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
15 May 2018
Union Jack Oil plc
("Union Jack" or the "Company")
Acquisition of Further Interest in Widmerpool Gulf Licence (PEDL201)
Acquisition of Interest in Humber Basin Licence (PEDL181)
Union Jack Oil plc (AIM: UJO), a
This is the second investment made by the Company alongside its Commercial Partner in low cost onshore oil and gas licences. Both licences have no immediate conventional or unconventional work programme commitments or planned activities.
PEDL201 is located in the Widmerpool Gulf and PEDL181 is located in the Humber Basin. The licences are contained within a wider area that, according to studies published by the British Geological Society ("BGS") on behalf of the Oil & Gas Authority ("OGA"), are considered prospective for both oil and gas; the report (The Carboniferous Bowland Shale gas study: geology and resource estimation, DECC 2013) is available from the OGA's website.
Internationally, horizontal drilling and specialised completion technologies in tight formations have permitted extensive unconventional developments in both oil and gas, most notably in
As an indication of the potential economic value of the licences, and while valuations are dependent on a number of factors, not least the ability to be able to operate successfully, Edison Investment Research Limited ("Edison") recently published equity research on implied values for unconventional
Edison's value range applied to Union Jack's net acreage in PEDL201 and PEDL181
|
Licence Area |
Edison Value Range (US$/acre) |
Interest (%) |
Net |
Implied Value (US$mm) |
||
(acres) |
Lower |
Upper |
|
(acres) |
Lower |
Upper |
|
PEDL201 |
19,768 |
614 |
2,200 |
26.25 |
5,189 |
3.2 |
11.4 |
PEDL181 |
39,314 |
12.50 |
4,914 |
3.0 |
10.8 |
||
Total |
59,083 |
|
|
|
10,104 |
6.2 |
22.2 |
Applying Edison's unconventional acreage value ranges to Union Jack's licence interests, implies a value range between
David Bramhill, Executive Chairman of Union Jack commented:
"We are delighted to have been able to make a further investment in attractive licences in the Widmerpool Gulf and Humber Basin at nominal cost, alongside our Commercial Partner, Humber Oil & Gas.
"Union Jack will hold these licences as an investment given the Board's view that they both have significant value upside given the potential for future unconventional oil and gas exploration activities in the
"While further work will need to be undertaken by the onshore oil and gas industry in the
Completion of the acquisition of the licence interests is subject to OGA approval.
On completion, the interests held in PEDL201 will be:
Egdon Resources |
45.00% (operator) |
Union Jack Oil plc |
26.25% |
Humber Oil & Gas Limited |
16.25% |
Terrain Energy Limited |
12.50% |
On completion, the interests held in PEDL181 will be:
Europa Oil & Gas Limited |
50.00% (operator) |
Egdon Resources |
25.00% |
Union Jack Oil plc |
12.50% |
Humber Oil & Gas Limited |
12.50% |
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