leadf
logo-loader
viewUnion Jack Oil PLC

Union Jack Oil delighted with West Newton result

Snapshot

  • Built a portfolio of minority stakes in UK projects
  • Wressle start-up a key catalyst
  • Enjoying success at West Newton project
oil rig

Quick facts: Union Jack Oil PLC

Price: 0.185 GBX

AIM:UJO
Market: AIM
Market Cap: £36.66 m
Follow

What it does

David Bramhill, chief executive, explains that Union Jack Oil PLC (LON:UJO) has a very simple business model.

“We cherry-pick what we think are the nicest deals around and take an interest.

“We like minority stakes, so if something goes wrong, you haven’t killed the company.”

He reckons with onshore UK there is a 40% - 50% and sometimes even a 60% chance of success unlike offshore, where often he says it is an 8:1 bet.

“And we don’t do 8:1 shots,” he adds.

Union Jack Oil's key assets

• PEDL 183 West Newton 16.67% ( Operator Raithlin ) 

• PEDL180 Development Wressle: 27.5% Awaiting development approval (operator Egdon)

• PEDL182 Exploration Broughton North: 27.5% Wressle (Egdon)

• PEDL253 Exploration Biscathorpe: 22% (Egdon)

• PEDL005(R) Production Keddington: 20.0% Existing production (Egdon)

What the boss says: David Bramhill

In September, UJO raised £7mln through oversubscribed funding round at 0.16p per share.

David Bramhill, Union Jack’s executive chairman, said he was delighted with the outcome, which he said laid a platform for further development of the AIM-listed group.

In December, UJO reported that the West Newton B1Z appraisal well hit a hydrocarbon column spanning 62 metres gross albeit pending confirmation of data.

The company also highlighted scope for the overall hydrocarbon column to considerably exceed the currently identified interval.

"The preliminary results from this well vindicate Union Jack`s faith and financial commitment over the past two years to what Union Jack`s management has always believed to be an exceptional UK onshore hydrocarbon enterprise."

Video

What the broker says: SP Angel

Results at B1Z were much better than the forecasts beforehand said the broker, with at least 63m of saturated net pay though operator Reabold estimated it as high as 118m.

The well is also some just 2.5km away from the previously drilled WNA-1 and WNA-2 discoveries, SP Angel noted, suggesting that the prolific Kirkham Abbey reservoir extends across the project area.

More immediately also will be the Wressle field, which is expected to come on stream at a rate of 500 barrels per day (200net) in the first quarter of 2021.

Modelling has inferred a breakeven price of US$17.62/bbl, highlighting the compelling project economics on offer at the project in the current oil price environment said SP Angel.

Based on the West Newton outcome, the broker raised its price target to 0.88p from 0.82p and retains a strong buy rating.

Inflexion points

  • Wressle can come on stream at 500 barrels per day
  • West Newton has potential to much larger than originally thought
  • Flow test at West Newton confirms potential

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Union Jack Oil PLC named herein, including the promotion by the Company of Union Jack Oil PLC in any Content on the Site, the Company receives...

FOR OUR FULL DISCLAIMER CLICK HERE

Union Jack Oil: Proactive extended interview with chairman David Bramhill

Union Jack Oil PLC's (LON:UJO) David Bramhill sits down for an extended video chat with Proactive's Andrew Scott. It comes soon after updating on the ongoing drilling operation at the West Newton B-1 appraisal well project in East Yorkshire. The well, tagged WNB-1, has so far been drilled down...

on 30/11/20

3 min read