3rd Oct 2018 08:45
LONDON (Alliance News) - Union Jack Oil PLC on Wednesday said it has signed a farm-in agreement for the onshore UK PEDL183 licence in West Yorkshire.
The deal has been signed with Connaught Oil & Gas Ltd subsidiary Rathlin Energy UK Ltd, and will see Union Jack take a 17% interest in the licence, which includes the "significant" West Newton A-1 gas discovery.
Union Jack said there are "attractive" terms for the farm-in, with all costs going to drilling and licensing.
As part of this, the company has raised GBP2.3 million in an "oversubscribed" placing to fund the farm-in and well costs.
Humber Oil & Gas Ltd, Union Jack's commercial partner, has also participated in the farm-in on identical terms and will take a 17% stake as well.
Union Jack Executive Chairman David Bramhill commented: "The proposed farm-in to PEDL183 containing the material West Newton gas discovery represents a significant project technically and is compelling financially for Union Jack and we are grateful for the continuing support of our existing shareholders and new investors who have participated in this oversubscribed fundraising.
"We look forward to working with Rathlin and Humber, drilling the West Newton conventional appraisal well to firm up the project's significant potential and, upon a successful appraisal well, progress to a field development plan," he continued.
"Union Jack will book 5.3 million barrels of oil equivalent contingent resources to its existing reserve and resource portfolio on acquisition and once a field development plan is in place, West Newton's contingent resources can be converted to reserves."
Shares were 2.9% higher on Wednesday at a price of 0.090 pence each.
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