Union Jack Oil soars as project estimates confirm "significant" potential

2nd Jun 2014 08:03

Shares in UK hydrocarbon group Union Jack Oil soared on Monday morning after the company said estimates at its part-owned PEDL201 licence have confirmed "significant shale oil and gas potential".The technical review, undertaken by Molten Limited, showed that so-called "mean gross un-risked deterministic in place volumetric estimates" at PEDL201 are 5.4bn barrels of oil and over 2.7trn standard cubic feet (scf) of gas.PEDL201, in which Union Jack Oil has a 10% interest, is thought to contain large thicknesses of Upper and Lower Bowland shale, which Molten believes are likely to be primarily oil-bearing."No shale oil or gas production has yet occurred in the UK, therefore Molten has not attempted to risk the in place volumes nor attempted a valuation of the shale prospect," the statement said.Nevertheless, Union Jack's share of the un-risked volumes would amount to around 540m stock tank barrels of oil and around 270bn scf initially in place.The company, however, cautioned that exploration risk "may be considerable" and that the resource may not be commercially producible.The stock was 40% higher at 0.433p by 08:12.BC