Union Jack Oil PLC (AIM:UJO) chair David Bramhill described the West Newton, in Yorkshire, as “a highly valuable onshore project” following the publishing of a new competent persons report, authored by consultant RPS Energy.
The new assessment of the project determined ‘best case’ recoverable gas (specifically termed as ‘unrisked contingent technically recoverable sales gas’) amounting to 197.6bn cubic feet in the Kirkham Abbey formation, and, estimated that it would have an 85.5% geological chance of success.
RPS as such valued the project’s Kirkham Abbey contingent gas resource at US$396.1mln, after tax.
Whilst noting that the Kirkham Abbey is due to be tested in a planned horizontal well, slated for 2023, the company highlighted that the West Newton project also retains “substantial additional prospective resources” in the Ellerby, Spring Hill and Withernsea.
"The conclusions of the CPR signal a highly valuable onshore project with resources comparable to those usually reported from offshore developments and at a time when forward gas pricing is higher than oil,” Bramhill said in a statement.
“Such a significant domestic onshore gas resource as West Newton will be an important transition fuel in helping the UK achieve its 2050 Net Zero targets.”
He added: “Union Jack is fully funded for the drilling of the horizontal well and all testing operations where third-party technical analysis has determined that using long horizontal development wells and oil-based muds should maximise hydrocarbon productivity.
"We look forward to 2023 with a seriously high level of positive anticipation on many fronts."