REG - Union Jack Oil PLC - Joint Venture Partner Project Updates

Union Jack OilAnnouncement

24/04/2023 07:15

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RNS Number : 1418X  Union Jack Oil PLC  24 April 2023

 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.

 

24 April 2023

Union Jack Oil plc

("Union Jack" or the "Company")

Joint Venture Partner Project Updates

 

Union Jack Oil plc (AIM: UJO) a UK focused onshore hydrocarbon production,
development and exploration company note that Europa Oil & Gas (Holdings)
plc and Egdon Resources plc, as part of their Interim Reports, have today
published commentary on various projects in which Union Jack hold economic
interests.

Union Jack's results for the year ended 31 December 2022 will be published on
Monday 15 May 2023.

The highlights from both companies' commentaries on projects of interest to
Union Jack were as follows:

 

EUROPA OIL & GAS (HOLDINGS) PLC

 

Wressle PEDL180/182

·   Onshore UK - Wressle oilfield continues to exceed expectations,
generating strong levels of revenues and production

·   Wressle net production increased 55% from 134 bopd to 207 bopd as the
field performed better than expected

·   Wressle now the second most productive onshore UK oilfield

·   The well continues to produce under natural flow with zero water cut
and remains highly cash generative

·   A new seismic interpretation and mapping exercise across the Wressle
field has highlighted a potentially significant increase in resources from the
Ashover Grit and the results of the analysis are now being incorporated into
the field development plan. The intention is that the next development well
will be drilled from the existing Wressle site and planning and permitting
work for the well is ongoing. The well will be drilled at the earliest
opportunity, subject to receipt of regulatory approval

·   Ongoing work to further develop the field and to utilise the associated
gas being produced from Wressle which is expected to lead to further increases
in oil production during H2 2023

·   An independent technical report has been commissioned which will
incorporate the new field interpretation, historic production performance data
and the field development plan. The report is expected to be completed during
June 2023

·   Europa contributes to the Wressle Community Fund, which has been
operating since early 2022 and provides funds to meet the needs of local
charities and community groups. The Company and its Wressle JV partners make
an annual contribution of £100,000 to the fund

 

The Wressle oilfield's continued excellent performance has underpinned our
significant growth in revenues during the period, and a number of projects are
underway to enable increased oil production and gas monetisation from the
field. The first phase of the gas utilisation project was completed in January
whereby three microturbines were connected to provide site power which have
resulted in a c. 10% increase in oil production. The second stage is the
installation of a gas engine to generate 1.4 MW of electricity into a local
private power network.

 

The first half of the financial year was a significant period for Europa, and
the outstanding performance of Wressle, our flagship producing asset, has
enabled us to strengthen our financial foundations by continuing to deliver
material cashflow, facilitating further investment in our existing assets
driven by Wressle's impressive daily production rate. Planned gas monetisation
solutions for Wressle, coupled with the planned drilling of a development well
scheduled for H2 2023, demonstrates our continued commitment to upgrading this
key asset to augment production and generate additional revenues, whilst also
eliminating flaring from the field.

 

Wressle, currently the second most productive onshore UK oilfield, continues
to surpass all expectations, and we remain committed to further enhancing the
field's efficiency and increasing production through gas monetisation
solutions, alongside advancing the development drilling to enable further
production.

 

 

EGDON RESOURCES PLC

 

Wressle PEDL180/182

·    The Wressle oil field continued to be the standout asset for Egdon,
producing at an average rate of 689 barrels of oil per day ("bopd") during the
period.  Total field production from Wressle to 31 January 2023 stood at
357,838 barrels of oil with no water production.

The key operational focus for the coming period will be:

·    Maintaining and enhancing the strong production performance at
Wressle whilst progressing both the gas monetisation and further development
drilling as priorities.

 

The standout asset for Egdon continues to be Wressle (Egdon 30%). Cumulative
oil production to 31 January 2023 was 357,838 barrels and production exceeded
400,000 barrels on 28 March 2023 with no production water seen to date.
Production during the Period averaged 689 bopd.  Three microturbines were
connected during January and February and have been fully operational since
late February.  So far these have resulted in a c. 10% increase in oil
production when compared to that possible without the turbines being
operational and further optimisation is ongoing. Production rates averaged 770
bopd during March 2023.

The commissioning of the micro-turbines was the first step in the gas
utilisation scheme.  The second stage will be the installation of a separate
gas engine to generate and export electricity into a local private power
network. Detailed feasibility work has confirmed that the local network can
accept c.1.4 MW of electricity and suitable used gas engines are currently
being assessed due to the long lead times for new units.

During the Period Egdon has completed reprocessing of the 3D seismic data and
finalised a new seismic interpretation and mapping exercise across the Wressle
field. This has highlighted a potentially significant increase in resources
from the Ashover Grit at Wressle and a new Competent Person's Report has been
commissioned to consider all oil and gas bearing formations at Wressle and
incorporating the new field interpretation and production performance data.
This new technical report will inform the optimal development of the Ashover
Grit and Penistone Flags reservoirs and we look forward to providing more
details of the forward plan once this work is complete.   Planning and
permitting work is currently ongoing for a new well or wells from the existing
Wressle site. The intention will be to drill at the earliest opportunity,
subject to receipt of regulatory approval.  Stage two of the gas monetisation
which will focus on gas export will also be included in the planning
application.

The Wressle Community Fund has been operating since early 2022. In August
2022, operation of the fund was transferred to Broughton Community and Sports
Association which will run the fund to meet the needs of local charities and
community groups.  The Wressle JV is making £100,000 a year available to the
fund.

 

Biscathorpe PEDL253/North Kelsey PEDL241

Biscathorpe (Egdon 35.8%) and North Kelsey (Egdon 50%) are volumetrically
significant prospects with each having gross Mean Prospective Resources of
around 6.5 million barrels. Drilling is dependent upon the outcome of the
planning appeals, but with a positive outcome would be expected in H1 2024.

A planning hearing was held for Biscathorpe on 11 October 2022 and we await
the decision from the Planning Inspectorate.

The appeal documentation for North Kelsey was submitted on 8 August 2022 and a
Public Hearing is due to be held on 14 June 2023, with a decision expected
during July 2023.

 

Keddington PEDL005(R)

Keddington (Egdon 45%) continued to contribute tangible revenues. A viable
drilling location in the east of the field has been identified targeting
around 180,000 barrels of incremental production.  Planning is in place for
this and the well is likely to be drilled during H2 2023.

 

Fiskerton Airfield EXL294

Fiskerton Airfield (Egdon 80%) has remained shut-in during the period. There
remains the potential for the site to be used to manage any produced water
from other Egdon sites through the existing water injection well.

 

The full reports can be viewed on the news sections of the respective
companies websites; www.egdon-resources.com (http://www.egdon-resources.com)
and www.europaoil.com (http://www.europaoil.com)

 

 

 

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 Joint Broker

Kasia Brzozowska

Matthew Johnson

Richard Hail

 

Shore
Capital
 +44 (0)20 7408 4090

Joint Broker

Toby Gibbs

Iain Sexton

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