Union Jack Oil ups stake in Biscathorpe Prospect, raises £1.25m in placing

Union Jack Oil said on Monday that it has agreed to up its interest the drill-ready Biscathorpe Prospect to 22% and that it has raised £1.25m through a placing and subscription.

The company has agreed terms on a proposed farm-in for a further 10% licence interest in PEDL253, located in the South Humber basin and containing the Biscathorpe Prospect, where the Biscathorpe-2 conventional exploration well is planned to be drilled around mid-2018.

Union Jack also said it has entered into a memorandum of understanding with private company Humber Oil & Gas, whereby both parties will seek to co-invest in UK onshore hydrocarbon opportunities.

Humber's sole director, Frazer Lang, owns just under 397m shares in Union Jack, which represents a stake of around 9.2%.

In addition, the company has raised £1.25m through and placing and subscription, which will be used to expand its drilling obligations this year, progress the evaluation of opportunities within its existing portfolio and review new opportunities in collaboration with Humber under the memorandum of understanding.

Chairman David Bramhill said: "We are grateful for the continuing support of our existing shareholders and new investors who have participated in this oversubscribed fundraising. The funds raised will allow us to acquire an additional 10% interest in PEDL253, on attractive farm-in terms, and progress the drilling of the potentially high-impact Biscathorpe-2 conventional exploration well.

"We look forward to working with Humber on the Biscathorpe-2 well, and to a constructive and value-adding relationship with them in identifying new accretive acquisition opportunities going forward on which we can work together.

"The company is now in an even stronger position to deliver growth in reserves, production and asset value, while adhering to our principles of strict financial and technical discipline."

At 1025 GMT, the shares were down 9.8% to 0.095p.