WTI (July) $76.87 -70c, Brent (July) $81.36 -54c, Diff -$4.49 +16c
USNG (June) $2.66 -18c, UKNG (June) 85.4p, TTF (June) €34.775 + €0.52

Oil price

The week has been dominated by talk about three things, the Fed and interest rate worries, unusual stock build in crude and the gossip around the Opec Ministerial Meeting next Saturday, 1st June. 

Ahead of the Memorial Day weekend in the USA gasoline stocks are quite tight but with refinery rates of 91.7% last week the oil companies are pumping plenty of gasoline into the system. 

Union Jack Oil

• I have published both the companies RNS as they do differ and it’s not for me to try and notice them!

Union Jack has published the positive conclusions of a Carbon Intensity Study on the West Newton gas development, located within PEDL 183 onshore UK in East Yorkshire. This study was undertaken on behalf of Union Jack and Reabold Resources plc, by GaffneyCline & Associates Limited, an international petroleum and energy consultancy.

Union Jack holds a 16.665% interest in PEDL 183 that includes the West Newton hydrocarbon discoveries. The Report can be found on the Company’s website, unionjackoil.com.

The GaffneyCline Report highlighted the following:

• The West Newton project has an AA rating for Carbon Intensity for its potential upstream gas and condensate production;
• Carbon Intensities at the West Newton field are significantly lower than the UK average compared to other onshore and onshore analogues;
• Based on the study, GaffneyCline estimates that West Newton could produce the equivalent of just 2.87 grams of CO2 per megajoule of energy developed (gCO2eq./MJ);
• As the development proceeds and project knowledge increases, there is potential to further improve the Carbon Intensity by further reducing fugitive flaring and venting emissions and by gas-to-grid development.

Union Jack’s focus is to minimise emissions and the carbon footprint generated by its hydrocarbon developments in the most efficient way possible, whilst continuing to contribute positively to the growing demand for energy and hydrocarbon products in the supply chain.

The demand for energy is increasing and, as the global economy recovers, hydrocarbons will continue to play an ongoing part in ensuring the energy security of the UK.  Union Jack’s development projects are located close to areas with a high demand for energy.  As a consequence, the Company believes that locally produced hydrocarbons may provide the benefit of displacing, to some extent, imported hydrocarbons.

The Carbon Intensity on the West Newton gas development project was calculated by GaffneyCline, using a tool called the Oil Production Greenhouse Gas Emissions Estimator (“OPGEE”), developed at Stanford University with support from GaffneyCline.  This tool is used, amongst other applications, by the California Air Resources Board for regulation of transport fuel related Green House Gas (“GHG”) emissions. The OPGEE tool selects parameters from a range of ‘smart’ defaults, however, these are not always optimal for specific fields.

GaffneyCline was then able to harness appropriate parameters available from their proprietary Global database of Carbon Intensity evaluations for over 9,000 gas and oil fields, categorised with metadata for analogue field identification, and a classification system for recovery mechanism.

Carbon Intensity Rating for West Newton Gas Development Concept

Source: GaffneyCline

Analysis of the results of this GaffneyCline study concludes that a West Newton gas development will have carbon intensities significantly lower than the UK average and compared to other onshore analogues. As recommended by the study, the gas and condensate development of West Newton will seek to further reduce the project’s Carbon Intensity through the utilisation of the best available techniques, including Gas-to-Grid technologies and stringent engineering specifications to minimise any venting, flaring or fugitive emissions.

David Bramhill, Executive Chairman of Union Jack commented:
“This study is an excellent overview of the green credentials for any future gas development decision at West Newton.  The AA rating achieved indicates the efforts made by the Operator, Rathlin Energy (UK) Limited, to ensure that projects under its stewardship comply with best practice.  Union Jack and Reabold support Rathlin’s strategy to negate the effects and threat of climate change.  Union Jack’s growth strategy is aligned with our Carbon Management Practice for all of our development projects in the future in order to achieve significantly lower carbon intensities than the industry average.

“The Board of Union Jack believes that in these environmentally aware times, investors will only wish to commit to investments in companies and projects that support a transition to a low-carbon economy.  As part of our ongoing strategy in respect of the environment going forward, we commit to be totally transparent in respect of our projects and on how our Carbon Management Practice is implemented.”

This study goes a great deal of the way to try and show just how attractive West Newton will be in terms of carbon intensity, indeed GaffneyCline estimates that West Newton could produce the equivalent of just 2.87 grams of CO2 per megajoule of energy developed (gCO2eq./MJ). 

Add to that the comments that note that as the development proceeds and project knowledge increases, there is potential to further improve the Carbon Intensity by further reducing fugitive flaring and venting emissions and by gas-to-grid development.

This is a development that the UK should be very proud of, as a country we are already industry leaders in low carbon intensity which makes it a no-brainer in terms of producing much needed power to the economy.

Whatever one’s view about renewables and the long term participation of fossil fuels is, this project will supply the UK with better carbon rated power than anything that can be imported for many years. As I have said before, lets hope that economics trumps ideology…

Reabold Resources

Reabold has also published the positive conclusions of a Carbon Intensity Study on the West Newton gas development, located within PEDL183 onshore UK in East Yorkshire, undertaken on behalf of Reabold and Union Jack Oil plc by GaffneyCline & Associates Limited, an international petroleum and energy consultancy. The report on the Carbon Intensity of the West Newton Field can be found at the following link: https://reabold.com/investors/reports-presentations/

Reabold holds a ca. 56% economic interest in West Newton and PEDL183 via its 16.665% licence interest in PEDL183 and a 59% shareholding in Rathlin Energy (UK) Limited (“Rathlin”), the operator of the Joint Venture, which, in turn, has a 66.67% interest in PEDL183.

The GaffneyCline study highlighted the following:

• The West Newton project has an AA rating for Carbon Intensity for its potential upstream gas and condensate production, the lowest possible carbon intensity rating category on GaffneyCline’s scale
• The West Newton field has a Carbon Intensity significantly lower than the UK average and onshore and offshore analogues. It is also significantly lower than the average imported liquified natural gas (LNG), based on the NSTA Natural Carbon Footprint Analysis published in July 2023
• Based on the study, GaffneyCline estimates that West Newton could produce the equivalent of just 2.87 grams of CO2 per megajoule of energy developed (gCO2eq./MJ)
• As the development proceeds and project knowledge increases, there is potential to improve the Carbon Intensity by further reducing fugitive, flaring and venting emissions and by gas-to-grid development, reducing on site gas and condensate processing, and using the shortest possible route to the National Grid

Carbon Intensity Rating for West Newton Gas Development Concept

Source: GaffneyCline

Reabold is focused on minimising carbon emissions and the environmental footprint of the projects it invests in, whilst continuing to develop strategic gas assets to secure domestic gas supply and energy security.

The demand for energy is increasing and the challenge to meet the world’s energy needs sustainably and efficiently requires managing and reducing harmful emissions. Hydrocarbons will continue to play an ongoing part in ensuring a secure and affordable supply of energy in the UK, while building the clean energy system of the future.

Reabold believes that domestically produced gas is significantly cleaner and supports the drive to net zero greenhouse gas emissions more than imported hydrocarbons.

Sachin Oza, Co-CEO of Reabold, commented:
“Reabold takes its commitment to responsible hydrocarbon production very seriously and we are therefore pleased to publish the excellent results of the West Newton Carbon Intensity study. The AA rating demonstrates the low carbon credentials of the West Newton project and is an example of the opportunities available in the UK to power the country through lower carbon, home grown energy, rather than relying on expensive and more carbon intensive imports.

“We believe West Newton is an important strategic asset to the UK as the country looks to secure domestic energy supply for secure and affordable energy, at a time when the country is exposed to potentially significant gas supply disruptions. The study proves that the operator, Rathlin, is a responsible hydrocarbon producer complying with best environmental practice to produce much needed UK hydrocarbons in the most efficient and environmentally friendly way possible.

“Reabold is committed to the highest standards of environmental processes and we incorporate these responsibilities into our operational decision-making and investments.”

This study goes a great deal of the way to try and show just how attractive West Newton will be in terms of carbon intensity, indeed GaffneyCline estimates that West Newton could produce the equivalent of just 2.87 grams of CO2 per megajoule of energy developed (gCO2eq./MJ). 

Add to that the comments that note that as the development proceeds and project knowledge increases, there is potential to further improve the Carbon Intensity by further reducing fugitive flaring and venting emissions and by gas-to-grid development.

This is a development that the UK should be very proud of, as a country we are already industry leaders in low carbon intensity which makes it a no-brainer in terms of producing much needed power to the economy.

Whatever one’s view about renewables and the long term participation of fossil fuels is, this project will supply the UK with better carbon rated power than anything that can be imported for many years. As I have said before, lets hope that economics trumps ideology…

The Carbon Intensity study

The Carbon Intensity study on the West Newton gas development project was calculated by GaffneyCline, using a tool called the Oil Production Greenhouse Gas Emissions Estimator (“OPGEE“), developed at Stanford University with support from GaffneyCline. This tool is used, amongst other applications, by the California Air Resources Board for regulation of transport fuel related Green House Gas (“GHG”) emissions.

The OPGEE tool selects parameters from a range of ‘smart’ defaults, however, these are not always optimal for specific fields.

GaffneyCline was then able to harness appropriate parameters available from its proprietary Global database of Carbon Intensity evaluations for over 9,000 gas and oil fields, categorised with metadata for analogue field identification, and a classification system for recovery mechanism.

Analysis of the results of this GaffneyCline study concludes that a West Newton gas development will have carbon intensities significantly lower than the UK average and compared to other onshore analogues. It is also significantly lower than the average imported LNG, based on the NSTA Natural Carbon Footprint Analysis published in July 2023. As recommended by the study, the gas and condensate development of West Newton will seek to further reduce the project’s Carbon Intensity through the utilisation of the best available techniques, including Gas-to-Grid technologies and stringent engineering specifications to minimise any venting, flaring or fugitive emissions.

West Newton Field Carbon Intensity versus All UK Fields & UK Gas and Condensate Fields (where the Base Case represents West Newton)

Source: GaffneyCline

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