Union Jack takes 20pc chunk of Egdon's Fiskerton

The AIM-traded firm said cash consideration for the 20% interest, payable from existing cash resources, was approximately £137k - including a pro rata share of the operator`s legal, licence, planning and acquisition costs.

Union Jack said its initial review of historic 3D seismic and drill logs suggested that there was upside potential in the oil resources at Fiskerton.

It would fund a 3D seismic re-processing exercise on behalf of the joint venture to assist in re-mapping the area over approximately 24 square kilometres surrounding Fiskerton, to identify further production opportunities from the reservoir.

Union Jack’s board said it was estimated that initial interpretations from the 3D seismic re-processing would be available during the first half of 2018, with the cost of the exercise to Union Jack being £35k.

The effective date of the agreement was 3 November, the board confirmed, adding that Union Jack would receive 20% of all production revenues from Fiskerton from that date.

Completion of the acquisition remained subject to Oil and Gas Authority approval.

“The board is delighted with the acquisition of the attractive producing Fiskerton Oilfield at a modest cost given the upside potential that we believe possible and expect will be borne out in the results of the proposed 3D seismic re-processing,” said Union Jack Oil chairman David Bramhill.

“As with our recent increased interest in the producing Keddington Oilfield, Fiskerton adds additional oil production and cash-flow to Union Jack.”

Bramhill said he was “sure” that shareholders would “support and welcome” Union Jack's intention to have a more hands on approach to progressing the opportunities in its existing portfolio, and in relation to evaluating further acquisitions of production opportunities.

“In the meantime, we continue to work with our partners on progressing the drill-ready Biscathorpe-2 and Holmwood-1 exploration wells, combined with a continued focus on the significant oil discovery at Wressle and its associated appeal in order to bring it into production.

“While we await the outcome of these events, Union Jack will continue to evaluate and, where appropriate, be innovative in progressing opportunities in its existing portfolio and in evaluating new acquisition opportunities.”