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RNS Number : 8565R Union Jack Oil PLC 11 June 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.
11 June 2024
Union Jack Oil plc
("Union Jack" or the "Company")
Acquisition of 45% Working Interest in Enhanced Oil Recovery Project,
Oklahoma, USA
Union Jack Oil plc (AIM: UJO, OTCQB: UJOGF), a UK and USA focused onshore
hydrocarbon production, development and exploration company, is pleased to
announce the acquisition of a 45% working interest ("WI") in the Rogers
Enhanced Oil Recovery Project and associated leases located in Seminole
County, Oklahoma, USA (the "Rogers Project") from Reach Oil & Gas Company
Inc ("Reach" or the "Operator").
* Acquisition of a 45% WI in the Rogers Project containing two production wells
(Rogers and S&M) and one injector well (Coker)
* Transaction structured to provide Union Jack with a comparable WI to
neighbouring West Bowlegs area of interest, including the producing Andrews
1-17 well
* Union Jack to pay US$105,000 cash consideration for its 45% WI, with no
promote or back-costs payable
* Rogers Project activity scheduled to commence July 2024
* Budgeted Rogers Project capital expenditure ("CAPEX") of c.US$133,000 (net to
Union Jack) to occur through the remainder of the current financial year
* The acquisition and all CAPEX will be paid from Union Jack's existing cash
resources
* The Operator's base case scenario indicates that up to a further 124,000
barrels of oil (gross) can be recovered from the Rogers and S&M wells in
aggregate
The Rogers Project is located approximately two kilometres from the Andrews
1-17 discovery well and includes plans to significantly enhance deliverability
from Rogers and S&M, two legacy production wells.
Base case secondary recovery volumes calculated by the Operator suggest that
up to a further 124,000 barrels of oil (gross) can be recovered. Project
economics are highly attractive and indicate future gross revenues at
prevailing oil prices of c.US$7.5 million (gross), an IRR approaching 80% and
a c.18 month payback period post-CAPEX.
Water production sourced from nearby wells will be injected using a third well
(Coker) to rebuild reservoir pressure and increase oil and gas production.
David Bramhill, Executive Chairman, commented: "I am delighted to announce
Union Jack's further expansion in Oklahoma, alongside our partner Reach, with
our acquisition of a 45% WI in the Rogers Project.
"Noting the low capital cost associated with this new venture, we see strong
potential for incremental production gains and timely payback on our
investment.
"The Rogers Project offers an excellent strategic and locational fit with
Union Jack's existing participation at the Andrews 1-17 well, helping to
provide operational synergies and increase production and revenue by building
critical mass in the vicinity of this existing commercial producer.
"I look forward to updating the market on stabilised production rates from
Andrews 1-17 in due course, once a permanent electricity supply and upgraded
pump jack have been installed. These site upgrades are expected to materially
enhance current flow rates, with up to 100 barrels per day of high quality (46
º API gravity) oil having already been recorded at Andrews 1-17 during May
2024.
"Planning for the follow-on Andrews 2-17 well, also targeting Oklahoma's
prolific Hunton limestone, continues prior to anticipated spudding over the
coming weeks."
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
Matthew Johnson
Kasia Brzozowska
Richard Hail
Shore
Capital
+44 (0)20 7408 4090
Joint Broker
Toby Gibbs
Harry Davies-Ball
Gneiss Energy
Limited
+44 (0)20 3983 9263
Financial Adviser
Jon Fitzpatrick
Paul Weidman
Harbor
Access
+1 (475) 477 9402
USA Investor Relations
Jonathan Paterson
Tommy Zima
BlytheRay +44
(0)20 71383204
Financial PR
Tim Blythe
Megan Ray
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