Union Jack Oil Increases Stake in the UK's Wressle Development Project to 40%
UK-focused independent E&P company Union Jack Oil Plc has announced the acquisition of an additional 12.5% economic interest in exploration licenses PEDL180 and PEDL182 (containing the Wressle Hydrocarbon Development Project) from Humber Oil & Gas Ltd., in exchange for an initial upfront cash payment of £500,000.
The AIM-listed company stated that pursuant to the deal, its share in the Wresssle Project will increase from 27.5% to 40%, reaffirming its ongoing commitment to one of its three flagship projects.
The licenses cover a combined area of approximately 79 sq. km located on the western margin of the Humber Basin in North Lincolnshire. The area lies on trend with the producing Crosby Warren oil field and the Brigg-1 oil discovery.
“Wressle is an attractive, low-cost, low-risk conventional onshore hydrocarbon project under development with 2P Reserves and considerable 2C Contingent Resources present within the Penistone Flags formation”, Union Jack Oil said in a statement.
The consideration also includes a deferred payment of £1.04 million to be paid Calmar LP, appointees of Celtique Energie Petroleum Ltd. (the original vendors in the acquisition by Humber of its interest in the licenses) on commercial oil production being established. In addition, a 2.5% Net Profits Interest (NPI) is also attached to the working interest as a result of the original acquisition by Humber from Celtique.
According to Mr. David Bramhill, Executive Chairman of Union Jack Oil, “The Acquisition has an immediate positive impact on Union Jack by increasing its reserves and resources at Wressle by 45.5% to in-excess of 1,240,000 barrels of oil equivalent.”
“The development of Wressle continues apace and first oil is anticipated during H2 2020. When Wressle is commissioned and in production, it will result in an initial constrained production anticipated to be 500 barrels of oil per day gross, adding production of 200 barrels of oil per day net to Union Jack and transforming the Company’s financial position”, he added.
Gneiss Energy Ltd. acted as the financial adviser to Humber in respect of the transaction. Union Jack Oil was advised by SP Angel Corporate Finance.