West Newton project exceeds expectations after being confirmed as a major oil discovery
AIM-listed and share prices both rose strongly this morning following positive news from the West Newton A-2 appraisal well, located in Humberside, onshore UK.
Both companies own economic interests in the well, with Investment firm, Reabold, holding a 24% interest via its 36% holding in Rathlin Energy, the operator of the well, whilst UK-focused hydrocarbon company Union Jack Oil holds a direct 16.665% interest in the well’s licence.
Shares in Reabold Resources shot up over 20% following this morning's news.
The operator, Rathlin, alongside its project partners now believe that the West Newton project represents a significant oil and gas discovery rather than a pure gas discovery as originally perceived back in June.
They now estimate that within the 65m gross hydrocarbon column, approximately 45 metres could potentially be oil which is underlying a gross gas column of 20 metres.
Stephen Williams, Co-CEO of Reabold, commented, "The realisation that we appear to have a 45 metre oil column is a significant and exciting development in the evaluation of this cornerstone asset.”
Due to the potentially significant oil column, the extended well test has been temporarily suspended for review and revision to validate it as an important onshore resource.
David Bramhill, Executive Chairman of Union Jack also commented, "The confirmation of a major oil discovery at the West Newton project is highly encouraging compared to its original perception as a substantial gas discovery.”
Shares Union Jack Oil also saw a rise, surging over 10% following the annoucement.
The Operator and partners now intend to commission a revised Competent Person’s Report (CPR) to reassess volumetrics and possibly revise up the current NPV10.
Mr Williams added: “We particularly look forward to further analysis and testing results, as well as a proposed updated CPR, as, alongside our partners, we establish the optimum forward programme to maximise value out of this field for Reabold shareholders.”
Mr Bramhill acknowledged the discovery positively, commenting, “Given the positive value implications of a major onshore oil development, rather than predominantly gas as originally believed, we expect this will also lead to a meaningful uplift in the NPV10 calculations in the Revised CPR.”
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