Union Jack Oil plc has raised £5m to press ahead with drilling plans at West Newton in East Yorkshire, the company announced this morning.
A statement to investors said the money would also fund the acquisition and reprocessing of seismic data at West Newton and drilling of a side-track well at Biscathorpe in Lincolnshire.
The company said the money was raised from the sale of 3.33 billion ordinary shares of 0.025p each at a price of 0.15p. A Union Jack director, Joseph O’Farrell, subscribed to 33.33 million shares.
Union Jack has a 16.665% interest in the exploration licence at West Newton, PEDL183.
The licence operator, Rathlin Energy, has planning permission to drill two wells at a new site, called West Newton B. No work has begun there because a full archaeological survey has not yet been completed.
David Bramhill, executive chairman of Union Jack, said the West Newton B wells were planned for the first half of 2020.
“We also have in place the funds required to complete a seismic acquisition programme over other structures that have been highlighted over the licence area, that we believe hold significant upside potential over and above the West Newton project.
Earlier this month, the focus at West Newton A switched from gas to oil with the release of new data. Estimates of oil in place in the Kirkham Abbey reservoir at the site increased to between 146.4 million barrels to 238 million barrels.
Mr Bramhill said:
“Volumetric data on West Newton recently compiled by the operator, Rathlin Energy, indicates a material onshore discovery which we believe may prove to be of national importance.”
He added that future activity was also expected at Biscathorpe and Wressle, in Lincolnshire.
At the time of writing (12.25) the Union Jack share price was down 4.06%.
Updated to correct price of new shares