Union Jack Oil plc is to pay £500,000 to become the largest single investor in the Wressle oil field in North Lincolnshire.
The deal, announced this morning, buys out Humber Oil & Gas Limited’s 12.5% interest in Wressle. It increases Union Jack’s stake from 27.5% to 40%.
The remaining partners are Egdon Resources, the operator, and Europa Oil & Gas, which each hold 30%.
A planning inspector granted planning permission in January 2020 for long-term oil production at the Wressle site, near Scunthorpe. Egdon has said it expected production to begin in the next six months.
David Bramhill, executive chairman of Union Jack, said this morning:
“When Wressle is commissioned and in production, it will result in an initial constrained production anticipated to be 500 barrels of oil per day gross, adding production of 200 barrels of oil per day net to Union Jack and transforming the Company’s financial position.
“We believe that when commercial oil production at Wressle is established, it will provide Union Jack with meaningful cash revenues. After taking operating costs into consideration, estimated net revenues are expected [to] propel Union Jack to a profitable revenue generating oil and gas production company.”
This morning’s statement said Union Jack would acquire Humber’s 12.5% interest in licences PEDL180 and 182, under a sale and purchase agreement for £500,000.
There is also a “deferred consideration” of £1,040,000, payable to Calmar LP, appointed by Celtique Energie Petroleum Limited, which originally sold its stake to Humber. This will be paid once commercial oil production is established, the statement said.
- In March 2020, Union Jack increased its stake in the Keddington oilfield in Lincolnshire, acquiring an extra 35%.