REG - Union Jack Oil PLC - United States Producing Mineral Royalties Purchase

Union Jack OilAnnouncement

12/03/2024 07:15

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RNS Number : 4240G  Union Jack Oil PLC  12 March 2024

12 March 2024

 
         Union Jack Oil plc

 
            ("Union Jack" or the "Company")

 
United States Producing Mineral Royalties Purchase

 
 

Union Jack Oil plc, (AIM: UJO), a United Kingdom ("UK") and United States of
America ("United States" or "USA") onshore focused, production, development
and exploration company is pleased to announce details of a further
 expansion of the Company's Mineral Royalty ("Royalties") portfolio, via the
acquisition of three additional packages, brokered by the Company's Oklahoma
City, USA and Aberdeen, UK, based agent and adviser, Reach Oil & Gas Inc
("Reach").

The Royalties purchased are located within the Bakken Shale, North Dakota,
Permian Basin, Texas and the Eagle Ford Shale, Texas.

 

New Royalties Purchased

·    Top tier, Bakken Shale, Williston Basin, diversified producing 96
well interest package, located in Dunn, McKenzie and Williams Counties, North
Dakota (Effective payment date March 2024)

-      Strong cash-flow generating asset with significant upside

-      76 proved, developed and producing wells

-      eight drilled and uncompleted wells

-      eight permitted wells

-      two newly completed wells awaiting pay status

-      38 undrilled well locations

-      12 areas allocated to drill for and produce oil or natural gas

-      Quality operators include, Burlington Resources (a subsidiary of
ConnocoPhillips), Continental Resources, Hess, Chord Energy, WPX Energy (a
subsidiary of Devon Energy), Grayson Mill Operating and Kraken Operating LLC

·    Permian Basin, eight well producing unit, located in Howard and
Borden Counties, Texas.  Operated by Vital Energy Inc, a quoted, Permian
Basin focused entity, based in Tulsa, Oklahoma (Effective payment date March
2024)

·    Eagle Ford Shale, nine producing horizontal well package, located in
DeWitt County, Texas operated by ROCC Operating LLC (Effective payment date
March 2024)

 

The total combined cash consideration for the Royalties was circa US$168,000
(£133,333).  The acquisition of the Royalties has been funded from existing
cash balances.

 

Existing Royalties

·    Cronus Unit, containing a 25 well package in the Permian Basin,
Midland County, Texas.  The property is comprised of nine Chevron operated
wells, one XTO (a subsidiary of Exxon) operated horizontal well and 15 XTO
operated vertical wells (Effective payment date December 2023)

·    COG Operating LLC (a subsidiary of ConocoPhillips) operated, Powell
Ranch Unit, consisting of 15 wells in the Permian Basin, Upton County,
Texas.  The property is comprised of seven horizontal wells and eight
vertical wells (Effective payment date November 2023)

·    Occidental operated Palm Springs Unit, containing 10 horizontal wells
in the Permian Basin, Howard County, Texas (Effective payment date January
2024)

 

Appeal of United States Royalties and Focus Areas

·    Focus on the Permian Basin, Texas, which provides approximately 6% of
the world`s daily oil requirements, the Bakken Shale, Williston Basin, North
Dakota and the Eagle Ford Shale, Texas

·    Exposure to most active basins and largest operators in the United
States

·    Monthly income with no development or operating costs

·    Owned in perpetuity

·    No forward liability or future payments

 

Reach Oil and Gas

Reach, and its sister company Reach Energy Limited, established in 2013, are
successful private, production, development and exploration entities, based in
Oklahoma, United States, with offices in Aberdeen, UK and Oklahoma City, USA.

Union Jack also has various Joint Ventures in place for the drilling of wells
with Reach on the West Bowlegs and Wilzetta Prospects, located in Oklahoma
during 2024.

 

David Bramhill, Executive Chairman of Union Jack, commented:

"We are pleased to announce three additional Royalties acquisitions, further
expanding our cash-generating assets of producing properties in the USA.

"To date, Union Jack holds interests in 165 producing wells in three prolific
basins in Texas and North Dakota.

"We are particularly pleased to have purchased the Bakken Shale package which
holds material upside.

"The intent of the Company is to continue to build a quality portfolio of
remunerative USA assets.  The Royalties are held in perpetuity and the
expected economic life of these assets is more than 26 years with a current
Internal Rate of Return in excess of 20%."

 

For further information, please contact:

 Union Jack Oil plc                                                                                                                                                                                               info@unionjackoil.com
 David Bramhill

 Reach Oil & Gas Company Inc
 Miles

 Newman                                                                                                                                                                                                           miles@reachoil-gas.com (mailto:miles@reachoil-gas.com)
 Jim McKenny                                                                                                                                                                                                      jmckenny@reachoil-gas.com (mailto:jmckenny@reachoil-gas.com)

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

Nominated Adviser and Joint Broker
 Matthew Johnson

Richard Hail

Kasia Brzozowska

Caroline Rowe

 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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