TIDMUJO
RNS Number : 2745J
Union Jack Oil PLC
26 April 2022
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
26 April 2022
Union Jack Oil plc
("Union Jack" or the "Company")
Project Update
Union Jack Oil plc (AIM: UJO) a UK focused onshore hydrocarbon
production, development and exploration company, is pleased to note
that the Operator, Egdon Resources U.K. Limited ("Egdon") has
provided an update on their projects as part of its Interim
Results, published today, for the six months ended 31 January
2022.
Union Jack is pleased to highlight the relevant comment on
projects in which interests are held by the Company.
Wressle PEDL180 and PEDL182 (Union Jack 40%)
Highlights
-- Revised Field Development Plan submitted to the North Sea
Transition Authority ("NSTA") during April 2022
-- Production currently at 760 to 800 barrels of oil per day
("bopd") gross (304 to 320 bopd net to Union Jack)
-- Instantaneous flow rates of over 1,000 bopd have been achieved
-- Likely gas monetisation approach will be to export gas via a
short, approximately 600 metre pipeline from the Wressle site into
the gas distribution network
-- Completion of gas monetisation expected by winter 2022
-- Advancement of the development plan and consent process to
enable production from the Penistone Flags reservoir containing
significant Contingent Resources
Wressle-1 quickly exceeded pre-production expectations of 500
bopd on resumption of production following the successful
proppant-squeeze and coiled tubing operations executed during
August 2021.
Instantaneous flow rates of over 1,000 bopd have been
achieved.
Early restrictions to production have been successfully
addressed through improvements and modifications to the site
facilities, including installation of a secondary separator and
progressive upgrades to the gas incineration unit.
Production is currently controlled by the 10 tonnes per day gas
incineration boundary, regulated by the Environmental Agency ("EA")
Permit, to between 760 to 800 bopd gross (304 to 320 bopd net to
Union Jack).
Once the gas monetisation development is complete this
production limitation will be eliminated and the production rate is
expected to increase significantly.
Independent pressure test analysis has indicated potential flow
rates for Wressle-1 of between approximately 1,200 to 1,500
bopd.
Since production commenced at Wressle-1 in January 2021, the
cumulative oil production has exceeded 150,000 barrels of oil with
zero formation water produced to date.
A revised Field Development Plan was submitted to the North Sea
Transition Authority ("NSTA"), formerly known as the Oil and Gas
Authority during April 2022.
The likely gas monetisation approach will be to export gas via a
short pipeline of approximately 600 metres from the Wressle site
into the local gas distribution network. This will require
regulatory Planning and EA consents.
This work is likely to be completed towards the end of 2022, in
time for gas sales in the coming winter.
This export route will also be available in the longer term for
the development of the Penistone Flags reservoir where detailed
work is underway to produce the gross Mid-case Contingent Resources
of 1.53 million barrels of oil and 2 billion cubic feet of gas.
Environmental monitoring throughout the operations has shown no
measurable impact on surface or groundwater quality, no related
seismicity and that noise levels have been within the permitted
levels.
The Operator has stated that priorities for the coming period
will be to:
-- Complete the installation of the remaining permanent production facilities
-- Progress planning, permitting and implementation of the gas
monetisation plan, reduce gas incineration and eliminate
limitations on oil production
-- Advance the development plan and consent process to enable
production from the Penistone Flags reservoir
Operational Focus at Wressle
-- Continue to optimise oil and gas production from the Ashover
Grit reservoir, building on the strong performance to date
-- Progress gas monetisation
-- Finalise plans for the development of the material Contingent
Resources in the Penistone Flags
Keddington PEDL005(R) (Union Jack 55%)
Keddington continues to contribute tangible revenues, especially
during this time of high oil prices.
A subsurface review of the field has highlighted a viable
drilling location in the east of the field targeting up to 180,000
barrels of oil of incremental production.
With planning consent already in place, this presents an
opportunity to increase production via a development side-track
from one of the existing wells.
In addition, a near-field exploration opportunity exists at
Keddington South (Mean Prospective Resources of 635,000 barrels of
oil) and the Louth Prospect (Mean Prospective Resources of 600,000
barrels of oil).
Fiskerton Airfield EXL294 (Union Jack 20%)
Fiskerton Airfield continued production during the period. Focus
remains on maximising oil production from the existing wells and
managing costs.
Longer term, there is potential for the site to be used to
manage any produced water from other operated sites through the
existing water injection well and also for possible geothermal
repurposing.
Biscathorpe PEDL253 (Union Jack 45%)
On 1 November 2021, planning consent was refused for the
drilling of a side-track well, testing and long-term production at
Biscathorpe.
The application had been recommended for approval by
Lincolnshire County Council ("LCC") planning officers.
On 12 April 2022, the Operator submitted a comprehensive
statement of case in support of its appeal against the decision.
Shareholders will be updated as the appeal process progresses.
According to the Operator`s estimates the proposed side-track
would target gross Mean Prospective Resources of 6.5 million
barrels of oil.
North Kelsey PEDL241 (Union Jack 50%)
The application to extend the existing planning permission to
drill the North Kelsey-1 exploration well was refused by the LCC
planning committee on 14 March 2022.
The decision was disappointing given the compelling case
presented and the positive recommendation of LCC's Planning
Officer. Given this, the Operator will bring forward an appeal
against this decision during H2 2022.
The North Kelsey Prospect is considered an analogue to the
Wressle field and according to the Operator has gross Mean
Prospective Resources of 6.47 million barrels in multiple
reservoirs.
Energy Transition at Dukes Wood PEDL118 (Union Jack 16.67%)
A programme to plug and abandon the existing Dukes Wood-1 oil
well and to recomplete for geothermal heat production has been
developed and submitted to the NSTA.
Anticipation is that, subject to regulatory approval this work,
which is a proof of concept, will commence during 2022.
Outlook for Other Projects and Forward Plan
-- Progress drilling plans to target incremental oil production
and near field exploration opportunities at the Keddington
oilfield
-- Securing planning consent via appeal for the Biscathorpe and North Kelsey projects
-- Further develop the energy transition opportunity for
repurposing the Dukes Wood-1 well for geothermal heat
Executive Chairman of Union Jack, David Bramhill commented: "The
Extended Well Testing programme at Wressle has been nothing short
of a spectacular success and another important milestone has been
achieved in the submission of the Wressle Field Development Plan to
the Regulators. Full credit must be offered to the Operator and its
Joint Venture partners in achieving this.
"We have learned much about the behaviour of this well over the
past year and the results to date have confirmed that our material
40% interest in this major project is only just beginning to show
its true potential.
"I have no doubt that Wressle will be a major producer of
onshore hydrocarbons for many years to come.
"In addition, our multi-discovery conventional onshore project
at West Newton is also making significant progress and our
expectations of success, remain, as always, extremely high.
"To sum-up, Wressle has effectively transformed the financial
position of Union Jack and, coupled with the exceptional
opportunities we believe are offered by our other projects, the
Company is now covered for all operational and contracted or
planned CAPEX costs, including drilling, which augers well for the
future of the Company and its shareholders."
For further information, please contact
Union Jack Oil plc info@unionjackoil.com
David Bramhill
SP Angel Corporate Finance LLP +44 (0)20 3470 0470
Nominated Adviser and Broker
Richard Morrison
Richard Hail
Caroline Rowe
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