Union Jack buys portion of royalties in North Sea oil and gas fields

The largest investor in the onshore Biscathorpe and Wressle oil fields in Lincolnshire has announced its first involvement in the North Sea.

Union Jack Oil has bought rights to a portion of the royalties of the Claymore, Piper and Scapa fields in the central North Sea.

This will give it ownership of a proportion of the resources or revenues, without contributing to operating costs.

In a statement, Union Jack said it had bought a 2.5% cash generating royalty interest for £93,730.

This represented the company’s first royalty investment in what is known as the Claymore and Piper Complex, the statement said. Further transactions were planned this year, it added. Until now, Union Jack’s interests have been in Lincolnshire, East Yorkshire and Nottinghamshire.

Union Jack’s executive chairman, David Bramhill said:

“The royalty provides Union Jack with the benefits of an attractive cash flow stream and high yields from North Sea oil and gas production without the accompanying capital and operating costs associated with direct participation in the underlying oil field developments and infrastructure.

“The Royalty’s superior returns and cash flow characteristics are consistent with Union Jack’s wider strategy and objectives to invest in the UK oil and gas sector.”

The statement said the Claymore and Piper complex, north east of Aberdeen, had produced more than 1.8 billion barrels of oil and 262 billion cubic feet of gas to date. It said 6 million barrels of oil and 2 billion cubic feet of gas were produced in 2020. The complex is operated by Repsol Sinopec Resources UK Limited.

The statement said the royalty purchase was from Cambridge Petroleum Royalties. Raymond Godson, a director of Cambridge Petroleum Royalties, is also a director of Union Jack Oil.

  • Last week, Union Jack Oil announced it had consolidated shares: one new consolidated ordinary share for every 200 existing ordinary shares.  

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