Union Jack Oil (AIM: UJO) said planning permission to drill a conventional exploratory oil well at North Kelsey-1 has been approved by the Lincolnshire County Council Planning Committee.
The group noted the announcement made this morning by Egdon Resources in regard to the North Kelsey-1 site is located within the PEDL241 licence, in which UJO owns a 20% stake.
The North Kelsey Prospect has been mapped from 3-Dimensional seismic data and has potential for oil in up to four stacked conventional Carboniferous reservoir targets: the Chatsworth Grit, Beacon Hill Flags, Raventhorpe Sandstone and Santon Sandstone.
Egdon Resources has calculated the Prospective Resources to range from 4.66 million barrels up to 8.47 million barrels, with a Mean Resource volume of 6.47 million barrels.
Shares in Union Jack Oil have climbed gradually over the past three months and were trading 5.26% lower at 0.225p on Monday afternoon.
For clarity, the company highlighted that operations at the site will not involve the process of hydraulic "fracking" for shale gas or shale oil either now or in the future.
This is because this part of Lincolnshire does not have the specific rock-formation types that contain shale gas as confirmed by the British Geological Survey in 2013, it outlined.
David Bramhill, Executive Chairman of Union Jack commented: "We are naturally pleased at this positive decision. Drilling plans can now be progressed for 2021, providing an additional potentially value adding project to our drilling and development portfolio."
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