Union Jack Oil PLC (LON:UJO) has struck a deal with Egdon Resources Ltd for a 20% stake in the Fiskerton Airfield oil project in Lincolnshire.
To acquire the stake, Union Jack is paying around £137,000 and it will cover costs related to new seismic reprocessing, estimated at £35,000.
WATCH: Union Jack Oil takes stake in Fiskerton project in Lincolnshire
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Fiskerton has been producing at a rate of 16 barrels of oil per day and, as highlighted in Monday’s statement, the operation has suffered from a lack of investment.
Low-cost well interventions are expected to increase output to between 30 and 40 bopd, while the evaluation of reprocessed 3D seismic data could lead to new drilling possibilities that would have the potential to increase output further.
"The board is delighted with the acquisition of the attractive producing Fiskerton Oilfield at a modest cost given the upside potential that we believe possible and expect will be borne out in the results of the proposed 3D seismic re-processing,” said David Bramhill, Union Jack executive chairman.
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“As with our recent increased interest in the producing Keddington Oilfield, Fiskerton adds additional oil production and cash-flow to Union Jack.”
He added: “I am sure that shareholders will support and welcome Union Jack's intention to have a more ‘hands on approach’ to progressing the many attractive opportunities in our existing portfolio and in relation to evaluating further acquisitions of production opportunities.”
Fiskerton was discovered in the mid-nineties and it was estimated to host some 2.2mln barrels of oil in place, production to date has amounted to around 440,000 barrels of oil.