[source: Union Jack Oil]
Union Jack Oil (UJO , a UK-focused onshore conventional explorer, announced this morning it has passed US$10 million of revenues from its flagship Wressle project, located within licenses PEDL180 and PEDL182 in North Lincolnshire. Union Jack currently holds a 40% interest in Wressle.
Additionally, Union Jack announced it has exercised 4m warrants at 2.5p to subscribe for 4m ordinary shares in Egdon Resources. Following the exercise, Union Jack holds 3.13% of the issued capital of Egdon, worth £910K at close on 3 October 2022. Egdon is the operator of Wressle and holds a 30% interest in the project.
Union Jack said it continues to be cash flow positive, covering all G&A, Opex and contracted or planned Capex costs, including any drilling activities for at least the next 12 months. On 3 October 22, the company's cash balance and short-term receivables stood at over US$10m.
David Bramhill, Executive Chairman of Union Jack, commented:
"The revenues of in-excess of US$10,000,000 from the Wressle development continue to bolster the Company's Balance Sheet.
Since the last production update, another impressive production performance from the Wressle-1 well has been recorded, this encouraging performance continues and the outlook remains positive.
Cash balances continue to expand month-on-month, and we are funded for G&A, OPEX and contracted or planned CAPEX costs, including any drilling activities for at least the next 12 months."
View from Vox
Union Jack Oil reached today's US$10m milestone in a little over a year after operations at Wressle recommenced on 19 August 2021. The milestone further solidifies Wressle's status as one of the most productive conventional-producing UK onshore oilfields, set to become second only to Perenco's Wytch Farm.
To date, Wressle has produced over 225,000 barrels of oil with zero water cut, with an average rate of 300 bopd and instantaneous rates of over 1,000 bopd achieved. Union Jack is actively developing the site, approved for production through 2039, and recently increased its stake in Wressle to 40%. GaffneyCline's recent independent report sees steady production of c. 800 bopd for at least another 5 years.
Ongoing and future activity at Wressle includes installation of permanent production facilities, preparations for the installation of gas export before the end of 2022, and development planning for the Penistone Flags formation. The Penistone Flags reservoir has 1.6mmboe of gross 2C resources, compared to existing 0.7mmboe gross 2P in the producing Ashover Grit and Wingfield Flags.
West Newton, Union Jack's other main asset, is set to become a second major revenue source for the company after a Competent Person's Report (CPR) last week estimated an 85.5% geological chance of success for the project. Large-scale drilling of a horizontal well at West Newton is on schedule for 2023, with commercial production beginning as early as 2026.
Union Jack's unaudited revenues from 1 January to date are in excess of £6.846m, and unaudited 3Q results demonstrated another profitable period for the company. Union Jack remains debt-free and fully funded for at least another 12 months.
Investors cheered today's news with UJO shares up 5.2% today and up 103% YTD despite challenging economic and market conditions.
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