Union Jack to acquire additional 10% interest in PEDL253

UK-based hydrocarbon production and exploration company Union Jack Oil has signed an agreement to acquire an additional 10% licence interest in PEDL253 within the proven hydrocarbon fairway of the South Humber Basin.

With the agreement, the company is set to increase its economic interest in the licence to 22%. It contains the drill-ready Biscathorpe Prospect, which is where the Biscathorpe-2 conventional exploration well is scheduled to undergo drilling to target oil trapped in a sandstone reservoir.

PEDL253 is also on trend with the Saltfleetby gas field, the Keddington oil field and the Louth and North Somercotes prospects.

Union Jack Oil executive chairman David Bramhill said: “Biscathorpe-2 holds considerable upside potential for our company with gross prospective oil resources of 14 million barrels and a high geological chance of success of 40%.

“The oil logged in BP’s 1987 well Biscathorpe-1 has significantly de-risked the Biscathorpe Prospect.

“Union Jack’s proprietary economic modelling of the Biscathorpe Prospect highlights its attractiveness and shows a pre-drill value for the success case of circa £24m net to Union Jack.”

Humber Oil & Gas has also acquired a 10% interest in PEDL253.

Humber Oil & Gas and Union Jack will acquire 6% of Egdon Resources UK’s interest and 4% of Montrose Industries’ interest in PEDL253.

Union Jack and Humber are required to pay their pro-rata share of the cost of the Biscathorpe-2 well, as well as a further £10,000 per percentage point interest acquired.

The transaction is subject to approval by Oil & Gas Authority.