Union Jack Oil announced this morning it is to lend £1m to Egdon Resources, the operator of the Wressle oil site in north Lincolnshire.
Long-term oil production at Wressle got planning permission in January 2020, after two public inquiries and multiple planning hearings at North Lincolnshire Council.
Work to stimulate oil production at the site is now expected early next year.
In a statement to investors, Union Jack said the 18-month loan would “assist in the development of the Wressle oil field”.
It will be secured against a 25% stake in the two Wressle licences, PEDL180 and PEDL182, as well as the Wressle project and infrastructure.
Update on Wressle
Egdon said today storage tanks and the inspection gantry had been installed at Wressle. Work was underway on installation of electrical and control systems, it said.
The delivery of remaining equipment was expected in December 2020, Egdon added
Workover operations to improve oil flows had been deferred until January 2021, the company said, to eliminate “possible operating and supply chain issues associated with the December festive shutdown”.
The workover rig would be mobilised “immediately in the new year”, Egdon added. The workover would be completed and initial oil flows “anticipated later in January 2021”.
Previous statements earlier this year expected the first oil from Wressle in the second half of 2020.
Egdon confirmed in September that it no longer planned to use acidisation to improve oil flows (see DrillOrDrop report).
It still plans to use a proppant squeeze, where a slurry of gelled liquid and proppants is injected under press to open fractures in the surrounding rock formation.
The Environment Agency (EA) described the proposed operation at Wressle as “a small-scale hydraulic fracturing activity”. The process at Wressle, expected to inject 150m3 of slurry at 9,000psi, will need a hydraulic fracture plan, to be approved by the EA and the Oil & Gas Authority.
If the proppant squeeze is not successful, Egdon has said it will drill a sidetrack well.
Estimated gross oil production from Wressle is 500 barrels a day.
- Union Jack announced today that executive director Joseph O’Farrell had bought 19.3m shares at 0.025p each and David Bramhill, executive chairman, has bought 19.4m shares at 0.129p each.