What exactly is it that makes the entry into the United States so interesting and exciting that has yet to sink in?
I don’t think many understand or realise the full potential of the Mineral Royalties that Union Jack have purchased. These royalties are linked to a number of already producing wells alongside a number of wells still to be drilled and the companies involved are big players.
Every one of the royalties we have in these operations could be tagged in with major producers, discoveries that could be something substantially lucrative to the companies involved and pay unknown, exciting premiums yet to be realised.
One or two gushers and Union Jack’s mineral royalty revenues could go through the roof.
These payments will just go on and on, longer than a quarter of a century in fact, increasing in value with no further financial input and no operational or final costs.
Back in January, the company had already earned in the region of £60,000 from the first purchases.
Whilst they do not seem to get discussed very much, they are going to be generating a lot of news over the coming year.
Then we move to Union Jack’s first well presently being drilled in Oklahoma. We must be nearing the final few feet before hitting the 5200ft target zone and with a 75% chance of success and only 8 days to complete and flow test, the company could be updating shareholders as soon as the end of next week.
If successful, who knows what the production will be, but the Hunton Limestone was discovered to be productive in the Beebe, Oklahoma area in 1921. Since that time it is estimated that 4,300 Hunton wells in 200 fields have produced 277 million bbl of oil. The largest Hunton field is West Edmond, where 736 wells have produced more than 106 million barrels of oil. So we have some great history on the oil in place in this region.
What makes the Hunton so exciting is that whilst Reach estimate the production to potentially be about 150/70 bopd, some years ago, Torchlight Energy provided an operational update on its Hunton Limestone assets, namely the Boeckman 1-14H confirming its newest producing well was put into production 3 weeks prior and was producing 733 BOPD with 669 MCF per day in gas. Production continued to increase as the well was cleaned up. The well was expected to take approximately 60 to 70 days to reach optimal production.
Imagine if our 45% share of the Andrews-1 well flowed anywhere near this? The Boeckman 1-14H was drilled over a decade ago and technology, drilling and recovery methods have improved considerably since then.
Union Jack in my opinion is extremely undervalued and there is absolutely no doubt in my mind that 2024 will see a substantially higher share price as the US assets are increased, potentially a few more wells drilled and the mineral royalties increasing in value.
David Bramhill and the board deserve nothing but credit for taking the bull by the horns, realising and accepting the UK onshore oil sector is in decline and likely to remain in that direction for a number of years.
Shareholders could well be singing their praises in the very near future.
