Fossil fuels are certainly not in favour, not just in the UK, but worldwide.
However, as more and more countries begin to realise their economies are crashing due to their flawed research into achieving net zero, they are quietly reversing direction.
The fear of blackouts, heating inefficiency, inability to maintain the charging of multiple electric vehicles and the lack of reliable energy from wind and solar, is bringing it home that without coal, oil, gas and nuclear, consumer needs cannot be met.
The UK, whilst experiencing the same lack of energy security, seem to be still focused, albeit experiencing a reality that net zero simply is not going to meet any of the deadlines, on killing off the oil industry.
This is having a negative effect on companies like Union Jack in that they are, through a ridiculous tax rate and planning system, looking to divert their cash elsewhere outside of the countries they are operating and are registered in.
Every day I see the ‘demands’ for West Newton to be mobilised, the Penistone Flags to be drilled, Biscathorpe to commence, yet nobody seems to take into account the costs to profit ratio which under the present taxation system doesn’t really offer any enthusiasm to rush into these assets in my opinion. The company needs to see where a general election leads because if the Labour party get in, pumping oil or gas in the UK will be like mining fools gold.
On the other hand, if they do get in, the drill needs to be turning beforehand in both West Newton AND the Penistone Flags as once started, they can continue. Once finished, they can be temporarily be laid to rest until the outlook changes.
So I feel assured that some form of mobilisation will occur at both assets before any sign of a Labour government is recognised.
In the meantime, shareholders in Union Jack are extremely fortunate in that the company can diversify, ensuring the continuation of revenues from its venture into the United States regardless of where the land lies in the UK, with no painful fund raisers likely.
When I look at many similar companies, they have little cash, poor assets and little hope of escaping the present situation and this does provide me with a lot of confidence in the management of Union Jack. With many years of experience, David Bramhill has steered the company to profitability by investing in the right assets. One should remember that few AIM companies ever get to this stage and Wressle was a winner for three companies and their shareholders.
One thing of note and I refer to a bulletin board post earlier, many of the AIM listed oilers who have struggled over the past year or two will be incredibly lucky to bounce back from all time lows as they will need to fundraise and that additional dilution will push them further towards liquidation.
Union Jack must be one of the very few UK based oilers that is actually progressing whilst others are lingering. That progress will ensure the future and ensure shareholders see what I believe will be a substantial return as the markets recover and the net zero palaver is brushed under the carpet once and for all.
