Headlines
• In Brief:
o Union Jack Oil*** (LON:UJO – 0.135p) – $8.8 – 43.0mm (0.17 – 0.82p) – Bolstering the Portfolio
o Jersey Oil and Gas (LON:JOG – 180p) – Verbier Discovery – Good For JOG, Good for AIM
o Magnolia Petroleum (LON:MAGP – 0.08p) – Not the Focus
o Urals Energy (LON:UEN – 65p) – Dividend Declaration a Statement
In Brief
• Union Jack Oil*** (LON:UJO – 0.135p) – $8.8 – 43.0mm (0.17 – 0.82p) – Bolstering the Portfolio: Today’s acquisitions further bolster the Company’s position onshore UK, and demonstrates once again that management continue to focus on growing shareholder value. With this acquisition, our valuation becomes $8.8 (+39%) – 43.0mm (+9%) (0.17 – 0.82p), an increase of 39% at the lower end 10%. With the Wressle planning appeal impending, the Company’s portfolio to migrating more towards production/development, away from its historic exploration base, and with that come sustainability.
• Jersey Oil and Gas (LON:JOG – 180p) – Verbier Discovery – Good For JOG, Good for AIM: Today’s news remains the market (if any were needed post Hurricane) of the value creation that can be generated from exploration. While there is a way to go yet before the discovery can be declared commercial, this is an important first step.
• Magnolia Petroleum (LON:MAGP – 0.08p) – Not the Focus: Today’s news is a little surprising in that with all that is going on, that the Company should undertake a costly and time consulting process to consolidate the shares to “alter the perception of the Company.” It should be suggested to management that if they want a better perception and a higher share price, that they should deliver value to shareholders, the numerator, not alter the denominator. The focus should be completing the transaction with Western Energy Development (“WED”), and getting the $18.5mm (“Investment Pool”) in to the Company and working. We suggest that the Company and WED should be clear about what proportion of this raise of the Investment Pool has been raised, if less that the full $18.5mm, how much of it remains to be raised, and more importantly, when the Company can start to leverage off of the Investment Pool and start to generate value for shareholders.
• Urals Energy (LON:UEN – 65p) – Dividend Declaration a Statement: While today’s dividend at $0.062 isn’t especially large in absolute terms, it still represents a ~7.30% yield to the current share price. More importantly, however, is the fact that after all the Company has experienced, that it is now in the financial position to pay a dividend should be taken as a sign of how well this management team have dealt with the position they were left with. Investors and management should rightly be pleased with the position the Company is in, and what this means for the outlook.