Union Jack Oil plc partners with Reach Oil & Gas for Oklahoma drilling venture

Union Jack Oil plc (AIM: UJO), a UK-based onshore hydrocarbon production, development, and exploration company, has announced a strategic farm-in agreement with Reach Oil & Gas Company Inc (“Reach”) to acquire a 45% working interest in the upcoming drilling of the Andrews-1 well. This venture, aimed to test the West Bowlegs Prospect located in Seminole County, Oklahoma, USA, signifies Union Jack Oil’s expansion into the US hydrocarbon sector, aligning with its growth strategy and exploration efforts.

Scheduled for early Q2 2024, the Andrews-1 well boasts a 75% geological chance of success, as estimated by Reach, the operator. The drilling period is expected to span approximately ten days, reaching a depth of 5,200 feet, with a swift completion time of about eight days, including perforating and flow-back processes if successful. This venture is backed by recently acquired proprietary 3D seismic data covering the proven producing Hunton Limestone, a key hydrocarbon reservoir in Oklahoma, indicating strong potential for success.

Union Jack Oil’s commitment to the project involves covering 60% of the costs for the Andrews-1 well to earn a 45% economic interest, with future wells’ expenses aligned with this economic interest share. The company has identified additional drill-ready prospects within the earned interest area, supported by 3D seismic data, underscoring the strategic value of this partnership with Reach.

The total investment for seismic acquisition, planning, drilling, and completion of the Andrews-1 well is estimated to be significant, with Union Jack Oil funding these expenses from its existing cash resources. The target reservoir, Hunton Limestone, is known for its oil-filled porosity and is expected to be at original pressure, promising primary oil recovery through solution gas drive, with any recovered gas sold into the local network.

Reach, an accredited operator in the USA, boasts a portfolio of oil and gas production facilities in Seminole and Pottawatomie Counties, Oklahoma. The company’s expertise in generating drilling opportunities and its modern seismic equipment, supplied by UK-based Stryde Limited, are pivotal to the exploration efforts.

David Bramhill, Executive Chairman of Union Jack Oil, expressed optimism about the venture’s potential to add significant cash flow and complement the company’s existing production interests in the UK. The strategic partnership with Reach is poised to broaden Union Jack Oil’s access to a wider portfolio of prospects and drill-ready targets, marking a new growth phase for the company.

Miles Newman, Chairman of Reach, highlighted the acquisition of the West Bowlegs 3D seismic survey and the potential drilling opportunities it unveils, emphasizing the collaboration’s expansion of onshore US activities.

This partnership between Union Jack Oil and Reach Oil & Gas represents a significant step forward in exploring and developing hydrocarbon resources in Oklahoma, promising substantial returns and strengthening the companies’ positions in the energy sector.