Union Jack’s investment into Beacon Energy was done on the back of their drilling operation on the Schwarzbach-2(2.) well in Germany. Unlike normal investors, the board of Union Jack met with the management of Beacon and are familiar with their onshore assets in Germany. Their opinion was that they hold impressive scope and upside potential for both the near and mid-term.
David Bramhill stated “Without doubt we see a synergy between Beacon’s and Union Jack’s modus operandi and we look forward to the results of what appears to be a very encouraging and value accretive work programme going forward, including the testing of the Schwarzbach-2(2.) well.”
The decision to take over 3% in the company would have been based also on the geological opinion of Union Jack’s own technical team and the problems encountered during drilling a risk that was worth taking.
What should be noted is that Union Jack is an investment company and the due diligence would have been done prior to any entry into a placing. Like every shareholder, the confidence in a successful drill was high and the return could have been quite substantial.
Whilst quite a large investment was made, one should remember it only amounts to less than one month’s revenue from Wressle revenues and it could have returned over a million pound profit on the expected result.
However, today’s placing, as painful as it is for all shareholders will hopefully see the side track successful and a good revenue stream from the well production.
Luckily, Union Jack are is such a good financial position, they can wait as long as it takes for Beacon shares to recover.
