Union Jack Oil reported Monday that it plans to fund two onshore UK wells with the proceeds of funds raised on its flotation on London's Alternative Investment Market next week.
Union Jack expects to raise $1.2 million (GBP 800,000) via an equity placing on its admission to AIM on July 30. It will then use $510,000 (GBP 333,000) of these funds on drilling the Wressle-1 exploration well on the PEDL180 license in Yorkshire and $306,000 (GBP 200,000) to fund the Burton on the Wolds-1 exploration well (PEDL201) in Leicestershire. Both wells are to be drilled in partnership with Egdon Resources, and are planned for the third quarter of 2013.
A previous announcement from Union Jack revealed that Wressle-1 is estimated to contain gross most-likely prospective resources of 2.1 million barrels of oil.
Union Jack also plans to drill two more wells at Biscathorpe and North Kelsey in Lincolnshire.
Union Jack Executive Chairman David Bramhill commented in a company statement:
"Union Jack is a new entrant to the UK hydrocarbon exploration sector and is concentrating on mature exploration projects, both onshore and offshore UK. Admission, coupled with the funding secured in connection with admission, will provide a platform for us to develop into an established UK onshore company. In due course we aim to add appropriate offshore projects in the North Sea and Ireland."
In a separate statement, Egdon Resources noted that Union Jack does not intend to exercise its option to acquire an interest in Wessex Basin licenses PL090 and PEDL237.
"It is obviously disappointing to Egdon that Union Jack is not in a position at this time to exercise the options with respect to either the purchase of interests in the Wessex Basin or certain farm-outs in the East Midlands," said Edgon Managing Director Mark Abbott.
"However, Egdon will now retain a 55-percent interest in the Waddock Cross oil field where planning consent has recently been received and we look forward to updating shareholders of commencement of production and revenues from the field in the next few months."
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