Union Jack Oil adds second well to Oklahoma portfolio
() , a UK-focused onshore hydrocarbon explorer, announced two more farm-in agreements with Reach Oil & Gas for projects in Oklahoma, adding to the previously announced farm-in to acquire a 45% working interest in a new well to test the West Bowlegs Prospect in Seminole county.
The first of the two new agreements is for a 75% working interest in a well to be drilled in Q3 2024, to test the Footwall Fold Prospect in the Wilzetta Fault play. The second is for a 37.5% working interest in a 2D and 3D seismic acquisition programme to identify additional drillable prospects along the Wilzetta Fault, located in Pottawatomie and Lincoln counties, Oklahoma.
The 75% farm-in is for a well in the Footwall Fold Prospect that will test a target in the Wilzetta Fault zone and its deeper underlying structure, with estimated recoverable oil in excess of 200,000 barrels. The well is planned to be drilled in Q3 2024 to a depth of 6,000 feet, with a geological chance of success estimated by the Reach at 35%. Prospect mapping is supported by recently reprocessed 3D seismic data.
Planning and back cost for the well payable by are US$277k, and the cost of drilling and completing the well is estimated at US$1m. Going forward, costs of further wells will be based on 's 75% working interest.
The 37.5% farm-in to acquire 2D and 3D seismic in Wilzetta Fault Play aims to confirm additional sites already identified for structures along the fault. Initially, a 2D seismic will be acquired to confirm the sites, and later a 3D programme will be carried out at the most promising sites to firm up additional drilling locations. will pay 50% of the programme cost at US$280k net to to earn a 37.5% interest in any prospects generated.
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Union Jack continues to advance its newly established relationship with Reach Oil & Gas as it acquires its first US assets. To recap, on January 29 a farm-in was announced for a 45% working interest in a new Andrews-1 well to be drilled in Q2 2024, to test the West Bowlegs Prospect in Seminole county, Oklahoma. This agreement was finalised on February 6. One week later, is announcing two more highly prospective farm-ins, one for a new well to be drilled in Q3 on the Wilzetta Fault, and one for 2D and 3D seismic to help identify further targets.
The previously announced Andrews-1 is to be drilled early in Q2, with a geological chance of success estimated by Reach at 75%. Drilling is expected to take approx. 10 days to a depth of 5,200 ft. If successful, completion time is expected to be short at approx. 8 days, including perforating and flow-back. If proven successful, the well could be in production within 1 month from spudding.
The high chance of success for Andrews-1 comes from similar low-cost wells in the area that produce within the range of 150 boe and 200,000 cubic feet of gas per day, with a quick ROI of 6 months. The target for the well is the Hunton Limestone, one of the main hydrocarbon reservoirs in Oklahoma.
Similarly, for the well to be drilled on the Wilzetta Fault, there are numerous existing oilfields in the prolific area of central Oklahoma, such as the North-East Shawnee field, 3 miles south, which has produced 5.8 million barrels of oil; the adjacent West Bellmont field, which has produced 580k barrels; and Arlington Field, 10 miles to the northeast, which has produced 1.8m barrels. Wells drilled on the Wilzetta Fault typically produce c. 250 barrels of oil a day, providing pay-back within 3 months.
Union Jack's decision to diversify its UK portfolio with US assets is in line with its strategy of acquiring significant interest in projects with quick expected development times, capable of adding significant cashflow. The partnership with Reach will open up further opportunities to access more similar prospects and drill-ready targets in Oklahoma.
The cost of both wells and 2D/3D seismic net to Union Jack will be paid from existing cash reserves.
shares rose 2.9% on today's announcement.
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