Union Jack to buy additional interest in Wressle field

Onshore oil and gas production and exploration group Union Jack Oil has signed a sale and purchase agreement with Celtique Energie Petroleum to acquire a further 3.33% interest in the Wressle oil project and the Broughton North exploration prospect for £600,000.

The company currently holds an 11.67% interest in both licences and following completion of the acquisition, it will hold a 15% stake.

The consideration will be paid for from monies received in respect of the placing announced back in February of around £1.4m before expenses, with funds raised being used to acquire further interests in assets contained within Union Jack`s existing portfolio of near term production and drill-ready prospects.

The licences contain the Wressle-1 oil discovery well from which first commercial oil is expected to flow at an initial constrained rate of 500 barrels of oil a day gross.

Substantial contingent resources have also been confirmed in the Penistone Flags reservoir at Wressle that are over and above the oil and gas reserves identified in the Ashover Grit and Wingfield Flags reservoirs. In addition, PEDL182 also contains the promising Broughton North Prospect.

Union Jack is currently funded for its existing commitments, which include the drilling of the Biscathorpe-2 and Holmwood-1 conventional exploration wells.

At 0825 GMT, the shares were up 5.5% to 0.15p.