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Union Jack Oil PLC on Tuesday took confidence from an independent reserves report for its Wressle oilfield asset.
Shares in the Bath-based, UK-focused oil and gas company were 16% lower on Tuesday around midday at 42.80 pence each. The stock has risen over 30% so far in September, however.
An illustrative production scenario for the development of the Wressle field shows a ‘constrained’ plateau production rate of 800 barrels of oil per day for around five years.
‘In addition, an independent assessment of the upside potential of the producing Ashover Grit and the Santon Sands horizons was undertaken,’ Union Jack said.
An assessment of the Ashover Grit reservoir estimated a ‘potentially significantly increased’ estimate of stock tank oil initially in place of 10.1 million barrels of oil and a recoverable resource of 2.4 million barrels.
According to the report, Ashover Grit and Wingfield Flags oil reserves at the end of June stood at 1P 320,000, 2P 670,000 and 3P 1.0 million barrels of oil following past production of 203,000 barrels of oil with zero water cut.
1P, 2P and 3P refer to different estimates of the oil field's capacity with varying degrees of certainty. 1P is the most certain and 3P the least. A water cut is the ratio of water produced in a well compared to the volume of total liquids.
The Wressle oilfield, located within licences PEDL180 and PEDL182, is based in Lincolnshire and started producing oil last year.
Union Jack Executive Chair David Bramhill commented: ‘The GaffneyCline report reflects a serious technical effort over a prolonged period and its content is highly encouraging for the future of the Wressle development.’
Union Jack holds a 40% interest in the development, whilst Egdon Resources PLC and Europa Oil & Gas Holdings PLC both hold a 30% stake.
Egdon shares were down 9.2% at 7.90p each. Europa Oil was up 8.4% at 2.98p.
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