Union Jack Oil PLC (AIM:UJO), the UK-based exploration and production company, is set to expand its operations into the United States through a strategic alliance with Reach Oil & Gas Inc.
This partnership will primarily focus on numerous drilling and production ventures in Oklahoma, recognized as one of the top hydrocarbon-producing regions in the US,
Encompassing exploration, drilling, development, and potential production, the collaboration is nearing completion with joint venture agreements.
Chairman David Bramhill said the business had "actively seeking growth opportunities in regimes with sympathetic views towards the hydrocarbon industry, without compromising the world's environmental objectives and the aim of a Net Zero target by 2050".
He added: "To this end, today, we are announcing a strategic expansion into the United States by investments in Permian Basin focused royalties and an intended future collaboration, with Reach, on oil and gas investment opportunities and drilling projects in Oklahoma.
"Union Jack's existing onshore UK conventional production, development and exploration activities will remain our core focus for the foreseeable future. This distinct strategy has transformed the Company in to a self-sustainable, dividend paying, profit making entity."
This latesr deal follows Union Jack's entry to the States by acquiring three mineral royalty packages in the Permian Basin, Texas.
These purchases, brokered by Reach, include the Cronus Unit with a 25 well package, the Powell Ranch Unit with 15 wells, and the Palm Springs Unit with 10 horizontal wells. The total investment for these assets amounted to $854,070, with a 10% yield since December 2023.
With an estimated economic life exceeding 26 years and an internal rate of return over 20%, offer Union Jack the benefits of monthly income without the burden of development or operating costs.