Union Jack Oil (UJO) , a UK-focused onshore hydrocarbon explorer, announced the successful installation of a downhole jet pump at the Wressle-1 well, part of its flagship Wressle project located within licenses PEDL180 and PEDL182 in North Lincolnshire. Union Jack holds a 40% interest in Wressle.
Workover operations associated with the pump installation and work to recomplete the well have successfully concluded, and the workover rig has been demobilised from the Wressle site, Union Jack said in a statement.
With the final stages of the surface facilities upgrades nearing completion, reinstatement of production operations at Wressle-1 are expected during the week of October 23 2023.
"I am pleased with the operations being progressed at Wressle. The capital expenditure incurred in the completion of these works is comfortably funded from existing cash balances and will be offset against the Energy Profit Levy Tax at a rate of 129%. I look forward to updating the market once stabilised production has been achieved." commented David Bramhill, Executive Chairman of Union Jack.
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After initially announcing the installation of a jet pump at Wressle-1 at the end of August, Union Jack has now confirmed that a new surface Triplex pump has been successfully installed and connected. Operations are expected to resume next week (October 23-27).
While operations had to pause for 3 weeks while the site underwent works, the installation of a jet pump will have a long-term positive impact on production and revenues from the well. Over 90% of wells today employ artificial lift during their lifecycle, therefore it was an expected development that will ensure continued smooth operation and optimisation of future performance.
Union Jack continues to be highly cash generative, covering all G&A, operational and contracted or planned capex costs, including drilling activities and work programme commitments for at least the next 12 months. The company remains debt free, with cash and investments at over £9.25m as of September 8 2023. As mentioned, the capex associated with the pump installation will be offset against the Energy Profit Levy Tax at a rate of 129%.
Wressle-1 has delivered stable oil production with steadily climbing revenues since August 2021, recently passing US$17m. Cashflow has been further complemented by Union Jack's 55%-owned Keddington oilfield where planning is underway for a side-track well. Additionally, Union Jack's buy-back programme has so far acquired 4.6% of shares in issue, improving EPS accordingly.
In November 2022, Union Jack announced a gas monetisation programme at Wressle that will unlock gas revenues and enable Wressle's oil production limit to be lifted. As it stands, the Wressle-1 well peaks at 1000 bopd, with gas monetisation expected to have a materially positive impact on H2 2023 production.
The installation of a downhole jet pump should further boost production, solidifying Wressle's status as one of the most productive UK onshore oilfields, now generating in excess of US$1m a month for UJO.
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