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
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