Union Jack Oil plc (LON: UJO and OTCQB: UJOGF), a UK and US-focused onshore hydrocarbon production, development, exploration and investment company, has announced substantial progress in its strategic expansion into the US and its rapidly growing oil and gas production and revenue generation activities.
Commercial Discoveries in Andrews Field
The company has declared both the Andrews 1-17 and Andrews 2-17 wells commercial discoveries. Since being placed on restricted and periodic test production, the Andrews 1-17 well has produced over 6,400 barrels of high-quality, ultra-light oil and 382,000 cubic feet of gas. The Andrews 2-17 well, which was perforated in the Hunton Limestone and completed in early August 2024, is now on test production, free flowing high-quality, ultra-light oil with no water. Both wells have been connected to a local gas pipeline, and product is being sold to Enerfin, a privately held natural gas and oil company with extensive pipeline infrastructure in the region.
Acquisition of Taylor and Moccasin Well Interests
Union Jack has agreed to acquire a 45% working interest in the Taylor and Moccasin wells, which are planned to be drilled back-to-back during Q4 2024. The Taylor well is an untested 3D seismic-supported Hunton Remnant prospect with secondary targets in the Misener and Wilcox sands. The Moccasin well is an untested 3D seismic-supported Hunton and Wilcox structure with secondary targets in Pennsylvanian Channel Sands and Base Pennsylvanian Unconformity Sand. Both prospects have strong analogue cases indicating robust economics on success.
Wilzetta Diana-1 Footwall Fold Drilling Project
Union Jack has an agreement with Reach to drill the Diana-1 well, to test a Footwall Fold Prospect within the Wilzetta Fault play, following the drilling of the Taylor and Moccasin wells. The main Wilzetta Fault zone target is underlain by a deeper structure that will also be tested with a high-impact well with estimated recoverable oil in excess of 200,000 barrels.
Rogers Secondary Recovery Project
The Rogers enhanced oil recovery project is located approximately two kilometres from the Andrews 1-17 discovery well and includes plans to significantly increase delivery from Rogers and S&M, two legacy production wells. Base case secondary recovery volumes calculated by the Operator suggest that up to a further 124,000 barrels of oil can be recovered. The company believes the project economics are highly attractive, indicating future gross revenues at prevailing oil prices of approximately US$7.5 million, and an IRR approaching 80%.
East Shawnee 3D Seismic Acquisition Programme
The East Shawnee 3D seismic acquisition programme is designed to identify further prospects along the Wilzetta Fault, also known as the Seminole Uplift. Reach is currently completing permitting with the landowners and will commence seismic acquisition in early October 2024. The objective of this 3D seismic acquisition programme is to generate prospects to be drilled during the 2025 drilling campaign.
USA Corporate Update
Since commencing activities in the US in early 2024, Union Jack has made significant progress in building a cash generating hydrocarbon venture and establishing a new corporate "North American brand". The company is already generating and banking oil and gas revenues from the Andrews field, where payback is expected on the company's initial investment within six months. The directors believe the balanced portfolio assembled in a short period of time represents excellent progress.
Union Jack was admitted to trading on the OTCQB Venture Market in the USA in April 2024 and trades under the ticker UJOGF. The company believes that dual trading of its ordinary shares on the OTCQB and the AIM Market of the London Stock Exchange will, in time, provide enhanced investor benefits.
Executive Commentary
David Bramhill, Executive Chairman of Union Jack Oil, commented: âWe are delighted at the initial success and significant progress being made in the USA alongside our partners, Reach. It is difficult to believe that our entry into North America at the start of the year would yield such material returns in such a short period of time. The hydrocarbon opportunities in Oklahoma are considerable and we look forward to drilling the Taylor and Moccasin wells during Q4 2024, followed by the Diana-1 well, all of which hold considerable upside on success.â
Miles Newman, Chairman of Reach commented: "We are very pleased that the Andrews 2-17 well has come in as expected from our 3D seismic. We are delighted to prove up the interpretations. The second well in the Andrews field encountered the productive Hunton reservoir 30 feet up-dip from the Andrews 1-17 well. The gas sales line has now been commissioned, on time and under budget. The well is free flowing good quantities of oil and gas and is water free. The Andrews field is being developed and we are very excited to turn our attention now to the Q4 2024 drilling campaign, targeting the Taylor and Moccasin Prospects."
Conclusion
Union Jack Oil has made significant progress in its US operations, with several successful projects and a strong pipeline of future opportunities. The company's commitment to expanding its North American presence is evident in its strategic acquisitions, drilling plans, and overall focus on building a sustainable and profitable business. The company's strong performance in the US market is a testament to its expertise and commitment to success.
