Union Jack Oil invests in PEDL201 and PEDL181 licences

Union Jack Oil has signed a sale and purchase agreement with Celtique Energie Petroleum to acquire additional stakes in two licences.

Under the agreement, Union Jack Oil and its commercial partner Humber Oil & Gas will jointly acquire a 16.25% interest in PEDL201 in the Widmerpool Gulf and a 12.5% interest in PEDL181 in the Humber Basin.

The acquisitions will be Union Jack Oil’s second onshore oil and gas investment with Humber Oil & Gas.

Based on a recent report by Edison Investment Research, the licences imply a value range between $6m and $22m. They are also both located within a wider area that is considered to be prospective for both oil and gas, according to studies published by the British Geological Society on behalf of the UK’s Oil & Gas Authority (OGA).

Union Jack Oil executive chairman David Bramhill said: “Union Jack will hold these licences as an investment given the board’s view that they both have significant value upside given the potential for future unconventional oil and gas exploration activities in the UK onshore.

“While further work will need to be undertaken by the onshore oil and gas industry in the UK to prove the commerciality of unconventional oil and gas projects, the transaction value ranges proposed by Edison provide an encouraging valuation indicator and supports Union Jack Oil’s confidence that the risk/reward balance of these investments is favourable to our shareholders.”

The acquisition is subject to OGA approval.