Union Jack Oil plc has acquired a further 30% from Egdon Resources plc of the North Kelsey prospect PEDL241 in Lincolnshire.
TERMS
The onshore hydrocarbon exploration and development company paid a cash consideration of £100,000 and has now aligned its 50% interest with operator Egdon.
Previous financial farm-in obligations in respect of the 20% interest in PEDL241 held by Union Jack will lapse.
The companies will carry further financial obligations on an equal basis.
The transaction is subject to the approval of the Oil and Gas Authority.
NORTH KELSEY
North Kelsey in North Lincolnshire is a conventional oil prospect along trend from and analogous to the Wressle oil development in East Riding, some 15km to the northwest.
Egdon estimates that the prospective resources range from 4.66 million barrels up to 8.47 million barrels of oil, with a mean resource volume of 6.47 million barrels.
Union Jack said that the prospect had been mapped from 3-dimensional seismic data and had the potential for oil in up to four stacked conventional Carboniferous reservoir targets.
FOCUS
Executive chairman David Bramhill added that North Kelsey was a low cost, drill-ready onshore acquisition in the company’s focus area consistent with its strategy.
“The increase in our interest to 50% increases our exposure to this potentially value adding project and expands our balanced drilling and development portfolio.
“North Kelsey sits within our focus areas of the East Midlands, Humber Basin and East Yorkshire and is on trend with our Wressle oil development project which is on track to produce first oil later this quarter.
“The acquisition of this additional 30% interest has been executed on attractive terms without any promote and will also deliver additional savings by removing our previous farm-in carry obligations.
“Subject to a successful farm-out process, North Kelsey-1 is expected to be drilled during 2021.”
In September 2020, the existing planning consent for drilling North Kelsey-1 was extended to 31 December 2021 by Lincolnshire County Council.