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Executive chairman David Bramhill says Union Jack Oil (LON:UJO) is well placed to take advantage of a “dislocation” within the oil and gas market.
Bramhill, in UJO’s interim results statement, highlighted that the company has achieved a number of important milestones – despite weakness in the sector and low oil prices – and has at the same time retained a strong balance sheet.
During the six months, to June 30, the company continued to expand its portfolio of onshore UK assets and saw progress to ongoing projects such as Wressle (where flow testing has been carried out) and Biscathorpe (which secured planning permission for a 2016 well).
UJO highlighted that the planning and permitting work has now begun for the development of the Wressle discovery, where there’s the possibility of ‘early oil production’.
In the current six month period, meanwhile, UJO has agreed to acquire 10% of the Keddington oil field and, significantly, this will give the company production and transform it from a “pure play explorer”.
In terms of financials the company, which is yet to generate revenue, reported a loss of £256,038 for the six months. Net assets, meanwhile, increased to £3.8mln from £2.4mln and the company ended the period with £2.5mln of cash and it was debt free.
UJO said it was fully funded for the current planned drill programme.
Bramhill, in the statement, said: “The company's strategy is to continue focusing on its low-cost UK onshore portfolio and similar opportunities, with a view to generating additional value for its shareholders.
“To that end the company has already utilised its robust balance sheet position to increase its interests in drill-ready projects at Biscathorpe and North Kelsey and to acquire an interest in the producing Keddington oilfield at an attractive entry point post period end."
House broker Shore Capital, in a note, said: “We continue to believe that Union Jack is extremely well positioned to take advantage of its healthy balance sheet and pursue advanced opportunities in the current oil price environment.”
On AIM, UJO shares gained more than 9% to trade at 0.18p each.