David Bramhill, executive chair of Union Jack Oil PLC (AIM:UJO, OTCQB:UJOGF) discusses its US expansion with Proactive.
David Bramhill: We've been really active over the last year using our UK base at Wressle, which is providing terrific cash flow.
Assuming we get the gas export going next year, which we expect, we’ve got a strong UK asset base and we like these assets.
The fact that they're not basically allowing any more licences, in my opinion, makes it far more valuable.
That said, the diversification in the States has been a breath of fresh air.
Proactive: Take us through that diversification, particularly your Andrew's field, the 1-17 and the 2-17 wells.
David Bramhill: We’ve been selling oil for quite a while now, with sales from Andrew's 1 well over 6,500 barrels we're up to now.
The beauty of operating in Oklahoma, and most of the states in the US, is that you get things done very quickly.
Our partners are called Ridge Petroleum, and they're run by two English people who know the scene very well, along with some real experts in Oklahoma.
We drilled these two wells in three and a half months and got them into production.
And our bank account with Bank First in Oklahoma is already filling up with cash.
Plus, our mineral royalty portfolio and the three wells we've got to drill into the fourth quarter now are really good. We believe we've made a good move.
Proactive: Tell us about the potential you're seeing in the Andrews field.
David Bramhill: The potential is a bit of a mixture of different types of structures we're going for.
Andrew’s was what we call the Hunton formation, which is basically all over Oklahoma.
We've drilled two wells, the seismic works, as we mentioned, and as Mars Newman, the chair of Ridge, mentioned this morning, the seismic works.
There’s a bigger scope for the Taylor Well. I’m particularly looking forward to drilling that one. We've already ranked that well and look forward to it very soon.
The Moccasin [well] has got terrific upside as well.
There have been a lot of good discoveries going back to the 1920s.
Oklahoma is ranked number four among producing states in the US, so we're in the right place and we've got the money.
Proactive: After Taylor and Moccasin is the plan to move on to the Diana-1 well?
David Bramhill: That's correct, that's the big one. It would be nice if that one came in.
There may be disappointment because, of course, there will be. You can’t keep on making discovery after discovery unless you’ve got a magic wand. But I think the selection of wells we have in the future is absolutely brilliant.
Proactive: What is the bigger plan for the US interests?
David Bramhill: The bigger picture is to drill as many wells as we can. That's the bottom line—make a lot more money.
But even now, the income from the US is significantly catching up to our income in the UK, and our UK income is not shabby.
It’s good, but there’s been some tax increases, as you know.
The UK government raised the taxes and at the moment, we can live with it.
The worst we're going to be saying is we're going to make 62% on every barrel we make. That’s not killing us.
But if you were a bigger company and you were paying the whole 78%, I think it would be an issue.
But we are in a good frame, we're in a good position.
Proactive: David, along with your move into the US, you also started trading on the OTCQB back in April. Tell us about the reception you've had from US investors.
David Bramhill: At the moment, it's very slow. We've got a very, very good investor relations company called Harbor Access, who are very closely linked to the OTC market over here.
We've appointed a company called Sidoti Lighthouse, who are going to do some research. The first initial research is coming in September, and we look forward to that.
As it says in the RNS, we're going to appoint a broker in th fourth quarter and start accelerating our presence over there.
Proactive: And the sorts of milestones that investors should be looking out for in the months ahead?
David Bramhill: Lots of milestones. The three wells alone—one could be a company maker, and two could be very nice, thank you.