Union Jack Oil receives consent to store crude oil at Wressle Oilfield

Union Jack Oil (UJO ) said it has received consent from the North Lincolnshire Council which will allow for the storage of crude oil at the conventional Wressle Oilfield Development. 

Union Jack holds a 40% economic interest in the Wressle development in North Lincolnshire on the Western margin of the Humber Basin which holds licences PEDL180 and PEDL182.  

The UK focused onshore hydrocarbon production, development and exploration company reiterated news from Egdon Resources, the Operator of Wressle, that consent has been received to store crude oil under the Planning (Hazardous Substances) Regulations 1992.  

The grant of consent will allow full use of the installed oil storage capacity at site of around 2,000 barrels and will enable full production from the Wressle-1 well to be achieved following the proppant squeeze, which is expected to increase overall production to a constrained 500 barrels of oil per day (that’s around 200 barrels net of production to UJO). 

Commenting on the news that the partners had received consent, David Bramhill, Executive Chairman of UJO said: "The JOA partners are pleased to have received this final consent, which will allow the production target at Wressle to be realised following the proppant squeeze operation which is planned to be executed and completed during June 2021." 

Earlier this month, Union Jack OIl told investors that it had received all the necessary consents to commence the proppant squeeze operation at the Wressle oil production site. 

To date, independent data acquired by the JOA partners says this predicted flow rate should be achievable post-proppant squeeze. Looking ahead, the proppant squeeze operation is expected to be completed and optimum oil production achieved during June 2021.  

Since the successful re-perforating exercise on the Ashover Grit reservoir which was completed ‘successfully, safely and on schedule’ back in February 2021, UJO has seen increased oil production at the site exceeding JOA partner expectations. Pre-proppant squeeze with high quality free flowing oil is also being produced and no water is present.  

View from Vox  

Wressle is believed to be economically robust with an estimated project break-even price oil price of $17.62 per barrel and expected to result in an initial constrained production rate of 500 barrels of oil per day gross, or 200 barrels of oil per day net to Union Jack. Positive news on production at Wressle is positive for UJO as a 40% shareholder in the project.  

Shares in Union Jack Oil have increased by over 25% in value since the beginning of 2021. The stock was trading 1.28% higher this morning at 38.5p 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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