Union Jack Oil Increases Stake in the Biscathorpe Prospect in the UK
Union Jack Oil Plc has entered into a Sale and Purchase Agreement (SPA) with Montrose Industries Ltd. to acquire an additional 3% interest in PEDL253 containing the Biscathorpe prospect, located in the South Humber basin, onshore UK, for a total cash consideration of £115,000.
Concurrently, Egdon Resources Plc and Humber Oil & Gas Ltd. have signed a legally binding and confidential Settlement Agreement and resolved a dispute of default payment arising under the Joint Operation Agreement (JOA) for PEDL253.
Upon completion of the SPA and the Settlement Agreement, Union Jack Oil will hold an increased 30% interest in the license, with Egdon Resources holding a 35.8% operated interest, Montrose holding a 19.2% interest, and Humber Oil & Gas with the remaining 15%.
PEDL253 covers an area of approximately 95 sq. km located between Lincoln and Louth in Lincolnshire. The Biscathorpe prospect lies on trend with and to the west of the producing Keddington oil field (also operated by Egdon Resources) and the Saltfleetby gas field.
Previously, in 2019, Humber Oil & Gas had defaulted on a payment due to Egdon under the JOA. Subsequently, Egdon Resources, on behalf of the remaining license partners, enforced the rights under the JOA default provisions and commenced proceedings to recover the sum owed. As a result, Humber Oil & Gas remained liable for the outstanding debt, however, the remaining JOA partners assumed responsibility for the pro-rata payment of invoices and redistributed and transferred 5% of the 20% interest held by Humber in the license to Union Jack Oil.
“We are pleased to have been offered this opportunity to increase our interest to 30% in Biscathorpe, where a potentially material and commercially viable hydrocarbon resource remains to be tested,” said David Bramhill, Executive Chairman of Union Jack Oil while commenting on the development.
The completion of the transaction between Union Jack Oil and Montrose remains subject to customary closing conditions, including regulatory approvals.