Union Jack Oil (UJO) , a UK-focused onshore hydrocarbon explorer, issued an update on the Wressle-1 well, part of its flagship Wressle project located within licenses PEDL180 and PEDL182 in North Lincolnshire. UJO holds a 40% interest in Wressle.
Union Jack said it has received approval from the Environmental Agency (EA) allowing higher volumes of fluid to be handled at surface and nearby water disposal facilities, effective December 14, 2023. Prior to EA approval, production was constrained to delivering an average of 550 barrels of oil per day.
Since December 14, Wressle-1's surface pump rate has been incrementally increased, resulting in a material uplift in oil production rates, with a gross average rate of 670 bopd since then, and 674 bopd recorded on 17 December 2023 over a 24-hour period.
The recently installed jet pump is capable of handling 1,440 barrels of fluid per day.
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More positive news from Wressle as Union Jack receives its EA permit. Together with the recently installed jet pump, the permit is key to the optimisation of oil production rates at the Wressle-1 well. Since EA approval was granted, production has risen from 550 bopd to 670 bopd, with further flow rate adjustments expected over the coming weeks to determine the optimum value.
The abovementioned recent installation of a jet pump and additional surface facilities at Wressle-1 provide further scope for a material upgrade in oil and gas production. 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 the next 12 months. The company remains debt free, with cash and investments at over £9.25m as of September 8 2023. The capex associated with the pump installation will be offset against the Energy Profit Levy Tax at a rate of 129%.
Markets reacted positively to today's news, sending UJO shares 4% higher in early trade.
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