New ‘late stage’ acquisition opportunities continue to be considered, but, the upcoming start-up of the Wressle field, in in the East Midlands, is set to be the real highlight for UK onshore oil investor Union Jack Oil PLC (LON:UJO).
Wressle is expected to start production at rates of around 500 barrels of oil per day.
Union Jack has 8.3% stake in Wressle, which has become something of a cornerstone in the portfolio.
It also has interests in other onshore UK ventures, has an arrangement in place with Egdon and continuously looks to participate in new projects as they approach drilling.
At end April, Union Jack reported a cash balance in excess of £2.6mln with no debt.
Wressle is “marvellous” for Union Jack
Wressle moving to production is marvellous for Union Jack Oil, chairman David Bramhill highlighted in an interview.
“It means cashflow, and for an exploration company that doesn’t happen very often.
“So, we’re really, really pleased that it is moving forward nicely. The operator is fast forwarding production, so hopefully in the second half of the year we can call ourselves a genuine producer with good cashflow.”
As well as Wressle, Union Jack has a 10% stake in the licence that includes the Keddington Oilfield and stakes in other fields including Burton on the Wolds, Laughton, Biscathorpe and North Kelsey – all onshore UK prospects.
New acquisitions are being targeted
Union Jack has a fairly defined acquisition strategy: “We try to save time by latching on to [exploration] projects that are at a late stage, where they are almost drill ready,” Bramhill adds.
“Instead of getting the project from scratch, working it up into a prospect and getting it drill ready plus planning permission - we pay our promote and we invest in the drilling. Sometimes it works, sometimes it doesn’t.
“There are some very, very nice wells going to be drilled in the future and we’ll be looking to get involved in that, particularly in southern England.”