In a statement, just after Friday’s market close, the onshore oil and gas junior firm responded to market speculation confirming it is “taking market soundings from investors” over a potential £5mln placing.
“It is intended that the majority of the proceeds will be used to fund further drilling activity at the company's flagship asset, West Newton, including one vertical well and one horizontal well, and acquire and reprocess new seismic data at West Newton,” Union Jack said in a statement.
“A portion of the proceeds may also be allocated to drill a new side-track well at Biscathorpe.”
Earlier this month, the company revealed it had been informed by operator Rathlin Energy that the Kirkham Abbey reservoir in the West Newton project area contains a base case 146mln barrels of oil-in-place and a best case of 283mln barrels.
This liquid element is much higher than originally estimated, David Bramhill, Union Jack’s executive chairman said in a statement
Raithlin came to its conclusion after analysing a 28 metre core sample from Kirkham recovered during the recent drilling of the West Newton A2 well.
Bramhill, at that time, said: "We are looking at an onshore project with potential offshore resources, and to date, West Newton is demonstrating the elements required to become a significant conventional hydrocarbon development project in the future," Bramhill added.