Union Jack Oil PLC (AIM:UJO, OTCQB:UJOGF) has announced its latest American acquisition, with a deal to pick up a 45% working interest in the Rogers enhanced oil recovery (EOR) project in Seminole County, Oklahoma.
The operation comprises two production wells, Rogers and S&M, and an injector well, Coker.
The deal is valued at US$105,000 and it comes without any additional promote or back-costs.
Scheduled to commence in July, the Rogers Project has a budgeted capital expenditure of approximately US$133,000 for the remainder of the current financial year.
Rogers is expected to see another 124,000 barrels of oil, through EOR, with the project’s gross revenues forecast at US$7.5 million – giving an internal rate of return of 80%, and a payback period of about 18 months post-CAPEX.
Executive chair David Bramhill described himself as ‘delighted’ and highlighting the low capital cost of the new venture, he pointed to “strong potential” for incremental production gains and timely payback on investment.
"The Rogers Project offers an excellent strategic and locational fit with Union Jack's existing participation at the Andrews 1-17 well, helping to provide operational synergies and increase production and revenue by building critical mass in the vicinity of this existing commercial producer,” Bramhill said in a statement.
"I look forward to updating the market on stabilised production rates from Andrews 1-17 in due course, once a permanent electricity supply and upgraded pump jack have been installed.
“These site upgrades are expected to materially enhance current flow rates, with up to 100 barrels per day of high quality (46 º API gravity) oil having already been recorded at Andrews 1-17 during May 2024.”
He also told investors that planning for the follow-on Andrews 2-17 well, which is also targeting Oklahoma's prolific Hunton limestone, is continuing,
Andrews 2-17 is expected to spud in “the coming weeks”, he added.