The West Newton onshore gas project could be financed by installing gas-powered generators and cryptocurrency mining equipment, funded by natural gas produced at the East Yorkshire site.
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The project estimate is gross recoverable 2C gas resources of almost 200 billion cubic feet, based on RPS’ independent assessment in 2022.
Operator Rathlin Energy (UK) Ltd’s feasibility study focuses the money-generating scheme on the West Newton A and B sites within PEDL183 licence.
Gas from the existing wells of West Newton A-2, West Newton A-1 and West Newton B-1z would generate on-site electricity to power cryptocurrency mining.
Production from WNA-2 would be first converted into bitcoin, followed by WNA-1 and WNB-1z.
Proceeds will also provide early production and cash flow ahead of planned full field gas development.
The joint venture partners have also signed a non-binding letter of intent with Texas-based 360 Energy for potential bitcoin mining, subject to approvals, with a view to entering a binding definitive agreement.
The JV includes Rathlin with a 66.7% interest, Reabold Resources plc holds a 69.9% economic interest through its 79.8% shareholding in Rathlin and a 16.665% direct licence interest.
Union Jack Oil plc owns a 16.665% working interest.
Executive chairman David Bramhill of Union Jack said that onshore developers had been forced to think “outside the box” to progress their projects.
“Regulatory uncertainty has unduly hampered progress and planning challenges have tarnished somewhat the perception of a number of commercially attractive onshore projects, such as West Newton, however, we are seeing some ‘green shoots’ appearing on the horizon in this respect.”
Mr Bramhill added that if the scheme is successful, Union Jack could have its own bitcoin treasury.
Reabold co-chief executive officer Sachin Oza said that creating and accumulating Bitcoin offered a “significantly enhanced, sustainable return superior to simple cash purchases”.
“The accumulation of mined Bitcoin, taking advantage of Rathlin’s access to extremely low cost energy, is both a precursor and supplement to the unlocking of the substantial low-cost natural gas at West Newton, which we believe will play an invaluable role in UK energy security in the years ahead.
“In addition, the UK Government’s AI Opportunities Action Plan, announced in January this year, set out new measures that will create dedicated AI Growth Zones.
“We believe that AI/data centres will be a key growth area of the UK economy in the coming years, and that West Newton’s onshore setting and low operating costs also render it ideal for powering co-located data centres at the existing well sites from domestically produced gas.”