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West Newton Farm-in Agreement Signed

5 Nov 2018 07:00

RNS Number : 2709G
Union Jack Oil PLC
05 November 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

 

 

5 November 2018

 

Union Jack Oil plc

("Union Jack" or the "Company")

Farm-in Agreement for a 16.665% Interest in PEDL183 Containing Major West Newton Gas Discovery

 

The Directors of Union Jack Oil plc (AIM: UJO) are pleased to announce that, further to entering into a Heads of Agreement as announced on 3 October 2018, the Company has now signed a farm-in agreement with Rathlin Energy (UK) Limited ("Rathlin"), a wholly owned subsidiary of Canadian registered Connaught Oil & Gas Ltd ("Connaught"), for a 16.665% licence interest in PEDL183 (the "Farm-in"). PEDL183 is located onshore UK in East Yorkshire and within the Western sector of the Southern Zechstein Basin and contains the significant West Newton A-1 gas discovery (Best Estimate Contingent Resource 189 Bcfe or 31.5 MMboe gross), where the drill-ready West Newton conventional appraisal well is planned to be drilled in Q1 2019.

Farm-in Highlights

· Acquiring a 16.665% interest in the large 176,000 acre PEDL183 licence containing the significant West Newton A-1 UK onshore gas discovery

· Best Estimate Contingent Resources of 189 Bcf of gas equivalent or 31.5 million barrels of oil equivalent (gross) assigned to West Newton in a Competent Persons Report

· West Newton A-1 gas discovery is on-trend with the prolific offshore Hewett gas complex

· Proximity to existing gas pipelines and infrastructure

· Drill-ready conventional appraisal well planned to be drilled in Q1 2019 to appraise the gas discovery

· Appraisal well to be fully funded from existing cash resources

· Compelling immediate and future economic value from a development of the gas discovery alone

· Operator's NPV10% of US$247 million and 52.5% ROR for the gas discovery alone

· Attractive acquisition metrics of less than US$0.30 per barrel of oil equivalent for the gas discovery alone

· Considerable upside potential from the lower Cadeby Reef oil exploration target underlying the gas reservoir that will also be drilled, with Best Estimate Prospective Resources of 79.1 million boe (gross)

· Further significant upside potential from numerous other prospects and leads

· A successful appraisal well in Q1 2019 is expected to deliver a major onshore gas development

David Bramhill, Executive Chairman of Union Jack, commented:

"We are pleased to be able to confirm the Farm-in to PEDL183 containing the material West Newton gas discovery that represents a significant project technically and is compelling financially for Union Jack has now been signed. 

"The drilling of the material West Newton conventional appraisal well, where success is expected to deliver a significant onshore gas development project, will be transformational for Union Jack.

"We look forward to working with Rathlin, as Operator, and Humber Oil & Gas Limited ("Humber"), as our Commercial Partner, and drilling the West Newton conventional appraisal well in order to firm up the project's significant potential and, upon a successful appraisal well, progress to a Field Development Plan. On completion of this Farm-in, Union Jack can book immediately 5.3 million barrels of oil equivalent Contingent Resources to its existing reserve and resource portfolio and once a Field Development Plan is in place, West Newton's Contingent Resources can be converted to Reserves.

"In addition to our ongoing commitment to develop the Wressle oil discovery, and plans to commence drilling of the material conventional Biscathorpe-2 oil appraisal well later this quarter, the Farm-in and drilling of West Newton in Q1 2019 puts Union Jack in an even stronger position to deliver growth in reserves, production and asset value while adhering to our principles of strict financial and technical discipline."

Frazer Lang, Director of Humber, and Union Jack's Commercial Partner, commented:

"PEDL183 is one of the largest onshore licences within the UK and we are delighted to be investing in parallel in this project alongside our Commercial Partner, Union Jack.

"The conventional West Newton appraisal well is planned to be drilled in Q1 2019 and, if successful, the effect will be transformational for both Union Jack and Humber.

"Humber is also pleased to be partner in the Wressle oil discovery and also a participant in the Biscathorpe-2 appraisal well planned to be drilled soon

"Success in any one of these stand-alone projects would change materially the dynamics of both Union Jack and Humber."

Further information on the Farm-in

The Farm-in is subject to the normal Oil and Gas Authority regulatory approval process and certain precedents being satisfied.

On completion, the interests held in PEDL183 will be:

Rathlin Energy (UK) Limited (Operator)

66.67%

Union Jack Oil plc

16.665%

Humber Oil & Gas Limited

16.665%

 

For further information on the West Newton gas discovery and PEDL183 please visit the Union Jack website www.unionjackoil.com where the following information can be found:

· the announcement by Union Jack on the Rathlin Farm-in and Fundraising dated 3 October 2018

· the "Rathlin Opportunity" presentation dated October 2018

· the Executive Summary extracted from the Competent Person`s Report prepared by Deloitte LLP, an independent petroleum engineering firm that conforms to SPE-PRMS guidelines, dated 25 July 2017

 

Commercial Partner Participation

Union Jack has an established relationship with Humber which forms the basis of an ongoing Commercial Partnership whereby both parties seek to co-invest in UK onshore hydrocarbon opportunities. The first such commercial collaboration was the acquisition of a combined 20% economic interest in PEDL253 containing the Biscathorpe-1 oil discovery where the conventional appraisal well Biscathorpe-2 is planned to be drilled Q4 2018. 

The second significant commercial collaboration between Union Jack and Humber is the Farm-in for a combined 33.3% economic interest in PEDL183, where Humber has also entered into a Definitive Agreement on identical terms to that of Union Jack that will result in each of Union Jack and Humber acquiring a 16.665% interest.

In addition to the commercial collaborations between Humber and Union Jack, Humber's Executive Director Frazer Lang, is beneficially interested in 1,267,606,538 Ordinary Shares of the Company held by G.P. (Jersey) Limited representing 15% of the issued share capital of the Company

Competent Person's Statement

In accordance with the "AIM Rules - Note for Mining and Oil and Gas Companies", the information contained within the announcement has been reviewed and signed off by Graham Bull, Non-Executive Director, who has over 46 years of international oil and gas industry exploration experience.

 

For further information, please contact:

Union Jack Oil plc

+44 (0)7787 160 682

David Bramhill

 

 

 

SP Angel Corporate Finance LLP

+44 (0)20 3470 0470

Nominated Adviser

 

Lindsay Mair

 

Richard Hail

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
AGRFZLLBVFFXFBB
Date   Source Headline
27th Sep 20167:00 amRNSAcquisition of Additional Interest in Wressle
26th Sep 20167:00 amRNSCompetent Person's Report
22nd Sep 20167:00 amRNS£700,000 Placing
5th Sep 20167:00 amRNSHalf-year Report
24th Aug 20167:00 amRNSNotice of Results
4th Jul 20167:00 amRNSChanges to Licence Terms
27th Jun 20167:00 amRNSExtension of Licence PEDL 143
22nd Jun 201611:54 amRNSResult of AGM
13th Jun 20167:00 amRNSAcquisition of Interest in PEDL182
23rd May 20167:00 amRNSAcquisition of Interest in PEDL143
16th May 20167:00 amRNSFinal Results
26th Apr 20167:00 amRNSNotice of Results
14th Mar 20161:00 pmRNSCompletion of Drilling - Laughton-1 Well
2nd Mar 20167:00 amRNSInvestor Presentation
18th Feb 20167:00 amRNSInvestor Presentation - 2 March 2016
15th Feb 20167:00 amRNSCommencement of drilling operations
8th Feb 20167:00 amRNSKeddington-5 Development Well
26th Jan 20167:00 amRNSAcquisition of Interest in PEDL209
18th Jan 20167:00 amRNSCommencement of Drilling Operations
17th Dec 20152:20 pmRNSAcquisition of Interest in Block TF38c
27th Oct 20157:00 amRNSPlacing for £800,000
22nd Oct 20157:00 amRNSWressle Oil and Gas Discovery: Update
28th Sep 20157:00 amRNSHalf Yearly Report
21st Sep 20157:00 amRNSCompletion of Acquistion of Interest in PEDL005
4th Sep 20158:54 amRNSWressle-1 Update and Forward Plan
21st Jul 20157:00 amRNSWressle-1 Extended Well Test Update
14th Jul 20157:00 amRNSAcquisition of Interest in PEDL005(R)
25th Jun 201512:18 pmRNSResult of AGM
22nd Jun 20157:00 amRNSFurther Acquisition of Interest in Biscathorpe
18th Jun 20157:00 amRNSWressle-1 Commencement of Extended Well Test
5th Jun 20157:00 amRNSPEDL241 - Acquisition of Additional Interest
22nd May 20157:00 amRNSPosting of Annual Report and Notice of AGM
18th May 20157:00 amRNSFinal Results
27th Mar 20157:00 amRNSUPDATE ON WRESSLE-1 WELL TESTING
16th Mar 20153:00 pmRNSPlanning permission granted for Biscathorpe-2
3rd Mar 20157:00 amRNSUpdate on Wressle-1 Well Testing
19th Feb 20157:00 amRNSUpdate on Wressle-1 Well Testing
9th Feb 20157:00 amRNSUpdate on Wressle-1 Well Testing
9th Dec 20147:00 amRNSPlanning Permission granted for North Kelsey
4th Dec 20147:00 amRNSUpdate on Timing of Wressle-1 Well Testing
30th Oct 201410:15 amRNSCompletion of drilling - Burton on the Wolds
21st Oct 20147:00 amRNSCommencement of Drilling Operations
20th Oct 20147:00 amRNSHydrocarbon Portfolio Update
9th Oct 20147:00 amRNSExercise of Warrants
7th Oct 20147:00 amRNSExercise of Warrants
1st Oct 20147:00 amRNSWarrant Exercise and Director Dealing
29th Sep 20147:00 amRNSHalf Yearly Report
25th Sep 201412:00 pmRNSResult of General Meeting
18th Sep 20147:00 amRNSTiming Update - Burton on the Wolds-1
15th Sep 20147:00 amRNSBoard Changes

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