Union Jack Acquires Humber's 15% Stake in the Biscathorpe Prospect, onshore UK
LSE-listed Union Jack Oil Plc has entered into a Sale and Purchase Agreement (SPA) with privately-held Humber Oil & Gas Ltd. to acquire an additional 15% interest in PEDL253 (containing the Biscathorpe Prospect) located in the South Humber basin, onshore UK.
Under the terms of the agreement, Union Jack will acquire the interest for an initial cash consideration of £500,000, and a further contingent consideration of £500,000 payable on receipt of planning approval from the Lincolnshire County Council for the side-track drilling operation, associated testing and the approval to undertake long-term production of hydrocarbons in a successful drilling case.
Upon completion, Union Jack will hold an increased 45% interest in the license, with operator Egdon Resources Plc holding 35.8%, and Montrose Industries Ltd. with the remaining 19.2% interest.
PEDL253 covers an area of approximately 95 sq. km located in the South Humber basin located between Lincoln and Louth in Lincolnshire. Primarily targeting the Westphalian sandstone, the license contains the Biscathorpe prospect, which lies on trend with and to the west of the producing Keddington oil field (also operated by Egdon Resources) and the Saltfleetby gas field.
The license also includes 264 sq. km of reprocessed and re-mapped 3D seismic data, with work plans including submission of necessary applications during February 2021 for side-track drilling, testing, and long-term production. Gross mean prospective resources associated with the Westphalian target are estimated at 3.95 million barrels of oil (MMbbls), with an upside case of 6.69 MMbbls.
“We are pleased to have taken this opportunity to increase our interest to 45% in Biscathorpe, that Union Jack’s technical team believe represents a material and commercially viable hydrocarbon resource that remains un-tested,” said David Bramhill, Executive Chairman of Union Jack.
“The collective extensive technical information analysed over the past months, combined with APT’s conclusions on the likely presence of good quality oil, have materially upgraded the resource potential and economic value of the project in our view, further support our opinion that PEDL253 remains one of the UK’s largest onshore unappraised conventional hydrocarbon licences,” he continued.
Oil & Gas Advisers advised Union Jack on the deal, while Gneiss Energy acted as financial adviser to Humber.
The completion of the acquisition is subject to customary closing conditions including OGA approval and certain precedents being satisfied.