Union Jack Oil completes proppant squeeze operation at Wressle development 

Francesca Morgan
Vox Newswire
11:00, 29th July 2021

Union Jack Oil (UJO FOLLOW) told investors that the proppant squeeze operation on the Ashover Grit reservoir interval in the Wressle-1 well has now been completed “safely and successfully.” 

The Wressle oilfield development, located in North Lincolnshire, is covered by the PEDL180 and PEDL182 licences. Union Jack holds a 40% economic interest in this development. 

The UK-focused onshore hydrocarbon exploration group previously informed investors back in June 2021 that there had been a delay affecting the progression of the proppant squeeze operation as a result of the contractor's equipment being held on a job that had overrun.  

"Whilst delays are a function of current business dislocations, we do not regard this as a material event in terms of ongoing progress at Wressle," said Mark Abbott, Managing Director of Egdon Resources which holds a 30% interest in the Wressle oilfield development. 

Last week, the Group said all necessary consents have now been received to commence the proppant squeeze operation at the Wressle oil production site located in North Lincolnshire. 

UJO said the upcoming proppant squeeze operation is expected to optimise oil production from the Ashover Grit formation, one of the three productive reservoirs present, to a constrained rate of 500 barrels of oil per day gross (200 barrels per day net to Union Jack).  

Today, Union Jack said a total of 146 cubic metres of gelled fluid with 17.3 tonnes of ceramic proppant were injected into the Ashover Grit formation in line with the authorised programme.  

The Company highlighted that no health, safety, environmental or security issues were experienced during the operations; and as predicted, real time monitoring confirmed there was no induced seismicity and that the noise levels were well within the permitted limits. 

It said the operation was subject to a pre-operational inspection by the Health and Safety Executive and active monitoring by the Environment Agency. Ground and surface water monitoring has continued in accordance with the requirements of the Environmental Permit. 

The Company confirmed to investors that all equipment and personnel associated with the operation has now been demobilised from the site. Union Jack said the Wressle-1 well will now be subject to a coiled tubing operation to fully clean the production tubing prior to bringing the well back into production through the permanently sited production facilities. 

Based on the implemented programme, pre-operational simulation modelling concluded that the proppant squeeze operation would result in constrained flow rates of 500 barrels of oil per day (gross). 

Union Jack said it will report on the stabilised flow rates achieved following the proppant squeeze and coiled tubing operations once the well is brought back into production. 

View from Vox 

Wressle is believed to be economically robust with an estimated project break-even price oil price of $17.62 per barrel and expected to result in an initial constrained production rate of 500 barrels of oil per day gross, or 200 barrels of oil per day net to Union Jack. Positive news on production at Wressle is positive for UJO as a 40% shareholder in the project.  

Shares in Union Jack Oil have increased by over 10% in value since the beginning of 2021. The stock was trading 0.15% lower this morning at 34p following the announcement. 

Insert SP chart. 

UJO is an onshore oil and gas exploration firm with a focus on drilling, development and investment opportunities in the UK hydrocarbon sector, and currently holds interests in 13 licences in areas including, inter alia, the East Midlands, Humber Basin and East Yorkshire.  

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.   

Wressle   

In recent months, Operator, Egdon Resources U.K. Limited, commenced operations to re-complete and reperforate the well located at the Wressle hydrocarbon development site.  

The Ashover Grit reservoir is expected to produce 500 barrels of oil per day at a constrained rate, increasing UJO’s net production by an additional 200 bopd when fully on stream.  

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Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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