Union Jack Oil PLC (AIM:UJO) celebrated hitting the US$17 million revenue milestone at the Wressle field, generated since bringing the field online in August 2021, and said it expects to be cash flow positive whilst also covering its capital spending for at least the next 12 months.
Cumulative production from Wressle reached 492,876 barrels of oil by the end of July, the company noted in a statement.
It also noted that limited amounts of water have now been observed in the well’s flow, with the water cut averaging 3.72% of total field production during July.
Union Jack highlighted that the beginning of water flow has come significantly later than originally anticipated at Wressle, which it said is further evidence that the expected recoverable volumes from the Ashover Grit will be at the higher end of the estimates (540,000 to 1.12 million barrels, according to 2016 estimates).
A new reservoir model and resource assessment is already underway.
"Water breakthrough is not uncommon in any reservoir and following the minor water cut observed, producing operations are actively being managed to effectively optimise oil production,” said executive chair David Bramhill.
"Evaluations are continuing in order to deliver a full field development plan that maximises hydrocarbon recoveries from the Ashover Grit, Wingfield Flags, Penistone Flags and other nearby prospects.
"Over the past two years, Wressle-1 production has transformed Union Jack`s financial position, allowing the company to post a maiden profit and make significant distributions to shareholders."
Bramhill added: “We continue to believe that when this important conventional onshore hydrocarbon producing asset is fully appraised and developed it will assist to fund the growth of Union Jack for many years to come."
Union Jack holds a 40% interest the Wressle field alongside partners Europa Oil & Gas and Egdon Resources which each own 30%.