Union Jack Oil (AIM: UJO ) has announced positive preliminary results at West Newton B1Z ("WNB1Z") conventional appraisal well which is operated by Rathlin Energy (UK) Limited.
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.
It said WNB1Z, which is an appraisal of the discovery made previously in the WNA-1 well which is located some 2.5km away to the south, has encountered a substantial hydrocarbon column within a gross 62m interval encountered in the Kirkham Abbey formation.
UJO said today’s positive results provide a further material de-risking and is ‘a significant step’ forward in determining the development potential of the West Newton project.
UJO said it is now pending confirmation of logging and other information from the appraisal well, in conjunction with the WNB-1 well result. The company said it believes there is scope for the overall hydrocarbon column to considerably exceed the current identified interval.
The group noted that hydrocarbon-water contact is yet to be encountered at West Newton while production casing is now being run in preparation for a well flow testing programme.
Commenting on the results, David Bramhill, Executive Chairman of Union Jack said that today’s initial results of the WNB1Z appraisal well has exceeded the group’s expectations.
Technical studies will now need to be carried out to analyse WNB1Z well data, including correlation of the A1, A2 and B1Z well results and updated resource volumetric estimates.
Bramhill said this will have a bearing on the planning and timing of the programme which is “the next important milestone” in determining the development potential at West Newton.
He added, "The preliminary results from this well vindicate Union Jack`s faith and financial commitment over the past two years to what Union Jack`s management has always believed to be an exceptional UK onshore hydrocarbon enterprise."
Shares in Union Jack Oil have increased by 45% over the past two weeks from 0.11p to 0.16p to open 17.10% higher this morning at 0.20p following the announcement.
Reasons to follow Union Jack Oil
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, 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.
The WNB1Z side-track from the WNB-1 well commenced during November 2020 and reached a Measured Depth of 2,114 metres. 18 metres of core has been successfully cut and recovered from the Kirkham Abbey formation and logging operations have been completed.
The initial log and petrophysical data obtained from the West Newton B1Z well correlates positively with the results from the conventional WNA-1 discovery and WNA-2 appraisal wells.
The company has highlighted that volume expectations will be initially updated following further core and log analysis and will also be repeated following the WNB1Z production test.
North Kelsey
In recent weeks, UJO has 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.
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