Market Abuse Regulation (MAR) Disclosure Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
18 January 2018
UNION JACK OIL PLC
(AIM: UJO)
Wressle Oil Field New Planning Application Process
Further to the announcement of 5 January 2018, Union Jack Oil plc ("Union Jack" or the "Company"), a UK-focused, onshore oil and gas production and exploration company, notes the announcement made this morning by the operator Egdon Resources plc ("Egdon") in respect of a forward plan for the Wressle oil field and to initiate a new planning application process following the appeal decisions made by the UK Planning Inspector ("Inspector"). The Board of Union Jack is fully supportive of this plan of action.
Union Jack's Chairman, David Bramhill also takes the opportunity to restate Union Jack's forward strategy on its wider UK onshore portfolio in today's favourable oil price environment.
David Bramhill, Executive Chairman of Union Jack, said: "We share the frustration of our shareholders given the UK planning obstacles we have encountered at Wressle, so we fully endorse the decisions of the Wressle joint venture partners to pursue all credible avenues to be able to bring this significant conventional oil discovery into production. In addition to the Wressle forward plan, I would like to reassure shareholders that as Union Jack possesses an attractive onshore portfolio of other producing assets and drill-ready exploration and appraisal targets that, in today's oil price environment, the Board has been alert to generating improved shareholder value by refining its forward strategy.
Our strategy remains to create shareholder value by building a successful UK onshore exploration and development company focused on conventional low-cost onshore production, development, and exploration drilling. Union Jack's attractive onshore portfolio contains producing oil fields and drill-ready exploration and appraisal targets which include the assets acquired recently from Cairn Energy being interests in the producing Keddington oil field and the shut-in historic Dukes Wood and Kirklington oil developments.
In addition, in November 2017 we purchased a 20% interest in the producing Fiskerton Airfield oil field, where we expect to increase further production through workovers and other remedial processes that are expected to enhance our cash flow materially. On behalf of the Fiskerton joint venture, Union Jack is also funding a 3D seismic re-processing exercise and our technical team will assist independently in re-mapping the area surrounding this oil field to identify further production opportunities from the existing producing reservoir.
With the oil price approaching $70, we are seeing a dramatic effect on the value of our oil production assets where, for the first time in more than two years, profit margins have increased given the expanding differential between the value of the oil produced and sold, compared to field operating costs that are largely fixed in nature. Today's oil price environment encourages us to discuss with the operator ways in which to expand oil production at the existing Keddington, Fiskerton Airfield, Dukes Wood and Kirklington facilities that all have existing planning approvals in place.
I highlighted in a recent announcement that it is also our intent that, going forward, Union Jack will undertake "a more hands on approach". My feedback from shareholders is that this intention is both welcomed and supported so we intend to be more flexible and entrepreneurial in the way we pursue opportunities while keeping to our reputation of applying strict financial and technical discipline.
We continue to review a number of near-term production, appraisal and drill-ready opportunities and, as part of that, we will also seek to expand our commercial partnerships with other like-minded industry participants to jointly pursue the acquisition of interests in late-stage onshore production and development projects at the asset level or by selectively investing in undervalued onshore focused companies."
Competent Person's Statement
The information contained in this announcement has been reviewed and approved by Graham Bull, Non-Executive Director of Union Jack, who has over 48 years of oil and gas industry exploration experience. Mr Bull is a member of the Petroleum Exploration Society of Great Britain, the American Association of Petroleum Geologists and a Fellow of the Geological Society of London.
For further information, please contact:
Union Jack Oil plc |
+44 (0)7787 160 682 |
David Bramhill |
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SP Angel Corporate Finance LLP |
+44 (0)20 3470 0470 |
Nominated Adviser and Joint Broker |
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Lindsay Mair |
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Richard Hail |
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Stephen Wong |
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Turner Pope Investments (TPI) Ltd |
+44 (0)20 3621 4120 |
Joint Broker |
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Ben Turner |
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James Pope |
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Egdon`s RNS published today follows:
18 January 2018
EGDON RESOURCES PLC
("Egdon" or "the Company")
Wressle Forward Plan
Egdon Resources plc (AIM:EDR) can advise the forward plan for the Wressle oil field development following the decision made by the Planning Inspector issued on 4 January 2018, to reject the appeals by Egdon against the two planning refusals by North Lincolnshire Council's Planning Committee.
Having taken legal and planning advice and having fully considered the specific reasons for rejection of the appeals as set out by the Inspector in his Decision Notice, the Company can advise that it will now:
a) Prepare and submit a new planning application to North Lincolnshire Council seeking its consent for the Wressle oil field development. This application, which will be submitted prior to the expiry of the current planning consent, will address in detail all matters highlighted by the Inspector in his Decision Notice to dismiss the appeals; and
b) Prepare and submit a new application to North Lincolnshire Council to extend the current planning consent (which now expires on 28 April 2018 following our successful appeal) to ensure that North Lincolnshire Council has sufficient time for consideration of the new application and to maintain consent for the current site.
We remain fully prepared to take these new planning applications through the appeals process should they be delayed or refused.
In addition, we continue to take legal advice in respect of the Decision Notice.
Mark Abbott, Managing Director of Egdon Resources plc, said:
"Egdon and its joint venture partners remain fully committed to the Wressle project and the proposed new application will address the limited reasons for refusal highlighted by the Inspector. I look forward to updating the market on Wressle in due course.
Elsewhere within Egdon's extensive portfolio, the coming period will see potentially high impact drilling activity at Springs Road, Biscathorpe, Holmwood and possibly North Kelsey, and the results of workovers at Fiskerton Airfield. We are also developing plans for the Keddington, Kirkleatham, Dukes Wood/Kirklington and Waddock Cross fields which will benefit from the improving oil price."
