Union Jack announces start of drilling at Laughton

One of Union Jack Oil's newer investments achieved a major milestone this month, with the company announcing the start of drilling operations at the conventional Laughton-1 well.

The AIM-traded onshore oil and gas production and exploration firm said the well was situated within PEDL209, along the eastern side of the Gainsborough Trough - a proven hydrocarbon province within the East Midlands.

It was previously announced that Union Jack had agreed to acquire a 10% interest in the conventional interests within PEDL209 from Egdon Resources, in return for paying 16.67% of the cost of the Laughton-1 well.

That contribution would be financed from the company's existing cash resources, its board confirmed.

"We are pleased to be part of the team participating in the Laughton-1 well, which has potential for discoveries in several stacked reservoirs, similar to the Wressle-1 discovery in which Union Jack holds an 8.33% interest," said executive chairman David Bramhill.

"Even in this period of low oil and gas prices, our strategy of focusing within the UK onshore sector remains sound and our current portfolio of interests continue to be commercially appealing," he added.

The Laughton-1 well was spudded on 12 February, the company's board confirmed, and will target a structural trap at a depth of over 1,500 metres below ground level, defined on reprocessed two-dimensional seismic data.

Two other potential reservoirs - the Kilburn Sandstone and the Wingfield Flags - were also being targeted by the well.

Union Jack Oil also worked to reassure the local community about the operations on Monday, reaffirming the fact that the operations at Laughton did not and would not involved the process of High Volume Hydraulic Fracturing for shale gas - better known as fracking.