Union Jack Oil plc, a UK-focused onshore hydrocarbon production, development and exploration company is pleased to announce that it has entered into a sale and purchase agreement with Celtique Energie Petroleum Limited whereby Union Jack and its Commercial Partner Humber Oil & Gas Limited will each make an investment to acquire a 16.25% interest in PEDL201 (“Widmerpool Gulf”) and a 12.5% interest in PEDL181 (“Humber Basin”) for a cash consideration of £7,500 each.

This is the second investment made by the Company alongside its Commercial Partner in low cost onshore oil and gas licences. Both licences have no immediate conventional or unconventional work programme commitments or planned activities.

PEDL201 is located in the Widmerpool Gulf and PEDL181 is located in the Humber Basin. The licences are contained within a wider area that, according to studies published by the British Geological Society (“BGS”) on behalf of the Oil & Gas Authority (“OGA”), are considered prospective for both oil and gas.

Internationally, horizontal drilling and specialised completion technologies in tight formations have permitted extensive unconventional developments in both oil and gas, most notably in the United States. Potential in-place volumes on the licences could represent significant economic value, even if only recovery factors at the low end of those achieved in the US can be replicated in the UK onshore.

David Bramhill, Executive Chairman of Union Jack commented:
'We are delighted to have been able to make a further investment in attractive licences in the Widmerpool Gulf and Humber Basin at nominal cost, alongside our Commercial Partner, Humber Oil & Gas.

'Union Jack will hold these licences as an investment given the Board's view that they both have significant value upside given the potential for future unconventional oil and gas exploration activities in the UK onshore.

'While further work will need to be undertaken by the onshore oil and gas industry in the UK to prove the commerciality of unconventional oil and gas projects, the transaction value ranges proposed by Edison provide an encouraging valuation indicator and supports Union Jack's confidence that the risk/reward balance of these investments is favourable to our shareholders.'

Completion of the acquisition of the licence interests is subject to OGA approval.

On completion, the interests held in PEDL201 will be: Egdon Resources U.K. 45.00% (operator); Union Jack Oil 26.25%; Humber Oil & Gas 16.25%; Terrain Energy 12.50%.

On completion, the interests held in PEDL181 will be: Europa Oil & Gas 50.00% (operator); Egdon Resources U.K. 25.00%; Union Jack Oil 12.50%; Humber Oil & Gas 12.50%.