Union Jack Oil said this morning it had acquired an extra 35% stake in the Keddington oilfield in Lincolnshire.
The deal buys out Terrain Energy’s investment in PEDL005R and increases Union Jack’s stake to 55%.
Egdon, the site operator, holds the remaining 45%.
In a statement today, Union Jack said the acquisition cost £200,000. Under the deal, it said it took on costs of £35,000 for site activities. The Oil & Gas Authority must approve the transaction.
The deal also gives Union Jack 15% of PEDL339, the statement said. This licence includes part of the Louth Prospect, which has gross prospective resources of 600,000 barrels of oil, it said.
At the time of writing (12.03pm), Union Jack hares were down 12.23% at £0.11.
This is the latest in a series of deals by Union Jack in recent years.
- The company doubled its interest in Keddington in 2017 to 20% by buying out Cain Energy’s holding.
- In November 2018, it signed a farm-in agreement with Rathlin Energy for a 16.665% interest in PEDL183 in East Yorkshire, which includes the West Newton oil and gas site.
- In June 2018, Union Jack increased its stake in the Wressle licences in North Lincolnshire from 15% to 27.5%.
- In March 2018, it announced a farm-in at Biscathorpe, in Lincolnshire, to increase its interest from 12% to 22%.
- In November 2017, it acquired 20% of the Fiskerton airfield oilfield in Lincolnshire.
The company’s executive chairman, David Bramhill, said of the Keddington deal:
“This Acquisition is an inexpensive transaction and provides an immediate uplift in oil production, which will have a beneficial effect when consolidated into the production revenues generated from Fiskerton Airfield and the expected “first oil” from the Wressle development later in the year.
“Keddington also contains major scope for expansion which could be achieved by drilling a relatively inexpensive development well from the existing Keddington site.”
Keddington currently produces about 28 barrels of oil per day. The gross contigent resource is 567,000 barrels.
According to Union Jack’s statement, Egdon is considering drilling a sidetrack well at Keddington. The lease has been extended to 2029 and planning permission runs until 2058 with consent for drilling two more wells.
In January 2016, Egdon drilled Keddington-5, a sidetrack development well. It was suspended in February 2016 for future production testing but there was no confirmation that the well was commercially viable.