Union Jack and Humber co-investing in two licence areas

UK-focussed onshore hydrocarbon production, development and exploration company Union Jack Oil announced on Tuesday that it has entered into a sale-and-purchase agreement with Celtique Energie Petroleum, whereby Union Jack and its commercial partner Humber Oil & Gas will each make an investment to acquire a 16.25% interest in PEDL201 (Widmerpool Gulf) and a 12.5% interest in PEDL181 (Humber Basin) for a cash consideration of £7,500 each.

The AIM-traded firm said it was the second investment it had made alongside its commercial partner in low-cost onshore oil and gas licences.

Both licences had no immediate conventional or unconventional work programme commitments or planned activities.

"We are delighted to have been able to make a further investment in attractive licences in the Widmerpool Gulf and Humber Basin at nominal cost, alongside our commercial partner, Humber Oil & Gas,” said Union Jack executive chairman David Bramhill.

“Union Jack will hold these licences as an investment given the board's view that they both have significant value upside given the potential for future unconventional oil and gas exploration activities in the UK onshore.

“While further work will need to be undertaken by the onshore oil and gas industry in the UK to prove the commerciality of unconventional oil and gas projects, the transaction value ranges proposed by Edison provide an encouraging valuation indicator and supports Union Jack's confidence that the risk/reward balance of these investments is favourable to our shareholders.”