[source: Union Jack Oil]

Union Jack Oil (UJO ) said the planned testing programmes at the West Newton B and A sites, which are expected to determine the potential of the site, will commence shortly. 

The UK-focused onshore hydrocarbon exploration group holds a 16.665% economic interest in PEDL183 which contains the WNA-1, WNA-2 and WNB-1Z hydrocarbon discoveries.   

The West Newton B-1Z completion and testing operations are targeting and fully appraising hydrocarbons within the conventional Kirkham Abbey Formation reservoir. 

West Newton’s operator, Rathlin Energy, has informed the JOA partners that the equipment required to complete and test the West Newton B-1Z well was mobilised to site on Monday. 

The equipment, which includes a workover rig, well test package, certified ultra-low emission Burners and a wireline unit, will be rigged-up in the first week of operations, after which completion activities including perforation and well treatment operations will start. 

The well test will follow these operations and overall, the duration of the West Newton B-1Z completion and testing operations are expected to take approximately six weeks. 

Initially, site activities, which include rigging up and completion operations, will be conducted during daylight hours (07:00-19:00), UJO explained, however, once well testing operations are underway site activities will move to 24-hours a day, seven days a week. 

Heavy goods service and delivery traffic will be planned for daytime hours (07:00-19:00), Monday to Saturday and will follow the approved traffic management route. The site will have a manned security presence and wellsite supervision 24-hours a day, seven days a week. 

Following the completion of operations on the WN B-1Z well, Rathlin intends to mobilise equipment and personnel to the West Newton A site in order to re-commence testing of the WN A-2 well while also appraising hydrocarbons within the Kirkham Abbey reservoir. 

Commenting on the continued progress at West Newton, David Bramhill, Executive Chairman of UJO said, "The planned testing programmes at the West Newton B and A sites are the next milestone events in determining the development potential of West Newton.” 

He added, "The results to date continue to support the Board's belief that West Newton is a large-scale, conventional onshore hydrocarbon asset with potential offshore-sized reserves and resources in place.” 

View from Vox  

Analysts at Arden Research concluded that Union Jack is ‘well-funded’ from its end June 2020 cash holding of £4.6m (zero debt) plus £7.0m from the September 2020 placing.   

Rathlin, the operator of West Newton, believes the site has the potential to provide local feedstock to a Humber net zero project replacing the need for imported hydrocarbons while developing indigenous energy sources, contributing to the economic welfare of the region.   

Analysts have also said they expect the flow testing of the B-1Z and subsequently A-2 wells to begin shortly, with a CPR (which Gaffney Cline has been appointed to carry out) to follow based on the new data, and then a further new well before the end of 2021, it said.  

In a research note, analysts said West Newton remains ‘the key asset’ for Union Jack, with the potential for the upcoming work programme to prove up a significant onshore resource and potentially open up development planning. As such, the flow testing programme, CPR and new well all represent key catalysts for Union Jack over the rest of this year, it said.  

Shares in Union Jack Oil have increased by nearly 25% in value since the beginning of 2021. The stock was trading 1.04% higher this morning at 38.9p following the announcement. 

 

UJO is an onshore oil and gas exploration firm with a focus on drilling, development and investment opportunities in the UK hydrocarbon sector, and currently holds interests in 13 licences in areas including, inter alia, the East Midlands, Humber Basin and East Yorkshire.   

West Newton   

The UK focused onshore hydrocarbon explorer holds a 16.665% interest in PEDL183, containing the conventional West Newton A-1 discovery well and WNA-2 appraisal well.    

West Newton is located at the heart of the Zero Carbon Humber project area, which aims to promote decarbonising technologies across industrial activities in the wider Humber region.   

In October 2020, it reported that the onshore West Newton B-1 ("WNB-1") well - the next well following the successful West Newton A-2 ("WNA-2") appraisal well - had been spud.    

Results from the drilling of WNB-1 are expected to inform a subsequent programme of testing to establish the well's productive capability as well as future drill operations.   

North Kelsey   

In recent months, UJO also increased its stake in the North Kelsey project by acquiring an additional 30% from Egdon Resources, taking its stake in the exploration project up to 50%.   

Further financial obligations will be equal between Union Jack and Egdon Resources, in line with both parties’ 50% stake in the North Kelsey Prospect which is located in Lincolnshire.    

The North Kelsey Prospect is a conventional oil prospect along trend from and analogous to the Wressle oil development, which lies around 15 kilometres to the northwest.    

The UK- focused group said the prospect has been mapped from 3-D seismic data and has the potential for oil in up to four stacked conventional Carboniferous reservoir targets.     

David Bramhill, Executive Chairman of UJO, described North Kelsey as “a low cost, drill-ready onshore acquisition for Union Jack in our focus area, consistent with our strategy.”    

He said a further stake in the project increases the group’s exposure to a “potentially value adding project” as well as expanding UJO’s balanced drilling and development portfolio.    

Subject to a successful farm-out, North Kelsey-1 is expected to be drilled during 2021.    

Wressle    

In recent months, Operator, Egdon Resources U.K. Limited, commenced operations to re-complete and reperforate the well located at the Wressle hydrocarbon development site.   

The Ashover Grit reservoir is expected to produce 500 barrels of oil per day at a constrained rate, increasing UJO’s net production by an additional 200 bopd when fully on stream.   

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