Union Jack Oil PLC (LON:UJO) has agreed to acquire an additional 35% of the Keddington oil field.
The producing field currently yields around 28 barrels of oil per day, and, the agreement sees Union Jack increase its stake to 55%.
A planned in-fill drilling programme will aim for a “multi-fold” increase in production volume via “relatively inexpensive” side-tracks.
With the agreed acquisition, Union Jack’s share of the project’s contingent resources increases to 311,000 barrels, and, prospective resources rise to 349,250 barrels.
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The company is also acquiring a 15% interest in the adjacent PEDL339 property which hosts the Louth prospect, estimated to hold some 600,000 barrels of oil, plus further prospective resource potential.
Union Jack executive chairman David Bramhill said: “This acquisition is an inexpensive transaction and provides an immediate uplift in oil production, which will have a beneficial effect when consolidated into the production revenues generated from Fiskerton Airfield and the expected ‘first oil’ from the Wressle development later in the year.
“Keddington also contains major scope for expansion which could be achieved by drilling a relatively inexpensive development well from the existing Keddington site.”
UJO is paying £200,000 consideration to acquire the extra stake in the field, funded from existing cash resources.