[Source: Union Jack Oil]
Union Jack Oil (UJO ) said it has achieved landmark net revenues of US$2 million from the Wressle hydrocarbon development in which the company holds a 40% economic interest.
The UK focused onshore hydrocarbon production, development and exploration firm said it has generated $2m in revenues since re-commencement of production at Wressle, which is located within licences PEDL180 and PEDL182 in North Lincolnshire, back in August 2021.
In October 2021, Wressle had generated US$1,000,000 of net revenues to the Company. Commenting at the time, Executive Chairman of Union Jack, David Bramhill, told investors: “Wressle is still in the infancy of its development and despite restricted flow and continuing site upgrades, net revenues to Union Jack have been material since mid-August 2021.”
Today, Union Jack told investors that the well at Wressle, which is situated on the western margin of the Humber Basin, is producing under natural flow and that production remains constrained on a restricted choke with zero water cut and staged site upgrades ongoing.
For the first time, Union Jack Oil said it is now cash flow positive covering all corporate, administrative and project operating costs. As at 11 January 2022, the Company reported that it was debt free and held cash balances of £6.27m and receivables of £1.56m.
Bramhill said the revenues of in-excess of US$2m, whilst under test production, are “highly positive” for Union Jack which remains “in prime financial health, as the figures illustrate.”
“We believe that Wressle holds considerable further upside which will be demonstrated over the foreseeable future and we look forward to reporting on progress in due course,” he said.
In addition to Wressle, Bramhill noted that the Company has “three other cash generating projects” and that under current oil prices, for the first time “is now cash flow positive and covering all of its outgoings, including corporate, administrative and project operating costs.”
In an update released last month, Union Jack Oil said the Wressle-1 well had been ‘comfortably exceeding’ initial expectations of 500 barrels of oil per day since its successful completion of the proppant squeeze and subsequent coiled tubing operations in August.
At the time, it was producing ‘high quality oil at a constrained rate during ongoing upgrades at an average rate of 666 bopd following the upgrade of the gas incineration system,’ it reported.
In practice, the well produced 266 barrels net to UJO plus 368,000 cubic feet of gas (147,200 cubic feet net to UJO) over seven days, equating to 727 barrels of oil equivalent per day.
At the time, the Company said it expects to see the completion of testing of the full potential of the well during early 2022 and that decisions will be made in 1Q22 on the plateau production rate, to match with longer-term operational objectives and prudent reservoir management.
Its 2022 focus will move to ‘progressing the optimal method of gas monetisation and finalising plans for the development of other hydrocarbon bearing zones to access the identified material contingent resources, with particular focus on the Penistone Flags reservoir,’ it said.
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