The joint venture at Wressle oil field has deferred workover operations and final commissioning until January 2021, and partner Union Jack Oil has loaned operator Egdon Resources £1 million.
The North Lincolnshire oil site lies within Licences PEDL180 and PEDL182. The JV includes UJO (40%) and the operator Egdon Resources (30%), Europa Oil & Gas (30%) and Humber Oil & Gas.
In a joint statement, Union Jack and Egdon said that the deferment aimed to eliminate any possible operating and supply chain issues over Christmas.
Wressle is at an advanced stage with site reconfiguration works completed and surface facilities are currently being installed.
The storage tanks and inspection gantry have been installed, the electrical and control system installation is at an advanced stage, and all remaining equipment is expected during December.
The companies said that the workover rig will be mobilised immediately in the New Year, with the workover being completed and initial oil flows anticipated later in January 2021.
Union Jack agreed to provide a £1million loan facility to Egdon for an 18-month term with the principal sum payable at the end of the term or in part or in full at any earlier time.
The loan is secured against an unencumbered 25% interest in PEDL180/182, including the Wressle development project and associated infrastructure.
The loan facility will provide a commercial return on funds and help with developing the Wressle oil field. UJO expects production of 200 barrels of oil per day net to the company.
Egdon’s managing director Mark Abbott said that “significant” progress had been made since receiving planning approval in January 2021 to develop the site.
“Achieving commercial production from Wressle will have a significant and positive impact on Egdon’s production and cash flow, with an expected net production increase of 150 barrels of oil per day.”
He added that the project had a break-even oil price of $17.62 per barrel.
Union Jack Oil has interests in Biscathorpe, West Newton, Widmerpool Gulf, North Kelsey, Wressle, Keddington, Holmwood, Dukes Wood and Kirklington.
Egdon Resources’ interests lie in Resolution and Endeavour, Gainsborough Trough, Wressle, Biscathorpe and North Kelsey.
Europa’s assets include onshore East England, offshore West and South Ireland and Morocco.