Union Jack Oil plc has added three packages of wells to its mineral royalty portfolio in the United States.
PROLIFIC
The company’s agent and adviser Reach Oil & Gas Inc brokered the purchases.
Top-tier Bakken Shale in the Williston Basin is a “diversified producing 96 well interest package” located in Dunn, McKenzie and Williams Counties, North Dakota.
Union Jack said that the package was a “strong cash-flow generating asset with significant upside”, containing 76 proved, developed and producing wells, eight drilled and uncompleted, eight permitted and two newly completed awaiting pay status.
The acquisition also has 38 undrilled well locations and 12 areas allocated to drill for and produce oil or natural gas.
Operators include ConnocoPhillips’ subsidiary Burlington Resources, Continental Resources, Hess, Chord Energy, Devon Energy subsidiary WPX Energy, Grayson Mill Operating and Kraken Operating LLC.
Union Jack has also acquired an eight-well producing unit in the Permian Basin, located in Howard and Borden Counties, Texas. The operator is Vital Energy Inc.
The third package is Eagle Ford Shale, a nine producing horizontal well package, located in DeWitt County, Texas operated by ROCC Operating LLC.
Union Jack paid a total circa US$168,000 (£133,333) using existing cash balances.
The company will receive a monthly income with no development or operating costs, no forward liability or future payments.
The acquisitions add to the company’s existing units of Cronus with 25 wells, Powell Ranch containing 15 wells and Palm Springs holding 10 horizontal wells, in addition to joint ventures in Oklahoma.
Union Jack to date holds interests in 165 producing wells in three prolific basins in Texas and North Dakota.
“We are particularly pleased to have purchased the Bakken Shale package which holds material upside,” said executive chairman David Bramhill.
“The intent of the company is to continue to build a quality portfolio of remunerative USA assets.
“The royalties are held in perpetuity and the expected economic life of these assets is more than 26 years with a current internal rate of return in excess of 20%.”