Union Jack Oil’s Andrews-1-17 well at the West Bowlegs prospect in Oklahoma, is a low-risk well with an estimated 75% geological chance of success, notes house broker Shore Capital.
Andrews-1-17’s targeted objective is the Hunton Limestone, which Union Jack has reported is covered by recently acquired proprietary 3D seismic data and is one of Oklahoma’s leading producing reservoirs.
This will be Union Jack’s first well to be drilled in partnership with Reach and has the potential for rapid commercialisation and payback if the well is successful.
ShoreCap added the news underpins its 90p/share Risked NAV estimate, adding that UJO is debt-free and has a shareholder-friendly distribution policy and strong cash generation – driven by the flagship Wressle development in North Lincolnshire.
In the near term, Union Jack’s collaboration with Reach in the US is showing strong momentum and material progress towards drilling has also been reported at West Newton.