Headlines
• Union Jack Oil* (LON:UJO) – BUY (0.68p) – EWT to Elucidate Commerciality: Today's news marks the start of what we believe will be an active period for the Company, with multiple opportunities for revaluation. We are reiterating our 0.68p Target Price and BUY Recommendation.
• Urals Energy (LON:UEN) – Solid Progress, but Still a Distance to Travel: While the efforts that have been evidenced in the 2014 results today are a positive for the Company, a similar approach will be required in 2015 and 2016 to put it on a more secure footing from which to grow in the future.
News Items
Union Jack Oil* (LON:UJO) – BUY (0.68p) – EWT to Elucidate Commerciality
Yesterday's release, disclosing the imminent commencement of the extended well test (“EWT”) on Wressle is an exciting phase for the Company in that if successful, it is the prelude to commerciality. The last time we wrote on the Company we said that:
With further news on the commerciality of Wressle expected in the next few months following assessment, and the timing of the appraisal drilling of Biscathorpe expected in confirmed within the next 6 months, the Company continues to have significant news flow ahead.
Today's news marks the start of what we believe will be an active period for the Company, with multiple opportunities for revaluation. We are reiterating our 0.68p Target Price and BUY Recommendation.
Urals Energy (LON:UEN) – Solid Progress, but Still a Distance to Travel
Today's results have underlined that 2014 was a transformation year for the Company in that the balance sheet has been repaired and operational cash flow has been stabilised and is supporting the business. While a recovery in oil price will be required to maintain the growth and make things more comfortable, all that the Company could have done has been done.
We believe that the unique position of the assets means that exports are higher than the usual 30%, all of which both adds to the valuation, and adds risk, albeit negligible.
While the efforts that have been evidenced in the 2014 results today are a positive for the Company, a similar approach will be required in 2015 and 2016 to put it on a more secure footing from which to grow in the future.