[source: Union Jack Oil]

Union Jack Oil plc (UJO ) has successfully raised £3.0 million at a price of 22 pence per share representing a discount of less than 10%. 

As flagged in our recent newswire, UJO was initially planning on raising funds to acquire a further 25% interest in the Claymore Piper Complex Royalty Units. 

However, following the strong performance at Wressle, where flow rates achieved greater than 950 barrels of oil equivalent per day, the Company has decided to pivot to solely focus on its core projects at Wressle, West Newton and Biscathorpe. 

The Primary use of these new fund will therefore be : 

Expand the oil production facilities at Wressle that has achieved rates from the Ashover Grit reservoir of 884 barrels of oil per day ("bopd") on a significantly restricted choke setting, with high wellhead flowing pressure and with zero water cut 

Progress a gas to power revenue stream at the Wressle project facility 

Drill the planned side-track well on Biscathorpe in 2022, which the Company believes to be one of the UK's largest onshore un-appraised conventional hydrocarbon targets 

View from Vox 

The Pivot from acquiring a larger interest in the Claymore royalty engine towards investing directly in the Wressle and Biscathorpe developments is entirely logical in our opinion given the significant potential upside of both these fields. 

Wressle in particular, where Union Jack already owns 40%, provides significant potential upside to the Company’s NAV should plateau flow rates be maintained above 600 barrels per day. 

Whilst the placing dilutes analysts’ at Arden valuation from 91p to 83p per share on a total risked basis, the fact the placing only demanded a discount of 10% provides investors with some idea of the excitement currently growing in the Company. 

Reasons to  UJO 

UJO is an onshore oil and gas exploration firm with a focus on drilling, development and investment opportunities in the UK hydrocarbon sector, and currently holds interests in 13 licences in areas including, inter alia, the East Midlands, Humber Basin and East Yorkshire.      

Wressle   

In recent months, Operator, Egdon Resources U.K. Limited, commenced operations to re-complete and reperforate the well located at the Wressle hydrocarbon development site.      

The Ashover Grit reservoir is expected to produce 500 barrels of oil per day at a constrained rate, increasing UJO’s net production by an additional 200 bopd when fully on stream.    

From 19 August 2021 to 9 September 2021, Wressle has contributed approximately US$300,000 net to Union Jack from test production during this short period   

Assuming sustained deliverability, at current production rates Wressle is set to become the second ranked onshore oilfield in the UK next to Wytch Farm   

West Newton 

The UK focused onshore hydrocarbon explorer holds a 16.665% interest in PEDL183, containing the conventional West Newton A-1 discovery well and WNA-2 appraisal well.       

West Newton is located at the heart of the Zero Carbon Humber project area, which aims to promote decarbonising technologies across industrial activities in the wider Humber region.   

North Kelsey 

In recent months, UJO also increased its stake in the North Kelsey project by acquiring an additional 30% from Egdon Resources, taking its stake in the exploration project up to 50%.        

Further financial obligations will be equal between Union Jack and Egdon Resources, in line with both parties’ 50% stake in the North Kelsey Prospect which is located in Lincolnshire.       

The North Kelsey Prospect is a conventional oil prospect along trend from and analogous to the Wressle oil development, which lies around 15 kilometres to the northwest.       

Subject to a successful farm-out, North Kelsey-1 is expected to be drilled during 2021.  

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