Union Jack Oil (AIM:UJO)  has received approval from the Oil and Gas Authority ("OGA") for its acquisition of a further 3% interest in PEDL253, containing the Biscathorpe Prospect.

The UK-focused onshore hydrocarbon company said following the implementation of the terms of a Settlement Agreement, its economic interest in the prospect will increase to 30%.

Union Jack previously announced that it had entered into a Sale and Purchase Agreement with Montrose Industries Limited to purchase a further 3% interest for £115,000 in June.

Upon completion of the Montrose acquisition and implementation of the Settlement Agreement, operator Egdon Resources U.K. Limited will hold 35.8% in the licence, Montrose Industries 19.2% and Humber Oil & Gas 15.0% alongside Union Jack Oil’s 30.0%.

"We are pleased to complete this transaction, following which the Company will hold a meaningful 30% interest in what we consider to be a key, potentially high-impact project within our well balanced portfolio,” said David Bramhill, Executive Chairman of Union Jack.

Shares in Union Jack Oil have traded exceptionally strongly over the past three months increasing over 100% to open at 0.25p following this announcement.

Biscathorpe is located within PEDL253 in the proven hydrocarbon fairway of the Humber Basin, on-trend with the Saltfleetby gas field and Keddington oilfield (Union Jack: 55%).

Studies at the Biscathorpe project, including at the Biscathorpe-2 well, have concluded that a possible material and commercially viable hydrocarbon resource remains to be tested.

"The joint venture intends to pursue a cost-effective side-track from the existing Biscathorpe-2 well site where the resource potential of the Basal Westphalian sandstone will be tested, and also the appraisal of the oil column demonstrated to be present in the deeper Dinantian Carbonate reservoir,” said Bramhill.

He added, "PEDL253 remains, in the opinion of the Company's management, one of the UK's largest onshore un-appraised conventional licences.”

The company said plans will be finalised by the joint venture partners during H2 2020.

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