5th Nov 2018 11:14
LONDON (Alliance News) - Reabold Resources PLC said Monday it has signed a subscription agreement with Connaught Oil & Gas Ltd subsidiary Rathlin Energy UK Ltd,for GBP3 million for an equity interest of 37% in Rathlin Energy.
Union Jack Oil PLC separately announced it has agreed a farm-in agreement with Rathlin Energy for a 16.7% interest in the UK onshore PEDL183 licence, containing the West Newton A-1 gas discovery.
Rathlin Energy is the operator of the PEDL183 licence in east Yorkshire.
Reabold's equity acquisition is conditional on the completion of the farm-in to the licence by Union Jack. Both are London-listed companies.
Reabold's investment, and Union Jack's farm-in, is expected to fund the drilling of an appraisal well in the first quarter of 2019 at the West Newton discovery.
Reabold Co-Chief Executive Officer Stephen Williams said: "We are extremely excited to be a part of the proposed drilling of the West Newton appraisal well.
"In line with the Reabold model, the project offers near-term activity and has been de-risked from a geological perspective, offering a high chance of success and considerable value uplift. The ability to test the extremely significant oil reef play whilst appraising the lower risk gas discovery is highly advantageous."
Union Jack Executive Chairman David Bramhill said: "The drilling of the material West Newton conventional appraisal well, where success is expected to deliver a significant onshore gas development project, will be transformational for Union Jack.
"In addition to our ongoing commitment to develop the Wressle oil discovery, and plans to commence drilling of the material conventional Biscathorpe-2 oil appraisal well later this quarter, the Farm-in and drilling of West Newton in the first quarter of 2019 puts Union Jack in an even stronger position to deliver growth in reserves, production and asset value while adhering to our principles of strict financial and technical discipline."
The PEDL183 licence has best estimate contingent resources of 189 billion cubic feet of gas equivalent to 31.5 million barrels of oil equivalent.
The Kirkham Abbey formation gas discovery in the licence has a net present value of USD247 million whilst the Cadeby formation has a net present value of USD850 million.
Shares in Union Jack Oil were up 4.4% Monday at 0.11 pence each. Reabold Resources was trading up 6.2.% at 0.77p each.
Related Shares:
Reabold ResourcesUnion Jack