REG - Union Jack Oil PLC - Farm-in Agreement in West Bowlegs Drilling Project

Union Jack OilAnnouncement

06/02/2024 07:00

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RNS Number : 0880C  Union Jack Oil PLC  06 February 2024

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.

 

6 February 2024

 

Union Jack Oil plc

("Union Jack" or the "Company")

Farm-in Agreement in West Bowlegs Drilling Project, Oklahoma, USA

 

Union Jack Oil plc (AIM: UJO), a predominantly UK focused onshore hydrocarbon
production, development and exploration company is pleased to announce,
further to its announcement dated 29 January 2024, that the Company has signed
a farm-in agreement with Reach Oil & Gas Company Inc ("Reach"), to acquire
a 45% working interest in a well planned to be drilled during Q2 2024, to test
the West Bowlegs Prospect ("West Bowlegs") and in an area of associated
interest, located in Seminole County, Oklahoma, USA.

 

·    Andrews-1 well planned to be drilled in early Q2 2024, with a
geological chance of success estimated by the Operator (Reach) to be 75%

·    Approximate ten-day drilling period to a depth of 5,200 feet

·    Completion time is swift; approximately eight days including
perforating and flow-back if successful

·    Recently acquired proprietary 3D seismic covering the proven
producing Hunton Limestone, one of the main hydrocarbon reservoirs in Oklahoma

·    Union Jack to pay 60% of costs of the Andrews-1 well to earn a 45%
economic interest

·    Going forward, the cost of further planned wells will be based on the
Company's 45% economic interest

·    Further drill ready prospects covered by 3D seismic identified within
interest area earned by Union Jack

·    Strategic partnership with Reach offers the opportunity to access a
wider inventory of prospects and further drill-ready targets in Oklahoma

·    Seismic acquisition and planning costs of US$347,000 are payable by
Union Jack

·    Cost for drilling and completion of the Andrews-1 well is estimated
to be approximately US$516,000 net to Union Jack

·    Costs to be paid from existing cash resources

 

The target for this well is the Hunton Limestone, one of the main hydrocarbon
reservoirs in Oklahoma.  The Hunton Limestone is unconformably overlain by
the main oil-prone source rock, the Woodford Shale and is in an excellent
position for the migration of oil.  Oil-filled porosity is encountered within
a basal Oolite limestone formation in wells within a mile of the first drill
location for the Andrews-1 well and this is believed to be the main reservoir
within West Bowlegs.

West Bowlegs is associated with a remnant of the Hunton Limestone and is
expected to be at original pressure with the seal for the reservoir being the
Woodford Shale and lateral seal against the underlying Sylvan Shale.

Primary oil recovery is expected to be by solution gas drive with any gas
recovered to surface being sold into the local network.

Reach is an accredited operator in the USA, owning and operating oil and gas
production facilities in Seminole and Pottawatomie Counties in Oklahoma. All
prospects are generated by Reach which owns modern seismic equipment, supplied
by a UK based company Stryde Limited.

Gneiss Energy has acted as financial adviser to this transaction.

 

David Bramhill, Executive Chairman, commented: "As indicated in the
announcement dated 29 January 2024, I am delighted to be able to announce the
execution of the agreement with Reach for our initial near-term drilling
operation in Seminole County, Oklahoma.

"The Andrews-1 well has a high chance of success and if proven commercial
could be in production within one month or sooner from spudding.  Similar
low-cost development wells nearby, typically produce initially at
approximately 150 barrels of oil and over 200 thousand cubic feet of gas per
day and can provide rapid pay-back within six months.

"The West Bowlegs transaction meets our criteria of acquiring material
interests in projects with near-term planned drilling and capable of adding
significant cash-flow, while complementing our existing profitable production
and development interests onshore UK.

"Our strategic partnership with Reach offers Union Jack the opportunity to
access a wider portfolio of prospects and drill-ready targets.

"I look forward to reporting to shareholders on this new phase in the growth
of Union Jack, further near-term project interest acquisitions and the
spudding of the Andrews-1 well in early Q2 2024."

 

Miles Newman, Chairman of Reach, commented: "We acquired the West Bowlegs 3D
seismic survey, which is very close to our existing production operations with
our state-of-the art Stryde seismic node system and have mapped several
interesting prospects.

"Reach is focused on generating drilling opportunities on the US onshore that
can benefit from modern 3D seismic.

"We are very pleased to expand our activities with Union Jack onshore US."

 

For further information, please contact the following:

 

Union Jack Oil
plc
info@unionjackoil.com

David Bramhill

 

Reach Oil & Gas Company Inc

Miles
Newman
miles@reachoil-gas.com

Jim
McKenny
jmckenny@reachoil-gas.com

 

SP Angel Corporate Finance LLP
                                               +44
(0)20 3470 0470

Nominated Adviser and Joint Broker

Matthew Johnson

Kasia Brzozowska

Caroline Rowe

Richard Hail

 

Shore
Capital
 +44 (0)20 7408 4090

Joint Broker

Toby Gibbs

Iain Sexton

 

Gneiss Energy
Limited
   +44 (0)20 3983 9263

Financial Adviser

Jon Fitzpatrick

Paul Weidman

 

BlytheRay
                             +44 (0)20 7138
3204

Financial PR

Tim Blythe

Megan Ray

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