Business
Strategic Expansion into the United States
Strategic Expansion into the United States.
About this update from Union Jack Oil Plc
[{"type":"text","content":"\n\n29 January 2024\nThis announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (\"MAR\"), and is Disclosed in accordance with the Company's obligations under Article 17 of MAR.\nUnion Jack Oil plc\n(\"Union Jack\" or the \"Company\")\nStrategic Expansion into the United States\nPurchase of Producing Mineral Royalties\nProposed Future USA Drilling Collaboration with Reach Oil & Gas Inc\n \nUnion Jack Oil plc, (AIM: UJO) a predominantly UK onshore focused production, development and exploration company is pleased to announce details of its initial expansion into the United States of America (\"United States\" or \"USA\"), with the purchase of three Mineral Royalty packages (\"Royalties\"), brokered by the Company's agent and adviser, Reach Oil & Gas Inc (\"Reach\").\nUnion Jack is also poised to complete Joint Venture agreements with Reach, in respect of a number of value accretive, exploration, drilling, development and potential production ventures in Oklahoma, one of the highest ranked hydrocarbon production locations in the United States.\n \nRoyalties Purchased to Date\n· Cronus Unit, containing a 25 well package in the Permian Basin, Midland County, Texas, (Effective date December 2023); the property is comprised of 9 Chevron and 16 XTO\n(a subsidiary of Exxon) operated wells \n· COG Operating LLC (a subsidiary of ConocoPhillips) operated, Powell Ranch Unit, consisting of 15 wells in the Permian Basin, Upton County, Texas (Effective date November 2023); the property is comprised of 7 horizontal and 8 vertical wells\n· Occidental operated Palm Springs Unit, containing 10 horizontal wells in the Permian Basin, Howard County, Texas (Effective date January 2024)\n· The total cash consideration for the Royalties was US$854,070 (£677,235)\n· 10% of consideration earned since December 2023\n· The Royalties are estimated to have an economic life of more than 26 years and a current Internal Rate of Return in excess of 20%\n \nThe Royalties also provide additional upside as new wells are completed and drilled on the properties at no cost to Union Jac...