Union Jack Oil (UJO) , a UK-focused onshore hydrocarbon explorer, announced a farm-in agreement with Reach Oil & Gas to acquire a 45% working interest in a new Andrews-1 well to be drilled in Q2 2024, to test the West Bowlegs Prospect in Seminole County, Oklahoma.
Andrews-1 is to be drilled early in Q2, with a geological chance of success estimated by Reach at 75%. Drilling is expected to take approx. 10 days to a depth of 5,200 ft. If successful, completion time is expected to be short at approx. 8 days, including perforating and flow-back.
Union Jack is to pay 60% of costs for Andrews-1 to earn a 45% economic interest. The cost of the well is estimated at approx. US$516k net to Union Jack. Going forward, the cost of further planned wells will be based on UJO's 45% interest.
Union Jack noted a recently acquired 3D seismic covering the Hunton Limestone, one of the main hydrocarbon reservoirs in Oklahoma. Further drill ready prospects covered by the 3D seismic have already been identified within the interest area earned by UJO.
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As previously indicated on January 29 2024, UJO's farm-in agreement with Reach has been finalised for an initial well in Seminole County, Oklahoma, scheduled to spud in Q2 2024. Andrews-1 is estimated to have a 75% chance of success with very quick completion time. If proven successful, the well could be in production within 1 month from spudding. The cost of the well net to Union Jack will be paid from existing cash reserves.
The high chance of success comes from similar low-cost wells in the area that produce within the range of 150 boe and 200,000 cubic feet of gas per day, with a quick ROI of 6 months. The target for the well is the Hunton Limestone, one of the main hydrocarbon reservoirs in Oklahoma.
Union Jack's decision to diversify its UK portfolio with US assets is in line with its strategy of acquiring significant interest in projects with quick expected development times, capable of adding significant cashflow. The partnership with Reach will open up further opportunities to access more similar prospects and drill-ready targets in Oklahoma. Targets have already been identified thanks to the recently acquired 3D seismic.
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