Proactive Investors - An uptick in drilling and development activity across Union Jack (LON:UJO)’s onshore UK portfolio offers the greatest potential to boost the share price, suggests SP Angel.
A side-track well on an infill drilling opportunity at the Keddington field (55% WI) already has planning consent while procurement of a rig and services is progressing towards an expected spud date during late 2023 or early 2024.
On West Newton (16.7% WI), the operator continues with third-party financing discussions ahead of an anticipated horizontal appraisal well in the first half of 2024.
Lincolnshire oilfield Wressle, meanwhile, should provide cash generation over the medium term not only to provide the potential for further direct returns to shareholders but for expansion, possibly away from its onshore UK core.
Buy with a 66p target price, says SP Angel.
House broker ShoreCap, too, notes that while onshore UK (and in particular the Wressle development) will remain its key focus going forward, Union Jack is now evaluating new opportunities slightly further afield, to mitigate risk in a less-than-favourable UK fiscal and regulatory environment.
“Ahead of forthcoming news of flow rates from Wressle and publication of a new CPR assessing this flagship field, we maintain our Risked NAV estimate at 90p/share.”