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Union Jack Oil confident in growth prospects in UK and USA

Published 20/05/2024, 10:08
© Reuters Union Jack Oil confident in growth prospects in UK and USA
UJO
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Proactive Investors - Union Jack Oil PLC (LON:UJO) executive chair David Bramhill, in the junior energy company’s final results statement today, has given a confident and bullish outlook as he highlighted opportunities to further grow the business.

It comes after a positive year for the Wressle field and after the company’s expansion into America has yielded early success.

Union Jack is in sound financial health being debt-free with a robust balance sheet, Bramhill highlighted.

"Our appetite for additional growth opportunities has been whetted by our recent positive experience in the USA and discussions are at an advanced stage with Reach in respect of materially expanding our activities over the coming months and beyond,” Bramhill said in the statement.

"I am confident that the significant increase in drilling, appraisal and development activity now planned in the pursuit of growth from our balanced UK and USA portfolios has the potential for significant value creation for shareholders.

“We believe our heightened activity and the expected additional news-flow generated, combined with effective investor engagement on both sides of the Atlantic, will continue to attract the ongoing support of our existing shareholders and the attention of new investors, broadening the appeal of the Company to a wider audience.”

Financials

Union Jack reported a £3.298mln gross profit for its financial year, ended 31 December 2023, compared to £5.1 million in the prior year reflecting an easing it 2022’s exceptionally high fuel pricing. Net profit was reported at £859,089, from £3.6 million.

Oil revenue for the twelve months amounted to £5.06 million, from £8.5 million.

Operationally, the company highlighted that the Wressle field continued to deliver following a workover, installation of a down hole pump and other significant site upgrades, and, the team is now advancing plans to drill two additional wells for production, and to deliver gas monetisation at the project.

"In the UK, Union Jack will remain focused on the development of its flagship project, Wressle, where the Operator and joint venture partners have ambitious near-term appraisal and development programmes planned.

“The board is of the opinion that, within the Wressle development, there remains significant material upside which will support the company with revenues for at least another decade.

Bramhill added: "I also look forward to progress at West Newton.

“Encouragingly, the results from this key project to date signal a potentially highly valuable onshore project with resources comparable to those usually reported offshore.

“A significant onshore domestic gas resource, as indicated at West Newton, has the potential to become an important transition fuel in helping the UK achieve its 2050 Net Zero target”

American adventure

Union Jack has more recently embarked upon growth projects in the United States, with investments in Oklahoma where its first well has seen initial success with the Andrews project being declared as a commercial discovery.

"Union Jack's initial successes in the USA, in just a few months, highlight the ease of entry and ability to execute business in that country, justifying the board's decision to seek further growth opportunities internationally to bolster its flagship production and appraisal assets in the United Kingdom,” Bramhill added.

"Following the company's USA entry, involving both the Andrews 1-17 discovery well and the financial attractions of Union Jack's expanding mineral royalties portfolio, I believe that the board's optimism and our further expansion in the USA, executed alongside a proactive drilling campaign, will deliver material rewards in due course.”

Read more on Proactive Investors UK

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