Union Jack Oil inks farm-in deal with Egdon Resources

Oil and gas production and exploration company Union Jack Oil has inked a farm-in deal with Egdon Resources.

The AIM-listed group said it has agreed to farm-in to the conventional prospects of PEDL209 containing the Laughton prospect.

PEDL209 is situated along the eastern side of the Gainsborough Trough, which is a proven hydrocarbon province within the East Midlands.

Under the terms of the agreement, Union Jack will pay 16.7% of the cost of the Laughton-1 well, due to be drilled next month, for a 10% economic interest in the conventional resources in PEDL209.

Union Jack said its contribution towards the cost of the Laughton-1 well will be financed from existing cash resources.

Executive chairman David Bramhill said: "We are pleased to be able to participate in the drilling of the Laughton-1 well which has the potential for discoveries in several stacked reservoirs.

“The company has started 2016 with an active programme including the drilling of the Keddington-5 development well, currently drilling ahead, the soon to be spudded Laughton-1 well and the compilation of a Field Development Plan in respect of bringing the Wressle discovery, of which Union Jack holds an 8.33% interest into production later in the year.”

At 1046 GMT, shares were up 7% to 0.12p.