Union Jack Oil building cashflow in the UK

Union Jack Oil PLC is an oil and gas company with a focus on onshore production, development, exploration and investment opportunities within the United Kingdom hydrocarbon sector.

How it is doing

Union Jack Oil PLC said it expects the Wressle field to further increase production, potentially up to 1,500 barrels of oil per day (bopd), later this year as the field begins to deliver additional domestic UK gas supplies.

The oil field in Lincolnshire is presently constrained by gas flaring regulations – it is allowed to incinerate 10 tonnes of gas per day – but, a new development plan has been submitted to the UK authorities so that gas can be sold instead of burned and oil can flow unrestrained.

At 760 to 800 bopd, Wressle is already outperforming the original production expectations of 304 to 320 bopd net to Union Jack. And a total of 150,000 barrels of crude have been produced since the field restarted in August.

It is planned that Wressle’s gas can be monetised via a short 600 metre pipeline into the local gas distribution network, albeit this will require both planning permission and environmental agency approvals.

Union Jack Oil PLC says it is on a material growth trajectory as it highlights a new landmark, as its 40% owned Wressle field has now delivered US$5mln of net revenues to the company.

The revenue has been generated since the restart of Wressle in August 2021.

Union Jack Oil and partner Egdon Resources have appealed the rejection of their planning application for a sidetrack well at the Biscathorpe site in Lincolnshire.

The junior had flagged an appeal would be made when the original application was rejected in February.

What the brokers say

Union Jack Oil PLC will have another bite at a vast cherry, so says stockbroker SP Angel, which has repeated a ‘strong buy’ recommendation following an update from the West Newton project.

Testing operations are advancing at the West Newton B site where the British oil firm today said that a column of some 118 metres was demonstrated on completion of drilling.

A 44-metre section of the Kirkham Abbey formation was perforated in the West Newton B-1z well and hydrocarbons were produced to surface – as described by the company, good quality gas was recovered along with liquid hydrocarbons.

What management says

Union Jack Oil's David Bramhill talks Proactive through its 2021 results. He says UJO's advanced a number of its key projects, especially Wressle, which have been transformational to the company financially. He says the Wressle journey has only just begun. Bramhill adds that the company continues to be debt free with significant cash reserves and substantial future revenues expected. He also discusses the potential for a share buy-back or dividend as well attracting the attention of institutions.

Read the latest issue of the OGV Energy magazine HERE