Union Jack Oil plc Proposed Farm-in for a 16.667% Interest in the Major West Newton Gas Discovery and Fundraising

David Bramhill, Executive Chairman of Union Jack, commented:

“The Proposed Farm-in to PEDL183 containing the material West Newton gas discovery represents a significant project technically and is compelling financially for Union Jack and we are grateful for the continuing support of our existing shareholders and new investors who have participated in this oversubscribed fundraising”.

“The funds raised will allow us to acquire a 16.667% interest in PEDL183 on attractive farm-in terms, and progress the drilling of the material West Newton conventional appraisal well, where success is expected to deliver a significant onshore gas development going forward and be transformational for Union Jack.”

“We look forward to working with Rathlin and Humber, drilling the West Newton conventional appraisal well to firm up the project’s significant potential and, upon a successful appraisal well, progress to a field development plan. Union Jack will book 5.3 million barrels of oil equivalent Contingent Resources to its existing reserve and resource portfolio on acquisition and once a field development plan is in place, West Newton’s Contingent Resources can be converted to Reserves.”

“Given our ongoing commitment to develop the Wressle oil discovery, and plans to commence drilling of the material Biscathorpe oil appraisal well during Q4 2018, the Proposed Farm-in and drilling of West Newton in Q1 2019 puts Union Jack in an even stronger position to deliver growth in reserves, production and asset value while adhering to our principles of strict financial and technical discipline.”

The Directors of Union Jack Oil plc (LON: UJO) today announced that the Company has agreed terms with Rathlin Energy (UK) Limited, a wholly owned subsidiary of Canadian registered Connaught Oil & Gas Ltd, on a proposed farm-in for a 16.667% licence interest in PEDL183. PEDL183 is located onshore UK in East Yorkshire and within the Western sector of the Southern Zechstein Basin and contains the significant West Newton A-1 gas discovery (Best Estimate Contingent Resource 189 Bcfe or 31.5 MMboe gross), where the drill-ready West Newton conventional appraisal well is planned to be drilled in Q1 2019.

Proposed Farm-in Highlights

· Acquiring a 16.667% interest in the large 176,000 acre PEDL183 licence containing the significant West Newton A-1 UK onshore gas discovery

· Attractive farm-in terms with no cash costs up front with all funding going towards drilling and licence costs

· Best Estimate Contingent Resources of 189 Bcf of gas equivalent or 31.5 million barrels of oil equivalent (gross) assigned to West Newton in a Competent Persons Report

· West Newton A-1 gas discovery is on-trend with the prolific offshore Hewett gas complex

· Proximity to existing gas pipelines and infrastructure

· Drill-ready conventional appraisal well planned to be drilled in Q1 2019 to appraise the gas discovery

· Compelling immediate and future economic value from a development of the gas discovery alone

· Operator’s NPV10% of US$247 million and 52.5% ROR for the gas discovery alone

· Attractive acquisition metrics of less than US$0.30 per barrel of oil equivalent for the gas discovery alone

· Considerable upside potential from the lower Cadeby Reef oil exploration target underlying the gas reservoir that will also be drilled with Best Estimate Prospective Resources of 79.1 million boe (gross)

· Further significant upside potential from other numerous prospects and leads

· A successful appraisal well in Q1 2019 is expected to deliver a major onshore gas development

Fundraising and Commercial Partner Highlights

· £2.25 million raised before expenses in an oversubscribed Fundraising to fund the Proposed Farm-in and associated well costs

· Union Jack’s Commercial Partner, Humber Oil & Gas Limited (“Humber”), has participated on identical terms in the Proposed Farm-in and will result in it also acquiring a 16.667% interest

· Humber director has a beneficial interest in 13% of the pre-placing issued share capital of Union Jack held by G.P. (Jersey) Limited which has increased its shareholding to 15% of the Company’s share capital as enlarged by the Fundraising

Frazer Lang, Director of Humber and Union Jack’s Commercial Partner, commented:

“PEDL183 is one of the largest onshore licences within the UK and we are delighted to be investing in parallel in this project alongside our Commercial Partner, Union Jack.

“The conventional West Newton appraisal well is planned to be drilled in Q1 2019 and, if successful, the effect will be transformational for both Union Jack and Humber.

“As Union Jack’s Commercial Partner, I feel extremely positive about its future and I am also delighted to be beneficially interested in an increased 15% strategic equity investment in the enlarged issued share capital of Union Jack.”

The Placing and Subscription

The Company has raised £2.25 million before expenses by way of a placing and subscription of 2,647,058,823 new ordinary shares of 0.025p each (“New Ordinary Shares”) at a price of 0.085p per New Ordinary Share (the “Fundraising”). The placing comprises 2,474,117,652 New Ordinary Shares (“Placing”) and the subscription of 172,941,171 New Ordinary Shares (“Subscription”). SP Angel Corporate Finance LLP acted as sole broker on the Placing.

Further information on PEDL183 and the Proposed Farm-in

Pursuant to the Proposed Farm-in, UJO has entered into a Heads of Agreement (“HOA”) with Connaught, a private company incorporated in Canada and its wholly-owned subsidiary Rathlin, a private company incorporated in England and Wales whom are the Operator of PEDL183 (“Operator”).

Union Jack will acquire a 16.667% interest in PEDL183 by paying 25% of the West Newton appraisal well cost, expected to be circa £4.6 million gross.

The transaction is subject to contract and regulatory approvals. The Company is not required to make any immediate up-front cash payment.

PEDL183 is located onshore UK in East Yorkshire and within the Western sector of the Southern Zechstein Basin and contains the major West Newton gas discovery and numerous other prospects and leads.

The West Newton gas discovery is on-trend with the prolific Hewett gasfield complex which had Original Gas in Place of 419 Bcf. Regionally, West Newton and Hewett are located in the Southern Permian Basin which contains approximately 24 Tcf of gas and 250 MMbbls of oil combined in production areas in Poland, Germany and the Netherlands.

The West Newton conventional appraisal well is defined from 3 Component 3D seismic. The West Newton conventional appraisal well is planned to be drilled in Q1 2019.

The West Newton A-1 gas discovery well was drilled and logged in 2014. Best Estimate Contingent resources are 189 Bcf of gas equivalent (“Bcfe”) or 31.5 million barrels of oil equivalent (“boe”) (gross). Reflecting its status as an existing gas discovery, the West Newton conventional appraisal well has a combined geological and commercial Probability of Success of 60%.

The Operator’s estimated unrisked project economic evaluation indicates NPV10% before tax of US$247 million or $7.84 per boe and yields a 52.5% rate of return. Based on Union Jack’s share of the drilling cost and the Operator’s NPV10%, Union Jack is acquiring an interest in a gas discovery with Contingent Resources for less than $0.30 per boe.

Cadeby Reef Oil and Other Prospects

The Operator has identified a significant oil exploration target in the Cadeby Reef formation located below the existing discovered gas Contingent Resources. As part of the proposed West Newton appraisal well, the Cadeby Reef oil exploration target will also be drilled as a secondary target. The Cadeby Reef has Best Estimate Prospective Resources of 79.1 million boe (gross). The Cadeby Reef oil prospect has an estimated geological Chance of Success of 26%.

The Operator’s estimated unrisked project economic evaluation indicates NPV10% before tax of US$850 million or US$10.75 per boe and yields a 104.8% rate of return. Based on Union Jack’s share of the drilling cost and the Operator’s estimated NPV10%, Union Jack is acquiring an interest in both a material gas discovery with Contingent Resources and an attractive oil target with Prospective Resources for a combined $0.08 per boe.

In addition, the Operator has also mapped a number of additional attractive prospects and leads on the licence that would add to the significant Prospective Resources mentioned previously.

Deloitte CPR

A Competent Person’s Report dated 25 July 2017 was prepared for Connaught by Deloitte LLP, an independent petroleum engineering firm, that conforms to SPE-PRMS guidelines (“Deloitte CPR”). The Deloitte CPR incorporates data from a proprietary three component 3D seismic survey, acquired in 2014 following the drilling of the West Newton discovery well, and Deloitte has assigned Contingent Resources to the West Newton discovery.

In this announcement, all volumetric data disclosed under the Contingent Resource and Prospective Resource categories in relation to the West Newton gas discovery and PEDL183 have all been sourced from the Deloitte CPR.

The Executive Summary extracted from the Deloitte CPR will be available on the Union Jack website at www.unionjackoil.com

A glossary of technical terms is attached to this announcement.

Proposed West Newton Appraisal Well

The proposed West Newton appraisal well will involve conventional drilling to appraise the West Newton A-1 gas discovery within a Permian age Carbonate reservoir and a deeper secondary oil target and, for clarity, the operations at the site will not either now or in the future involve the process of hydraulic “fracking” for shale gas or shale-oil.

Commercial Partner Participation

Union Jack has an established relationship with Humber which forms the basis of an ongoing Commercial Partnership whereby both parties seek to co-invest in UK onshore hydrocarbon opportunities. The first such commercial collaboration was the acquisition of a combined 20% economic interest in PEDL253 containing the Biscathorpe-1 oil discovery where a conventional appraisal well Biscathorpe-2 is planned to be drilled Q4 2018. Humber’s sole director, Frazer Lang, is also beneficially interested in 754,482,736 Ordinary Shares of the Company held by G.P. (Jersey) Limited representing 13% of the issued ordinary shares prior to the Fundraising.

The second such significant commercial collaboration between Union Jack and Humber is the Proposed Farm-in for a combined 33.3% economic interest in PEDL183, where Humber has also entered into a HOA on identical terms to that of Union Jack that will result in each of Union Jack and Humber acquiring a 16.667% interest.

In addition to the commercial collaboration between Humber and Union Jack, G.P. (Jersey) Limited has also acquired a further 513,123,802 New Ordinary Shares in the Fundraising and will hold in aggregate 1,267,606,538 Ordinary Shares representing a 15% interest in the Company’s share capital as enlarged by the Fundraising.

Details of the Director Subscriptions

Joseph O’Farrell and Raymond Godson intend, following this announcement, to subscribe for a total of 47,058,822 New Ordinary Shares at a price of 0.085p per share (“Director Subscriptions”).

Of this, Joseph O’Farrell, Executive Director of Union Jack, intends to subscribe £30,000 for 35,294,117 New Ordinary Shares, following which he will have a beneficial interest in 212,987,709 Ordinary Shares, representing approximately 2.52% in the Company’s share capital as enlarged by the Fundraising.

Raymond Godson, Non-Executive Director of Union Jack, intends to subscribe £10,000 for 11,764,705 New Ordinary Shares, following which he will have a beneficial interest in 42,529,411 Ordinary Shares, representing approximately 0.05% in the Company’s share capital as enlarged by the Fundraising.

Use of Proceeds

The net proceeds from the Fundraising will be used to fund the Company’s drilling obligation on the West Newton conventional appraisal well in Q1 2019.

Fundraising and Admission

Completion of the Fundraising is conditional, inter alia, upon admission of the New Ordinary Shares to trading on AIM.

The New Ordinary Shares will rank pari passu in all respects with the existing ordinary shares. Application has been made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM and admission is expected to take place on or around 8 October 2018.

Total Voting Rights

Following admission, the Company’s share capital and total voting rights will comprise 8,450,710,254 Ordinary Shares. The Company does not hold any shares in treasury. Consequently, 8,450,710,254 is the figure which may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA’s Disclosure and Transparency Rules.

Related Party Transactions

Humber is a substantial shareholder of the Company, and Joseph O’Farrell and Raymond Godson are directors of the Company. Therefore Humber, Joseph O’Farrell and Raymond Godson are related parties to Union Jack as defined in the AIM Rules for Companies. Humber’s participation in the Fundraising, and the Director Subscriptions, are related party transactions for the purposes of Rule 13 the AIM Rules (“Related Party Transactions”).

David Bramhill and Graham Bull, being the independent Directors for the purposes of the Related Party Transactions consider, having consulted with the Company’s nominated adviser, SP Angel Corporate Finance LLP, that the terms and conditions of Humber’s participation in the Placing and the Director Subscriptions are fair and reasonable insofar as the shareholders of the Company are concerned.

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