Union Jack Oil PLC (AIM:UJO) has further expanded its footprint in Oklahoma, striking a new farm-in deal with partner Reach Oil & Gas.
The British company is acquiring a 75% interest in the Wilzetta project, where a well is now planned.
It expects drilling will start on the first Wilzetta well, targeting the Footwall Fold prospect, in the third quarter of 2024, whilst a seismic exploration programme is also planned.
Union Jack executive chair David Bramhill, in a statement, highlighted that typical wells on the Wilzetta fault can produce around 250 barrels of oil per day, to deliver ‘pay-back’ on investment within around three months.
As Bramhill highlights, this is the latest news in Union Jack’s expansion in Oklahoma and the United States.
“I am pleased to be able to bring another two, highly prospective farm-in projects to the Company's Oklahoma, USA, drilling and Mineral royalty portfolio,” Bramhill said.
“The company assembled an initial balanced collection of value adding assets, comprising three cash yielding Mineral royalties, holding attractive upside potential, and a quality portfolio of near-term, exploration, drilling and seismic acquisition programmes that we believe have an excellent chance of success.”
Union Jack will pay some $277,000 of Reach’s back costs and the gross well cost, of the first well, are estimated at around $1 million.
The AIM-quoted firm will be earning a 37.5% interest in the seismic exploration area, with the partners planning to capture both 2D and 3D data.
Counting down to drilling
Union Jack now looks forward to the drilling of the first of its new wells in Oklahoma, counting down to the start of the Andrew-1 well, expected within a matter of months.
"We expect to see the first of our wells, being the Andrews-1 on the West Bowlegs Prospect, drilled in early Q2 2024 and we are pleased to see good progress already being made with the well location staked and site construction to commence shortly,” Bramhill said.
"Reach has also informed Union Jack that an intent to drill was submitted to the Oklahoma Corporation Commission on 8 February 2024 and that permit approval can typically be expected within 14 days.
"The Andrews-1 well will be followed by a high-impact well on the Wilzetta Fault later in 2024, where the potential rewards are significant.”
Staying active in UK
Bramhill added: “In the UK, we have planned programmes, which include the drilling and development of the Penistone Flags formation, containing material gas reserves on our flagship Wressle development.
“We also anticipate the ‘renaissance’ of the West Newton gas project, which I am confident will become the focus of significant drilling and development activity during 2024 and beyond.”