Union Jack Oil PLC (AIM:UJO, OTCQB:UJOGF)’s successful drilling of the Andrews 1-17 well in Oklahoma adds another feather to the AIM-listed group’s cap, reckon Shore Capital Markets analysts.
“Whilst we will obviously look forward to a further update once testing has concluded and well deliverability has been assessed, we agree that this is a strong update from Union Jack today, confirming a very encouraging start to the company’s US drilling campaign in partnership with operator Reach Oil & Gas,” they said.
The well exhibited high porosity and elevated gas readings, with the wireline logs indicating good reservoir quality, the company told investors.
Shore Cap said of the news: “Comparable development wells nearby are reported to have typical initial production rates of circa 180 (barrels of oil equivalent per day) and we therefore continue to believe that Andrews-1 provides a potential source of material production and cash flow growth for Union Jack going forward.
The broker “confidently” retained its 90p per share price on Union Jack stock, highlighting Union Jack’s “debt-free balance sheet, shareholder-friendly distribution policy and strong cash generation”.
Shares are currently swapping for 20.5p.