UK-based onshore oil and gas exploration company Union Jack Oil has signed a sale and purchase agreement with Celtique Energie Petroleum to acquire an additional 3.33% interest in PEDL180 and PEDL182 licences.
With this acquisition, Union Jack will increase its stake in both licences to 15% interest.
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Union Jack has paid £600,000 as consideration, subject to Oil and Gas Authority approval.
Union Jack executive chairman David Bramhill said: “We are delighted to be able to increase further our position in Wressle to 15% as it is an attractive asset.
“The development of Wressle remains subject to receipt of planning permission and environmental permits.
“Subject to receipt of these approvals and successfully bringing the project onstream, management expects Wressle to generate meaningful cash flows and transform the financial position of the company.
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By GlobalData“When in production, first commercial oil from Wressle-1 is expected to flow at an estimated constrained rate of 500 barrels of oil per day gross, converting the company`s status from a junior explorer into a fully fledged oil producer.
“At $55 oil, management expects the net cash flow generated from Wressle attributable to Union Jack to be significant.
“The board believes that the production at Wressle will generate excess cash after accounting for the company`s ongoing working capital obligations.”
The PEDL180 and PEDL182 licences host the Wressle-1 oil discovery well, which is expected to deliver 500 barrels of oil a day at an initial constrained rate.
The Wressle-1 oil and gas discovery is situated in Lincolnshire, on the western margin of the Humber Basin.
In the Extended Well Test conducted at the discovery, the well flowed at an average of 710 barrels of oil equivalent per day over three horizons, the Ashover Grit, Wingfield Flags and the Penistone Flags.
Additionally, the PEDL182 block also contains the Broughton North Prospect.
The Broughton North Prospect is situated in a fault block immediately to the north-west of the Wressle structure.
This prospect carries a high geological chance of success of around 40% to 49%.
