Union Jack Oil plc announced that drilling operations have commenced in respect of the Keddington-5 conventional sidetrack development well. The well is located in PEDL005(R) incorporating the producing Keddington oilfield, the Louth prospect and the North Somercotes prospect. Union Jack acquired a 10% economic interest in PEDL005(R) from Egdon Resources UK Limited in September 2015.

The holders in the Licence are the operator, Egdon (45%), Terrain Energy Limited (35%), Nautical Petroleum Limited (10%) and Union Jack Oil plc (10%). Under the terms of the acquisition agreement with Egdon, Union Jack will pay 20% of the costs of the Keddington-5 sidetrack well and 20% of the costs of the Louth exploration well, currently planned for 2016/2017. Union Jack's contribution towards the costs of the Keddington-5 sidetrack well will be financed from existing cash resources.

Based upon an integrated geological and geophysical evaluation Stock Tank Oil Initially in Place estimates indicate that below the previously drilled Keddington-4 well, there remains an undrained volume that ranges between 309,000 and 566,000 barrels of oil. The objective of the Keddington-5 well is to access the undrained STOIIP through the drilling of the Keddington-5 sidetrack from the existing Keddington-4 well which was also a sidetrack of the original Keddington-1Z well bore.