Union Jack Oil PLC

Biscathorpe Drilling Timetable and Update

RNS Number : 1114Z
Union Jack Oil PLC
29 August 2018
 

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

 

29 August 2018

                                                                    

Union Jack Oil plc

("Union Jack" or the "Company")

Biscathorpe Drilling Timetable and Update

Union Jack Oil plc (AIM: UJO), a UK-focused onshore hydrocarbon production, development and exploration company is pleased to announce that well-site construction will be completed during September 2018, followed by the drilling of the Biscathorpe-2 conventional well in October/November 2018.  Union Jack holds a 22% interest in Licence PEDL253 containing the Biscathorpe Prospect.

Highlights

·     Site construction to be completed during September 2018 and drilling scheduled to commence in October/November 2018

·     Tenders for materials and services currently being updated

·     Biscathorpe-2 well will evaluate the Biscathorpe-1 discovery made by BP in 1987

·     Mean prospective resources estimated at 14.00 MMbbl gross (3.1 MMbbl net to UJO) with 40% geological chance of success

·     Planning and Environment Agency permits in place

·     Operations at the site will not involve fracking for shale gas or shale oil

David Bramhill, Executive Chairman of Union Jack, commented:

"Biscathorpe is one of the UK's largest onshore conventional oil prospects with Mean Prospective Resources of 3.1 million barrels net to Union Jack and a high geological chance of success of 40%.

"The Company`s economic modelling of the Biscathorpe Prospect highlights its attractiveness and shows a pre-drill value for the success case of circa £24 million net to Union Jack (using the industry standard net present value after tax at a 10% discount rate).

"Six months on from entering into a Commercial Partnership with Humber Oil & Gas Limited ("Humber") we have worked together to identify and acquire jointly, several licence interests in what we consider to be potentially high yielding projects.  We are optimistic about drilling Biscathorpe-2, which represents the first well drilled in conjunction with Humber.

"We would also like to take this opportunity to emphasise that Biscathorpe-2 is a conventional well and will not, either now or in the future, involve any fracking.

"Biscathorpe is material to Union Jack and has the ability to transform our Company into a significant UK oil producer.  We are delighted that guidance on the drilling timetable has been issued and we look forward to keeping the market apprised of further developments."

The Biscathorpe-2 Conventional Well

The Biscathorpe-2 conventional well site is located within PEDL253 on the proven hydrocarbon fairway of the South Humber Basin, on trend with the Saltfleetby gas field, the producing Keddington Oilfield (Union Jack 20%) and the Louth and North Somercotes prospects.

The Biscathorpe-2 well will be located in a direction towards a potentially thicker sand development within the structural closure of the trap.  The latest forecast Mean Prospective Resource is 14 million barrels of oil (gross) with a geological chance of success of 40%.

Tenders for all materials, services and a drilling rig are currently being updated with a view to completing well site construction during September 2018 and commencing drilling operations in October/November 2018.

The drilling of the Biscathorpe-2 well will evaluate the Biscathorpe-1 conventional oil discovery made by BP in 1987.  This well encountered an oil filled sandstone which is expected to thicken down-dip.

The Biscathorpe Prospect is a well-defined four-way dip closed structure mapped from modern re-processed 3D seismic.

In May 2018, Lincolnshire County Council ("LCC") Planning Committee unanimously granted an extension to the existing planning consent to drill a conventional resource exploration well at Biscathorpe.

The joint venture participants in Biscathorpe have been made aware that LCC has been challenged by an objector in respect of the legality of their planning decisions.  No impact to the timing of operations at Biscathorpe is anticipated at this moment in time, however, the situation will be kept under ongoing review.

The Oil and Gas Authority ("OGA") has also granted an extension for PEDL253 until 30 June 2020.

The Biscathorpe-2 conventional well will involve drilling for oil trapped in a sandstone reservoir and for clarity the operations at the site will not either now or in the future involve the process of hydraulic fracturing "fracking" for shale gas or shale oil.

Licence Interests in PEDL253

Egdon Resources UK Limited (Operator)

35.80%

Montrose Industries Limited

22.20%

Union Jack Oil Plc

22.00%

Humber Oil & Gas Limited

20.00%

 

In accordance with the "AIM Rules - Note for Mining and Oil and Gas Companies", the information contained within this announcement has been reviewed by Graham Bull, Non-Executive Director, who has over 46 years of international oil and gas industry exploration experience.

 

For further information please contact the following:

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


 


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