Union Jack Oil PLC (LON:UJO) has agreed to buy a further 15% stake in the Biscathorpe project in the Humber basin, to increase its holding in the PEDL253 licence to 45%.
The transaction is with associate Humber Oil & Gas and the transaction sees Union Jack Oil pay £500,000 in cash, plus £500,000 of contingent consideration payable when planning permission is received for a programme that aims to establish long-term production.
"We are pleased to have taken this opportunity to increase our interest to 45% in Biscathorpe, that Union Jack's technical team believe represents a material and commercially viable hydrocarbon resource that remains un-tested,” said David Bramhill, Union Jack executive chairman in a statement.
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"The collective extensive technical information analysed over the past months, combined with APT's conclusions on the likely presence of good quality oil, have materially upgraded the resource potential and economic value of the project in our view, further supporting our opinion that PEDL253 remains one of the UK's largest onshore un-appraised conventional hydrocarbon licences," he added.
It is anticipated that a planning application will be submitted in February.
Union Jack noted that at Biscathorpe, an oil-bearing Dinantian Carbonate reservoir - of around 57 metres – has been confirmed by independent petrophysical analysis and oil samples from cuttings.
This Dinantian oil play has been estimated to have 24.3mln barrels of oil in place (mean STOIIP) and some 24.3mln barrels of oil, while the ‘upside case’ is envisaged at 36mln barrels.
Additionally, the company sees evidence for a thickened Westphalian sandstone interval for which estimates or resources (gross mean prospective resources) have been estimated at 3.95mln barrels, or 6.69 in the upside case.