Union Jack Oil plc (LON:UJO) a UK-focused onshore hydrocarbon production, development and exploration company has agreed terms with Rathlin Energy Limited on a proposed farm-in for a 16.667%. Executive Chairman David Bramhill joins DirectorsTalk to discuss the news. David talks us through the proposed Farm-in details, the 2.5 million fundraiser, the next steps regarding the farm-in and what news flow investors should be looking out for over the coming months.
Highlights:
· Acquiring a 16.667% interest in the large 176,000 acre PEDL183 licence containing the significant West Newton A-1 UK onshore gas discovery
· Attractive farm-in terms with no cash costs up front with all funding going towards drilling and licence costs
· Best Estimate Contingent Resources of 189 Bcf of gas equivalent or 31.5 million barrels of oil equivalent (gross) assigned to West Newton in a Competent Persons Report
· West Newton A-1 gas discovery is on-trend with the prolific offshore Hewett gas complex
· Proximity to existing gas pipelines and infrastructure
· Drill-ready conventional appraisal well planned to be drilled in Q1 2019 to appraise the gas discovery
· Compelling immediate and future economic value from a development of the gas discovery alone
· Operator’s NPV10% of US$247 million and 52.5% ROR for the gas discovery alone
· Attractive acquisition metrics of less than US$0.30 per barrel of oil equivalent for the gas discovery alone
· Considerable upside potential from the lower Cadeby Reef oil exploration target underlying the gas reservoir that will also be drilled with Best Estimate Prospective Resources of 79.1 million boe (gross)
· Further significant upside potential from other numerous prospects and leads
· A successful appraisal well in Q1 2019 is expected to deliver a major onshore gas development