(AIM: UJO)
Acquisition of Interest in PEDL005(R) Incorporating the Keddington Oilfield
Union Jack is not paying any up-front cash consideration to earn a 10 per cent. economic interest in PEDL005(R) from Egdon. Under the terms of the Acquisition Union Jack has agreed to pay:
· 20 per cent. of the costs of the proposed new Keddington side-track appraisal/development well, scheduled to be drilled in Q4 2015; and
· 20 per cent. of the costs of the Louth-1 exploration well currently planned for 2016/2017.
Union Jack's contribution towards the costs of the side-track appraisal/development well at Keddington will be financed from existing cash resources.
HIGHLIGHTS:
· The Acquisition complements the Company's existing activities in north east
· Keddington has produced in excess of 300,000 barrels of oil to date and is currently producing approximately 30 to 35 barrels of oil per day gross;
· Should the proposed new appraisal/development well be successful the Board believes that the production rate at Keddington has the potential to increase to approximately 125 barrels of oil per day gross;
· On completion of the Acquisition, Union Jack will own 10 per cent. of the existing infrastructure at Keddington and will immediately receive 10 per cent. of all production revenues;
· The farm-in to PEDL005(R) additionally provides Union Jack with a 10 per cent. interest in the Louth and North Somercotes prospects; and
· The Acquisition provides Union Jack with the opportunity to become involved in a relatively low risk existing development play which the Directors consider to hold high upside potential.
Acquisition
Keddington has produced in excess of 300,000 barrels of oil to date and is currently producing approximately 30 to 35 barrels of oil per day gross with associated gas from two wells, Keddington-4 and Keddington-3Z.
Planning permission is in place for a new appraisal/development well that is currently planned to be drilled as a side-track to the Keddington-4 well in Q4 2015. Should this well be successful, the Board believes that the production rate at the Keddington has the potential to increase to approximately 125 barrels of oil per day gross.
On completion of this transaction Union Jack will own a 10 per cent. interest in Keddington and the associated infrastructure and production facilities. Additionally, Union Jack will immediately receive 10 per cent. of all production revenues going forward.
The Operator is seeking to maximise the value of the "Greater Keddington" area through two additional drill-ready prospects located within PEDL005(R) namely Louth and North Somercotes. As part of the Acquisition, Union Jack will obtain a 10 per cent. interest in the Louth and North Somercotes prospects.
Under the terms of the Acquisition, Union Jack would also earn a 10 per cent. interest from Egdon in any new licence block awarded to the existing PEDL005(R) joint venture group in the
The Operator believes that a "Greater Keddington" development plan concept using existing Keddington infrastructure and facilities will enhance the economics of individual exploration prospects and potential in comparison to evaluating them as stand-alone developments.
Louth Prospect
The Louth conventional oil prospect is located mostly within PEDL005(R) and extends into the neighbouring currently unlicensed acreage.
Located on the margins of the
A well to test this prospect is planned to be drilled in 2016/2017 subject to receipt of planning and other consents.
North Somercotes Prospect
Located on the margins of the
On completion of this agreement and a second agreement between
|
Keddington Oilfield |
PEDL005(R) Excluding Keddington |
|
45% |
65% |
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10% |
10% |
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35% |
15% |
|
10% |
10% |
"We are pleased about the addition of Keddington to our existing portfolio as it delivers an opportunity to be involved in a relatively low-risk oil production and development play with significant upside potential.
The Board believes this acquisition to be a natural next step in respect of our strategy as Union Jack transitions from an exploration company to a production company with the prospect of increased production should the new Keddington side-track well, planned for Q4 2015, be successful and following completion of the current Extended Well Test at the Wressle-1 in order to confirm its commerciality.
The acquisition of interests in the Louth and North Somercotes prospects is also in line with the Board's focus on expanding our exploration portfolio of onshore low-cost drill-ready targets in the north east
For further information please contact the following:
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+44 (0) 77871 60682 |
Shore Capital Nominated Adviser Bidhi Bhoma Corporate Broking |
+44 (0) 20 7408 4090 |
SP Angel Joint Broker Richard Hail
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+44 (0) 20 3470 0470 |
Public Relations |
+44 (0) 7768 537 739 +44 (0) 7799 003 220 |
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This information is provided by RNS