon Sandstone | 0.03 | 0.06 | 0.11 | 0.01 | 0.02 | 0.04 |
Cumulative production to 30 June 2022 is 203 MBbl of oil and 116 MMscf of gas.
ASHOVER GRIT AND SANTON SANDS UPSIDE POTENTIAL
Ashover Grit Deeper Oil-Water Contact
There remains uncertainty about the extent and size of the Ashover Grit trap. Mapping of the Ashover Grit at the Wressle oilfiled by GaffneyCline using the 3D seismic data indicates that the spill-point of the trap could be deeper than the oil-down-to ("ODT") derived from log data used in the estimation of Reserves. However, a water-up-to ("WUT") in the deeper part of the Ashover Grit in the Wressle-1 well at 1,622m TVDss is deeper than the closure. Therefore, the trapping mechanism and spill-point are uncertain and may be deeper than the values used in the Reserves estimation. These results provide a potentially significant increased STOOIP estimate and potentially recoverable volumes. Not all of the volumes may be recoverable from the Wressle-1 location.
Single Deterministic Estimate for Deeper Oil-Water Contact Scenario
Reservoir | STOIIP | Recoverable |
(MMBbl) | (MMBbl) | |
Ashover Grit (Deeper Oil-Water Contact) | 10.12 | 2.43 |
The volumes estimated use the same reservoir parameters as the Reserves estimates for the Ashover Grit with the exception of the Gross Rock Volume estimate
A recovery factor of 24% is assumed.
Santon Sandstone Upside Potential
The Wressle-1 well also indicated the hydrocarbon potential of the Santon Sandstone. This reservoir requires further data to be obtained during future drilling in the field before any development can be planned, however this provided additional future potential. This formation was not tested in the Wressle-1 well.
Santon Sandstone Contingent Oil Resources
Reservoir | Gross (MMBbl) | Net to Union Jack (MMBbl) | ||||
1C | 2C | 3C | 1C | 2C | 3C | |
Santon Sandstone | 0.03 | 0.06 | 0.11 | 0.01 | 0.02 | 0.04 |
Santon Sandstone Contingent Gas Resources
Reservoir | Gross (Bscf) | Net to Union Jack (Bscf) | ||||
1C | 2C | 3C | 1C | 2C | 3C | |
Santon Sandstone | 0.06 | 0.11 | 0.20 | 0.02 | 0.04 | 0.08 |
Future Development of the Wressle Oilfield and Illustrative Oil Production Profile
The Wressle-1 well is currently producing oil and gas from the Ashover Grit reservoir.
The current field development Plan ("FDP") envisages that along with continued production from the Ashover Grit and Wingfield Flags, the Penistone Flags reservoir is developed with two or three additional wells.
Based on the reserves and contingent resources identified in the Report, an Illustrative Production Scenario shows that a constrained plateau production rate of 800 barrels of oil per day may be possible for approximately five years.
There is significant uncertainty on the initial flowrate that will be obtained from the Penistone Flags reservoir and that, whilst the observation that 800 barrels of oil per day may be possible for approximately five years and is based in part on the recent FDP, this Illustrative Production Scenario does not necessarily reflect the Operator's or the other Partner's views.
Executive Chairman of Union Jack David Bramhill, commented: "The GaffneyCline Report reflects a serious technical effort over a prolonged period and its content is highly encouraging for the future of the Wressle development.
"GaffneyCline's findings, observations and technical work in respect of the potential upside in respect of the Ashover Grit reservoir have gone a long way in answering our questions regarding future potential upside and prolonged productivity.
"The Illustrative Production Profile indicates robust and material productivity for at least five years and beyond. Should the Deeper Oil-Water Contact potential of the Ashover Grit reservoir become proven, the incremental value of Wressle as a development would be transformational for the Wressle partners.
"The current Reserves at the Ashover Grit and Wingfield Flags in respect of 2P figures according to GaffneyCline stands at 670,000 bbls of oil as at 30 June 2022. This figure is post past production figures of 203,000 bbls of oil, a substantial upgrade to the originally reported recoverable Reserve.
"Union Jack thanks GaffneyCline for their diligence in compiling this excellent, informative, and value adding report."
About GaffneyCline
GaffneyCline is an international energy consultancy, which has been operating worldwide since 1962. GaffneyCline focuses solely on the petroleum and energy industry and specialises in the provision of policy, strategy, technical and commercial assistance to governments, financial institutions, and international oil, gas and energy companies worldwide.
The provision of Energy Transition and Carbon Intensity Assessment have recently been added as a core component of GaffnyCline's international business.
(www.gaffneycline.com)
Glossary
Standard Oil Industry Terms and Abbreviations
Bbl | Barrels |
Bopd | Barrels oil per day |
Bscf or Bcf | Billion standard cubic feet |
°C | Degrees Celsius |
E&P | Exploration and production |
km | Kilometres |
km2 | Square kilometres |
m | Metres |
M | Thousand |
m3d | Cubic metres per day |
MD | Measured depth |
MM | Million |
MMBbl | Millions of barrels |
MMcf or MMscf | Million standard cubic feet |
p.a. | Per annum |
PRMS | Petroleum Resources Management System |
P10 | Value with a 10% probability of being exceeded |
P50 | Value with a 50% probability of being exceeded |
P90 | Value with a 90% probability of being exceeded |
RF | Recovery factor |
scf | Standard cubic feet |
scfd | Standard cubic feet per day |
So | Oil saturation |
stb | Stock tank barrel |
STOIIP | Stock tank oil initially in place |
Sw | Water saturation |
TD | Total depth |
TRR | Technically Recoverable Resources |
TVDss | True vertical depth subsea |
1C | Low estimate of Contingent Resources |
2C | Best estimate of Contingent Resource |
3C | High estimate of Contingent Resources |
2D | Two dimensional |
3D | Three dimensional |
1P | Proved Reserves |
2P | Proved plus Probable Reserves |
3P | Proved plus Probable plus Possible Reserves |
For further information, please contact
Union Jack Oil plc info@unionjackoil.com
David Bramhill
SP Angel Corporate Finance LLP +44 (0)20 3470 0470
Nominated Adviser and Joint Broker
Matthew Johnson
Richard Hail
Caroline Rowe
Shore Capital +44 (0)20 7408 4090
Joint Broker
Toby Gibbs
Iain Sexton