Union Jack Oil PLC (LON:UJO) chairman David Bramhill told investors that the future looks bright for the Wressle field after the company increased its stake in the project.
It comes as Wressle advances towards production start-up in early 2017.
Union Jack Oil agreed to acquire 3.34% of Wressle in a deal with partner Europa Oil & Gas (LON:EOG), increasing its stake in the Lincolnshire based project to 11.67%.
The small cap UK oiler is paying £600,000 for the stake, and in doing so it gives the whole project a value of around £18mln.
"We are delighted to be able to increase our position in Wressle as it is an attractive near term production asset where first commercial oil is expected to flow at an estimated constrained rate of 500 barrels of oil per day gross in early 2017, as well as providing Union Jack with further exposure to the promising Broughton North Prospect
“The future looks bright for this project given the early 2017 production target and the additional potential for multi-development opportunities we see within PEDL180 and 182."
It comes after Union Jack Oil raised £700,000 in a share placing (announced last week) and after a competent persons report confirmed Wressle’s commerciality (on Monday).
Wressle, which is operated by 25% stakeholder Egdon Resources Plc (LON:EDR), is expected to start oil production at a rate of 500 barrels of per day by early 2017.
The project is being fast-tracked to production following a successful exploration well which delivered excellent flow rates in testing last summer.
Egdon Resources highlighted on Monday that the new estimate - 14.18mln barrels of oil initially in place, of which 2.15mln barrels is considered discovered - had exceeded its expectations.
Mark Abbott, Egdon managing director, said: “The CPR has independently confirmed the commercial viability of the Wressle field development with overall oil and gas Reserves and Contingent Resources exceeding our original pre-drill estimates.”