On 14 July 2015, Union Jack acquired a 10% interest in PEDL005(R) incorporating the Keddinton Oilfield (“Keddington”).
PEDL005(R) is located in Lincolnshire and holds the Keddington oilfield, the Louth and North Somercote prospects.
Keddington has produced in excess of 300,000 barrels of oil to date and is currently producing approximately 30 to 35 barrels of oil per day gross with associated gas from two wells, Keddington-4 and Keddington-3Z.
Planning permission is in place for a new appraisal/development well that is currently planned to be drilled as a side-track to the Keddington-4 well in Q4 2015. Should this well be successful, the Board believes that the production rate at the Keddington has the potential to increase to approximately 125 barrels of oil per day gross.
On completion of this transaction Union Jack will own a 10 per cent. interest in Keddington and the associated infrastructure and production facilities. Additionally, Union Jack will immediately receive 10 per cent. of all production revenues going forward.
The Operator is seeking to maximise the value of the “Greater Keddington” area through two additional drill-ready prospects located within PEDL005(R) namely Louth and North Somercotes. As part of the Acquisition, Union Jack will obtain a 10 per cent. interest in the Louth and North Somercotes prospects.
Under the terms of the Acquisition, Union Jack would also earn a 10 per cent. interest from Egdon in any new licence block awarded to the existing PEDL005(R) joint venture group in the UK 14th Landward Oil and Gas Licensing Round, which contains the mapped extension of the Louth prospect.
The Operator believes that a “Greater Keddington” development plan concept using existing Keddington infrastructure and facilities will enhance the economics of individual exploration prospects and potential in comparison to evaluating them as stand-alone developments.
North Somercotes Prospect
Located on the margins of the Humber Basin, the North Somercotes gas prospect is within PEDL005(R) to the north of the Saltfleetby gasfield and is estimated by the Operator to contain gross mean Prospective Resources of 11.0 billion cubic feet of gas. North Somercotes is estimated by the Operator to have a geological COS of 25 per cent.
|Keddington Oilfield||PEDL005(R)Excluding Keddington|
|Egdon Resources U.K. Limited||45%||65%|
|Nautical Petroleum Limited||10%||10%|
|Terrain Energy Limited||35%||15%|
|Union Jack Oil plc||10%||10%|