Union Jack Oil PLC (AIM:UJO)’s Monday trading update is “very encouraging” and “in line with our existing understanding and expectations”, said equities researchers at house broker Shore Capital Markets.
The group’s Wressle field continues to exceed expectations and is now the second most productive onshore oilfield in the UK following a substantial increase in production, noted analysts.
Plans to eliminate flaring from Wressle, and the partners’ financial contribution to local charities and community groups via the Wressle Community Fund, were also highlighted by Shore Cap.
“Overall we are very pleased to see today’s update confirming a continued impressive production performance and growth potential from the flagship Wressle asset,” said the broker.
Union Jack has also revealed significant additional resource potential in the Ashover Grit ahead of pending drilling.
Union Jack’s share price “continues to trade at levels far beneath prior highs, although we remain very confident in the investment case, which is reinforced by yet another good update today,” said analysts.
Shore Cap pointed to robust financial performance, debt-free balance sheet, shareholder-friendly distribution policy, strong cash generation and undemanding rating on standard trading multiples, justifying a buy rating with 90p share price against a publication price of 24p.