Union Jack Oil acquires further 15% interest in PEDL253
(UJO ) said it has acquired a further 15% economic interest in PEDL253 containing the Biscathorpe project, thereby raising its overall interest in the licence to 45%.
The UK focused onshore hydrocarbon production company agreed to acquire the further 15% economic interest in PEDL253 from Humber Oil & Gas Limited back in January 2021.
UJO has paid £0.5m for the 15% interest in PEDL253 which is located in the proven hydrocarbon fairway of the Humber Basin, on-trend with the Keddington oilfield (UJO holds a 55% interest in), which produces oil from a Carboniferous Westphalian aged reservoir.
“UJO’s technical team believe that Biscathorpe represents a material and commercially viable hydrocarbon resource that remains un-tested,” said Executive Chairman, David Bramhill.
Bramhill added that he believes this further supports the Company’s opinion that PEDL253 remains one of the UK's largest onshore un-appraised conventional hydrocarbon licences.
He said, “The collective extensive technical information analysed over the past months, combined with APT's conclusions on the likely presence of good quality oil, have materially upgraded the resource potential and economic value of the Biscathorpe project in our view.”
To date, an oil bearing Dinantian Carbonate reservoir of 68 metres has been identified by independent petrophysical analysis and geochemical analyses of cuttings samples carried out by Applied Petroleum Technology ("APT"), confirming the presence of 33-34 API gravity oil.
The Group said the dinantian carbonate oil play has Gross Mean Stock Tank Oil Initially in Place ("STOIIP") of 24.3 million barrels of oil ("mmbo") with an upside case of 36 mmbo.
Meanwhile, the Company also unveiled to investors this morning that it has now submitted a planning application regarding the proposed conventional B-2Z side-track appraisal well.
Specifically, the planning application will cover the Company’s side-track drilling operation, associated testing and, in a success case, the long-term production of hydrocarbons at the Biscathorpe-2 wellsite, with drilling planned for 1H21, subject to planning approval.
The Group’s submission follows a previous technical evaluation undertaken by the PEDL253 Joint Venture which identified an accessible drilling target on the Biscathorpe Prospect.
"Any potential Biscathorpe oil development will be important to the UK as any indigenous production delivers a lower carbon footprint when compared to imported alternatives and it will also provide additional economic benefits to both regional and local communities.”
Shares in Union Jack Oil were trading 1.27% higher this morning at 0.16p following the news. The Company’s enlarged interest in the project follows several analyses over the past months which have ‘materially upgraded the resource potential and economic value of the project.’ The Company is now planning to drill the B-2Z side-track appraisal well in H2 2021.
Reasons to Follow UJO
West Newton
The UK focused onshore hydrocarbon explorer holds a 16.665% interest in PEDL183, containing the conventional West Newton A-1 discovery well and WNA-2 appraisal well.
West Newton is located at the heart of the Zero Carbon Humber project area, which aims to promote decarbonising technologies across industrial activities in the wider Humber region.
In October 2020, it reported that the onshore West Newton B-1 ("WNB-1") well - the next well following the successful West Newton A-2 ("WNA-2") appraisal well - had been spud.
Results from the drilling of WNB-1 are expected to inform a subsequent programme of testing to establish the well's productive capability as well as future drill operations.
North Kelsey
In recent months, UJO also increased its stake in the North Kelsey project by acquiring an additional 30% from Egdon Resources, taking its stake in the exploration project up to 50%.
Further financial obligations will be equal between Union Jack and Egdon Resources, in line with both parties’ 50% stake in the North Kelsey Prospect which is located in Lincolnshire.
The North Kelsey Prospect is a conventional oil prospect along trend from and analogous to the Wressle oil development, which lies around 15 kilometres to the northwest.
The UK- focused group said the prospect has been mapped from 3-D seismic data and has the potential for oil in up to four stacked conventional Carboniferous reservoir targets.
David Bramhill, Executive Chairman of UJO, described North Kelsey as “a low cost, drill-ready onshore acquisition for Union Jack in our focus area, consistent with our strategy.”
He said a further stake in the project increases the group’s exposure to a “potentially value adding project” as well as expanding UJO’s balanced drilling and development portfolio.
Subject to a successful farm-out, North Kelsey-1 is expected to be drilled during 2021.
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