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.
13 February 2024
Union Jack Oil plc
("Union Jack" or the
"Company")
Acquisition of 75% Interest in Wilzetta
Drilling Project, Oklahoma, United States
Wilzetta Fault Seismic Acquisition
Programme
Union Jack Oil plc (AIM: UJO), a UK and USA
focused onshore hydrocarbon production, development and exploration
company is pleased to announce, further to the Company's
announcement dated
6 February 2024, that it has signed a further two farm-in
agreements with Reach Oil & Gas Company Inc ("Reach").
The first agreement is to acquire a 75% working
interest in a well planned to be drilled in Q3 2024, to test the
Footwall Fold Prospect in the Wilzetta Fault play ("the Prospect")
and in an area of associated interest.
The second agreement is to acquire a 37.5%
working interest in a 2D and 3D seismic acquisition programme to
identify additional drillable prospects along the Wilzetta Fault,
located in Pottawatomie and Lincoln Counties, Oklahoma,
USA.
75% Farm-in
and Drilling of the Footwall Fold Prospect in the Wilzetta Fault
Play
· Main
Wilzetta Fault zone target is underlain by a deeper structure that
will also be tested with the first high-impact well with estimated
recoverable oil in excess of 200,000 barrels
·
Initial Wilzetta well planned to be drilled in Q3 2024 to a
depth of 6,000 feet, with a geological chance of success, estimated
by the Operator (Reach) to be 35%
·
High-relief compressional fold with a large reverse fault,
within the prolific Wilzetta Fault zone
·
Prospect mapping supported by recently reprocessed 3D seismic
data
· The
prolific Wilzetta Fault plays are the site of numerous oilfields
across central Oklahoma with nearby analogous production
from:
-
North-East Shawnee field, three miles south of the Prospect,
which has produced more than 5,800,000 barrels of oil to
date
-
West Bellmont field, adjacent to the Prospect, which has
produced more than 580,000 barrels of oil to date
-
Arlington Field, ten miles north-east of the Prospect, which
has produced more than 1,800,000 barrels of oil to date
·
Planning and back costs of US$277,000 are payable by Union
Jack
· Cost
for drilling and completion of the well are estimated to be
approximately US$1,000,000 net to Union Jack
·
Going forward, the costs of further planned wells will be
based on the Company's 75% working interest
·
Costs will be paid from existing cash resources
37.5% Farm-in
to 2D and 3D Seismic Acquisition Programme in the Wilzetta Fault
Play
·
Additional potential sites for structures along the Wilzetta
Fault have been identified (in addition to those on the Wilzetta
Fault Footwall Fold)
·
Initially, 2D seismic will be acquired to confirm sites for
compressional structures
· A 3D
programme will then be carried out at the most promising sites to
firm up additional drilling locations
·
Union Jack will pay 50% of the 2D and 3D programme costing
US$280,000 net to Union Jack, to earn a 37.5% working interest in
any prospects generated
·
Costs will be paid from existing cash resources
David
Bramhill, Executive Chairman of Union Jack,
commented: "Further to the announcements made
on 29 January 2024 and 6 February 2024 in respect of Union Jack's
transactions with Reach, I am pleased to be able to bring another
two, highly prospective farm-in projects to the Company's Oklahoma,
USA, drilling and Mineral royalty portfolio.
"During late 2023 and early 2024, the Company
assembled an initial balanced collection of value adding assets,
comprising three cash yielding Mineral royalties, holding
attractive upside potential, and a quality portfolio of near-term,
exploration, drilling and seismic acquisition programmes that we
believe have an excellent chance of success.
"We expect to see the first of our wells, being
the Andrews-1 on the West Bowlegs Prospect, drilled in early Q2
2024 and we are pleased to see good progress already being made
with the well location staked and site construction to commence
shortly.
"Reach has also informed Union Jack that an
intent to drill was submitted to the Oklahoma Corporation
Commission on 8 February 2024 and that permit approval can
typically be expected within 14 days.
"The Andrews-1 well will be followed by a
high-impact well on the Wilzetta Fault later in 2024, where the
potential rewards are significant.
"Typical wells drilled on the Wilzetta Fault
can produce approximately 250 barrels of oil a day providing
pay-back within three months.
"The Board is delivering on its aims of
identifying and introducing potential new growth opportunities in a
welcoming jurisdiction, that is highly prospective, has existing
operations and infrastructure accompanied with an attractive fiscal
environment, to complement the Company's already successful and
profitable production activities in the UK.
"In the UK, we have planned programmes, which
include the drilling and development of the Penistone Flags
formation, containing material gas reserves on our flagship Wressle
development. We also anticipate the "renaissance" of the West
Newton gas project, which I am confident will become the focus of
significant drilling and development activity during 2024 and
beyond.
"Meanwhile, I also look forward to reporting on
progress on Union Jack's expanded portfolio in the USA and the
continuing success of the Company."
Jim McKenny,
President of Reach, commented: "The Wilzetta
Fault is a proven oil producing area with potential for the
discovery of substantial reserves in a complex structural
setting.
"We are thrilled to have Union Jack as a
partner in our expanding, seismic driven exploration
programme."
Wilzetta Fault
Play
The Wilzetta Fault is the site of numerous
producing oilfields across central Oklahoma. Strike-slip
displacement (an essential component for fault systems in
north-central Oklahoma) on this fault has caused areas of
compressive forces that have formed the structures for oil
accumulations.
Reservoirs in the immediate area are the Hunton
Limestone and Wilcox Sands. These formations are highly
productive in faulted and folded structural traps.
Younger Pennsylvanian sands are oil-filled in
the area as stratigraphically trapped channel complexes.
Hydrocarbons are sourced from the world-class
Woodford Shale source rock.
Seismic
Acquisition on the Wilzetta Fault
The 2D and 3D seismic acquisition programme is
designed to identify further prospects along the Wilzetta
Fault. Additional areas of probable compression have been
identified.
The exploration strategy developed by Reach is
to confirm areas of compression using 2D seismic data and follow on
with 3D seismic where appropriate.
The areas identified for surveying appear to
have been neglected due to the difficult terrain for seismic
acquisition. Reach's state-of-the-art equipment, supplied by
UK based, Stryde Limited, allows for cost effective and efficient
seismic acquisition.
Gneiss Energy acted as Financial Advisers on
both transactions.
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
Jim
McKenny
jmckenny@reachoil-gas.com
SP Angel
Corporate Finance LLP
+44
(0)20 3470 0470
Nominated
Adviser and Joint Broker
Matthew Johnson
Richard Hail
Caroline Rowe
Kasia Brzozowska
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