Union Jack Oil PLC (AIM:UJO, OTCQB:UJOGF)'s latest American foray, a deal to pick up a 45% working interest in the Rogers enhanced oil recovery (EOR) project in Seminole County, Oklahoma, has been welcomed by broker Shore Capital.
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.
"The transaction deepens Union Jack’s partnership with Reach Oil & Gas and demonstrates the pace at which it can increase the scale of its US production base," said Shore in a note to clients.