Union Jack Oil (UJO ) said all necessary consents have now been received to commence the proppant squeeze operation at the Wressle oil production site located in North Lincolnshire.
The UK-focused onshore hydrocarbon production, development and exploration company, which currently holds a 40% economic interest in the licences at the Wressle site, said it received the consents from the site’s operator, Egdon Resources U.K. Limited ("Egdon").
Located in Lincolnshire in the Humber Basin, PEDL180 and PEDL182 contain the substantial conventional Wressle-1 oil discovery which has proven reserves and significant upside.
UJO said the upcoming proppant squeeze operation is expected to optimise oil production from the Ashover Grit formation, one of the three productive reservoirs present, to a constrained rate of 500 barrels of oil per day gross (200 barrels per day net to Union Jack).
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.
The Wressle-1 well has been on a 24 hour production test since the oilfield was brought onstream on schedule in January 2021 with produced oil having been transported by road tanker to the Phillips 66 Humber refinery and sold under Egdon's existing oil sales contract.
Since the successful re-perforating exercise on the Ashover Grit reservoir, 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.
Union Jack Oil completed the reperforation of the Ashover Grit reservoir interval at the Wressle oilfield development back in February 2021 ‘successfully, safely and on schedule.’
Executive-Chairman of UJO, David Bramhill stated, "The Wressle development comprises a state-of -the-art, cutting edge, purpose-built, environmentally friendly surface facility.
The proppant squeeze operation is the final phase of achieving our targeted oil production level and generating optimum cash-flows from the Ashover Grit reservoir.
Revenues, post-proppant squeeze, especially in this now strong oil price environment will have a dramatic effect on the cash generating capabilities of Union Jack going forward."
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 16% in value since the beginning of 2021. The stock was trading 9.86% higher this morning at 38.45p following the announcement.
Reasons to UJO
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.
Follow News & Updates from Union Jack Oil here: