The £25,000 deal with Nautical, a subsidiary of Cairn Energy, will double Union Jack’s turnover in PEDl005 prospect, which contains the Keddington oilfield.

Turnover for the play was £22,119 last year, generating a gross loss of £577.

Union Jack chairman David Bramhill said: “The opportunity for Union Jack to acquire Cairn Energy`s UK onshore hydrocarbon portfolio which comprise assets we hold in high regard, at nominal cost is an excellent result.

“The assets acquired are all located in Union Jack`s core area of interest in the East Midlands which include additional interests in the producing Keddington oilfield and the drill-ready prospects, subject to planning, at Louth and North Somercotes.

“This acquisition is a perfect fit to the company`s existing portfolio at minimum cost while allowing Union Jack to focus on growing its production and exploration business.”