THIS IS AN ADVERTISING PROMOTION
The directors of Union Jack Oil (UJO: AIM), a focused onshore hydrocarbon, production, development and exploration company, see the United Kingdom as being an attractive target for investment in oil and gas investment ventures, considering the relatively low-cost operating environment and a fully transparent licencing regime.
The company has adopted a business model, typically acquiring interests in late stage projects, mitigating risk and offering exposure to wells with the scope to dramatically change the dynamics with the drill bit, Wressle being a text book example of our recent success in developing key projects.
Union Jack holds what the board considers to be high-value material project interests with significant upside potential in our axis areas of the East Midlands, Humber Basin and East Yorkshire. These interests are already assisting in delivering material growth and revenues in the medium term and build a sustainable mid-tier UK onshore focused conventional hydrocarbon producer.
ASSET OVERVIEW
The company has acquired material key interests in several licences all being located within an established hydrocarbon producing province.
PEDL180 and PEDL182 Wressle and Broughton North - 40% interest
PEDL183 West Newton A-1, A-2 and B1z oil and gas discoveries - 16.665% interest
PEDL005(R) Keddington oilfield - 55% interest
PEDL253 Biscathorpe - 45% interest
EXL294 Fiskerton Airfield oilfield - 20% interest
PEDL241 North Kelsey - 50% interest
PEDL180/PEDL182 WRESSLE Development
Located in Lincolnshire on the Western margin of the Humber Basin, PEDL180 and PEDL182 contain the substantial Wressle conventional oil discovery with proven reserves and significant upside from contingent resources.
During August 2021, a proppant sqeeze was successfully applied to the Ashover Grit formation as part of the development plan and as a result the Wressle-1 well is comfortably exceeding initial expectations and is flowing on a severely restricted choke at a controlled rate of 650 plus barrels of high quality oil whilst site upgrades are taking place.
A secondary seperator system has been designed and manufactured and is expected to be installed by the year end to optimise gas/oil separation.
Decisions will be made in Q1 2022 on the plateau production rate, to match with longer term operational objectives and prudent reservoir management.
Focus during 2022, will move to progressing the optimal method of additional gas monetisation and finalising plans for the development of other hydrocarbon bearing zones to access the identified material contingent resources, with particular focus on the Penistone Flags reservoir.
Revenues from Wressle have already transformed the fiscal staus of Union Jack and we look forward to reporting on a second financial milesone early in 2022.
PEDL183 WEST NEWTON A1, A2 AND B1z DISCOVERIES
Union Jack hold a 16.665% interest PEDL183 located in East Yorkshire and within the Western sector of the Southern Zechstein Basin, containing the West Newton A-1,A-2 and B-1z discoveries.
These discoveries confirm the presence of substancial onshore hydrocarbon resources, within the Kirham Abbey formation.
Hydrocarbons have been recovered from all three wells and a number of external studies are in process, encompassing a wide range of reservoir analysis in order to achieve satisfactory and commecial flow rates from these wells. Preliminary reports are encouraging and we expect to be in a position to provide a comprehensive update to the market in early 2022.
The operator has produced an update of the best estimate in place hydrocarbons over several material prospects on trend and including the West Newton discoveries and these figure show liquids in place of 412 million barrels of oil and 183 billion cubic feet of gas.
PEDL005(R) KEDDINGTON
An independent detailed sub-surface review of the producing Keddington oil filed and the surrounding licence has highlighted an opportunity to increase production via a new side-track well for which planning is already in place.
Reservoir engineering work has been completed confirming a target area in the south-east of the licence area which would add up to 85,000 to 120,000 barrels of recoverable oil. Any recoverable oil could be monetised and produced using the existing production equipment already in place and being utilised on site.
Additional near-field exploration opportunities have been identified at Keddington South and Louth, where a combined gross prospective resource of approximately 1,200,000 barrels of oil could be accessed from the existing well site in due course.
PEDL253 BISCATHORPE
PEDL253 is within the proven hydrocarbon fairway of the South Humber Basin and is on-trend with the Saltfleetby gasfield, Keddington oilfield and the Louth and North Somercotes Prospects.
In February 2019, the Biscathorpe-2 well was drilled and logging operations were conducted. Preliminary analysis indicated that the primary objective, the Basal Westphalian Sandstone, was not encountered as the well was drilled high to prognosis and did not thicken as expected in the pre-drill model.
Union Jack’s independent technical team was greatly encouraged by the significant elevated gas readings and shows from logging supported by calculated oil saturations in the Dinantian Carbonate over an interval in excess of 150 metres, which included a suite of gas indications C1 to C5 and nC5, which is indicative of an effective petroleum system in close proximity to the Biscathorpe-2 well.
As a result of these compelling indications of hydrocarbons, the joint venture commissioned independent consultants APT to perform a detailed geo-chemical analysis of drill cutting samples taken from 20 intervals in the Biscathorpe-2 well.
The key result from the report was the likely presence of a 57 metre live oil column with API Gravity of 33 degrees to 34 degrees in the top of the Dinantian interval. Additionally, data evaluated at the base of the analysed section were suggestive of possible extra hydrocarbon pay at the base of the Dinantian interval.
Following the drilling of the Biscathorpe-2 well and subsequent technical analysis, Union Jack management’s view is that this prospect remains one of the UK’s largest onshore un-appraised prospects.
In December 2021, the planning application was refused by the North Lincolnshire Council for a side-track drilling operation, associated testing and long term production, despite being recommended for approval by the Council’s planning officers. The operator is currently reviewing in detail the reasons for refusal with their planning and lehal adisers and considering other options which are likely to lead to an appeal.
NEWS FLOW
Union Jack has a balanced portfolio of production, development and drill-ready interests.
The company’s strategy of focusing on conventional, relatively low-risk and low-cost projects, avoiding early stage and frontier ventures is showing signs of reaching fruition and allows investors to become involved at the end of the exploration phase and the beginning of the development and transformational cash generating cycle, principally from the Wressle oil field.
DISCLAIMER: This article was written by Union Jack Oil and published by Shares under a commercial agreement. It is not a recommendation to buy or sell the shares. The article originally appeared in Shares’ Spotlight report on 23 December 2021.
