This
announcement contains inside information for the purposes of
Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms
part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
27 February 2024
Union Jack Oil plc
("Union Jack" or the
"Company")
West Newton Drilling
Update
Early Gas Development
Plan
Union Jack Oil plc (AIM: UJO), a UK focused
onshore hydrocarbon production, development and exploration company
is pleased to offer a positive update in respect of planned future
drilling and the potential development at West Newton PEDL183, in
which the Company holds a 16.665% economic interest.
West Newton is located onshore UK in East
Yorkshire, within the Western Sector of the Southern Zechstein
Basin which contains the significant West Newton A1, A2 and WNB-1z
discoveries.
Following several months of technical
evaluation, the West Newton Joint Venture partners, Union Jack,
Reabold Resources plc ("Reabold") and Rathlin Energy UK Ltd
("Rathlin"), have agreed a revised drilling programme utilising the
West Newton A drilling site ("WNA Site").
HIGHLIGHTS
· A
proposed well ("WN-A3") planned to be drilled during late 2024 will
be twinned with the West Newton A-1 discovery well ("WN-A1"), which
was not tested
·
WN-A1 is interpreted as having a 27 metre gas column within
the Kirkham Abbey formation ("KA Formation") as indicated on the
logs of the WN-A1 well
·
WN-A3 will be directional, offering significant cost savings
compared with a horizontal well
· An
additional material secondary target in the deeper Permian
Rotliegend Sandstone will also be evaluated during drilling of the
WN-A3 or by the re-entry of WN-A1
· A
feasibility study is underway for a single gas well development
plan at WN-A3 well to follow successful testing and well
completion
·
Planning is already in place to drill and produce from the
WNA Site whilst other associated approvals are being
accelerated
·
Revised drilling plan is cost-effective with an above average
chance of success, offering a rapid early-stage development
scenario with access to significant early cash flows if
successful
Discovery in
the Kirkham Abbey Formation Principal Target
The WN-A1 well, drilled in 2013, is interpreted
as having encountered 27 metres of potential gas pay at the top of
the KA Formation. This figure was calculated from the Computer
Petrophysical Interpretation ("CPI"), using electrical and mud logs
over the interval.
The KA Formation was perforated and cleaned
using 15% hydrochloric acid. After removal of the acidising
work-string and during preparation to run the production
work-string the well started to flow fluid and the blind rams were
closed for safety reasons to establish control of the
well.
After numerous clean up attempts failed, WN-A1
was subsequently shut-in and suspended under normal operational and
safety procedures.
The conclusion drawn from these well operations
was that due to severe damage to the KA Formation it was not
possible to obtain a valid hydrocarbon production test to surface
of the 27 metre pay-zone shown on the CPI log.
Deeper
Material Rotliegend Zone Secondary Target
A re-evaluation of the downhole logs of WN-A1
by the Joint Venture's technical teams also indicates a possible
seven metre gas column in the Permian Rotliegend Sandstone, the
main reservoir for the prolific Southern Gas Basin
gasfields.
The gas is sourced from the underlying
Westphalian and Namurian sediments trapped in structures sealed by
the overlying Zechstein evaporites.
Preliminary mapping of the base Zechstein at
West Newton indicates low-relief structures as observed
offshore.
The nearest offshore Rotliegend field was the
Amethyst complex centred on block 47/14a within the Southern Gas
Basin, containing 1.2 trillion cubic feet of gas in place,
producing approximately 795 billion cubic feet of gas and 5.4
million barrels of condensate, from a series of low-relief
structures trending South-East to North-West.
Within the UK onshore, the Caythorpe field,
approximately 30 kilometres north of West Newton produced 6.67 bcf
of gas with associated condensate from the Rotliegend, displaying
porosities up to 19% and permeability up to 500md, with gas also
being produced from the overlying Zechstein.
Calculations for the Rotliegend zone in WN-A1
indicate similar porosities to those seen at Caythorpe. Core was
not cut from the WN-A1 well, however, the logs indicate drilling
mud invasion over the Rotliegend interval which is taken to
indicate effective permeability.
Residual gas is also calculated below the base
of the seven-metre gas column in the Rotliegend
Sandstone.
West Newton
Early Production Plan
A feasibility study is being undertaken by
independent energy consultants CNG Services Limited on a single
well development and gas export plan associated with WN-A3 to
follow successful testing ("West Newton Gas Export Feasibility
Study").
The scope of the West Newton Gas Export
Feasibility Study is to determine the technical and economic
viability of a single well development plan, with production from
WN-A3, processed from a modular plant and a 3.5 kilometre pipeline
from the WNA Site to the National Transmission System, at an
existing above-ground installation.
Commercial gas production could be brought to
market within months of a successful production test, resulting in
a materially reduced capital investment which provides significant
early cash flow whilst additional activity is carried out on the
further development of the West Newton project.
Executive
Chairman of Union Jack, David Bramhill, commented:
"Together with our Joint Venture partners at West Newton, we
have embarked on delivering a viable drilling programme, planned to
be executed in late 2024, with the potential for an early single
gas well development following successful testing.
"We plan to expedite the drilling of West
Newton with the deviated WN-A3 appraisal well as soon as all
remaining regulatory permissions have been granted. Discussions are
already underway with the relevant authorities and work has
commenced to progress drilling.
"Our revised drilling plan offers significant
cost-savings without compromising any aspects of the project.
The objective is to develop what we know to be a material onshore
gas resource located in an area with excellent access to local and
national infrastructure and an attractive domestic gas off-take
market.
"The secondary, deeper Rotliegend sandstone
target also provides potential material upside to the value of the
West Newton Project.
"Going forward, the West Newton drilling plan
is cost-effective with an above average chance of success, offering
a rapid early-stage development scenario with access to significant
early cash flows, if successful."
Competent
Person's Statement
In accordance with the "AIM Rules-Note for
Mining and Oil and Gas Companies", the information contained within
this announcement has been reviewed and signed off by Graham Bull,
Non- Executive Director, who has over 47 years of international oil
and gas industry experience.
For
further information, please
contact
Union Jack Oil plc
info@unonjackoil.com
David Bramhill
SP
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