Equities analysts at Shore Capital Markets are “very encouraged” after onshore UK-focused Union Jack Oil PLC (AIM:UJO) released an update on its West Newton project, in which it holds a 16.7% interest.
Union Jack confirmed on Tuesday that a variation of the permit for the West Newton B wellsite (allowing for the use of oil-based fluids during drilling and testing) was issued by the Environment Agency.
“The company confirms that the commencement of operations at West Newton is targeted for the first half of next year, and we are very encouraged to see this expected timescale confirmed,” said analysts.
Shore Cap commented: “As previously announced, a 1,500m horizontal well is planned at West Newton and we continue to believe that this gas appraisal well offers scope to unlock considerable value (given the independently assessed volumetric potential and relatively high chance of success).
“We continue to see this as a very important drilling catalyst for investors to look forward to in the coming months, and will of course look forward to further updates in due course.”
Shore Cap highlights Union Jack’s debt-free balance sheet, shareholder-friendly distribution policy and strong cash generation.
Ahead of forthcoming news of flow rates from Wressle and the publication of a new competent person’s report, Shore Cap maintained its 90p per share risked net asset value estimate.