Pitched at 0.7p the broker’s target is more than 400% above Monday’s market price of 0.13p.
Union Jack’s financial results statement this morning highlighted the junior oil firms positive funding position.
The company told investors that it is fully funded for all its current drilling and well testing commitments in its full-year 2019 results statement. It had a £5.5mln cash balance at the start of May 2019 and it remains debt-free.
“Union Jack’s investment case is relatively unique given its robust financial position and attractive project economics across its core asset base in our view,” SP Angel analyst Sam Wahab said in a note.
“Shareholders will also be encouraged that the West Newton work programme continues despite current UK restrictions.
“West Newton is estimated to contain a base case of 146.4MMbbls of STOIIP and 211.5Bcf of gas – one of the largest UK onshore conventional discoveries.”
In Monday’s statement, executive chairman David Bramhill said: "My confidence in respect of Union Jack's future remains highly positive.
"The company, during 2019 and to date, has advanced its key projects, and seen drilling and appraisal activity, supported by technical research input from our very competent technical team, resulting in an accretion in asset value and providing clarity on the next steps towards commerciality.
"I have no doubt that, even in these difficult times, given our attractive projects, we will achieve our goal of increasing production materially and becoming a significant mid-tier UK onshore producer in the medium term.”
He concluded: “Union Jack's wider asset portfolio is well balanced with the relevant components of production, development, appraisal and discovery and we are fully funded for all our planned commitments going forward. The future of Union Jack remains bright.”
Presently, the company is looking forward to the testing of the West Newton A-2 well, which hit a 45 metre oil column, and, preparations are underway to advance to the drilling of a third West Newton well.
In the second half of 2020, the company anticipates the start-up of the Wressle oil field.