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Today's Market View - Union Jack Oil; Serinus Energy; United Oil & Gas

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Summary

In Brief

 

Union Jack Oil* (LON:UJO~) 0.10p – $62.0mm (0.44p)

West Newton – Well Spudded

 

Serinus Energy (LON:SENX) – 14p

All Caught Up

 

United Oil & Gas (LON:UOG) – 3.35p

Significant Upgrade to Italian Resources

 

 

News In Brief

Union Jack Oil*
(LON:UJO) – 0.10p
$62.0mm (0.44p)

 

West Newton – Well Spudded

The Company has disclosed that the West Newton-02 dual appraisal and exploration well, targeting the Kirkham Abbey Shoal (appraisal) and Cadent Reef (exploration) structures has started drilling, colloquially known in the industry as "spudded."

 

We are carrying a risked value of $15.6mm (0.11p), but if both are successful, up to $133mm (0.94p) to the current valuation.

 

Ahead of the results, we are maintaining our $62.0mm (0.44p) valuation.

 

* - SP Angel acts and Nomad and Broker to Union Jack Oil

Serinus Energy
(LON:SENX) – 14p 

 

All Caught Up

Despite the recent news that the Company's low-temperature separator (where the gas is cooled to remove the larger molecules) has not met design specifications the company, with this announcement, appear to have caught up a significant proportion of the schedule. 

 

What will now be key is how the separator performs under operating conditions, and more specifically, whether there is any long-term impact due to the subpar fabrication.

 

Regardless of the fact, the company has recovered well, and while the proof of the pudding shall be in the eating, shareholders can, for now, feel more comfortable that the plant is working as anticipated and cash flow will soon start to strengthen the company's balance sheet.

United Oil & Gas
(LON:UOG) – 3.35p 

 

Significant Upgrade to Italian Resources

The Company has disclosed that it has published an updated CPR for its Selva gas field in the Podere Gallina Licence in northern Italy. The report details the further net 2.8bcf of 2C Contingent Resources.

 

The value of this net to the Company is larger than would otherwise be expected due to the structure of the Italian fiscal system, which means that it could make a bigger net positive contribution to the Company's cash flow than would otherwise be expected.

 

Of course, in this respect, the only issue is that the asset is located in Italy, meaning that the Company's estimate of 2020 for first gas is achievable, if optimistic given Italy's sluggish bureaucracy.

 

Regardless of the final timing of the first gas, and we believe that it could also be as late as 2022, the Company's owners should be pleased with the fact that the Company has identified an opportunity and quickly brought it into production.

 

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