Union Jack Oil PLC's (AIM:UJO, OTCQB:UJOGF) increased drilling and development activity over the next 12 months offers investors significant potential for value creation, according to SP Angel.
The company recently agreed to acquire a 60% stake in the Sark well in Central Oklahoma, which is scheduled for drilling in the early third quarter of 2025.
The well targets recoverable resources of 1.44 million barrels in primary formations, with an additional 1.5 million barrels in secondary targets.
Estimated costs for drilling and development are around $1.1 million, with a net present value of $10.9 million based on a $65 per barrel oil price.
The chance of success stands at 65%, bolstered by a recent discovery at the nearby Moccasin well that has de-risked the play, says SP Angel.
With four consecutive discoveries in the US, Union Jack is expanding its portfolio and activity in Oklahoma, focusing on growth opportunities in a region where execution is comparatively straightforward, the broker concludes.
The shares were flat at 8.96p in early afternoon trading.