More great news from Union Jack Oil yesterday as the second well in their planned advance into the US is spudded. Although we still await the stabilised flow rates from Andrews 1-17, we are aware it has achieved rates of up to 100 bopd whilst cleaning up as upgrades are installed to get to a regular production phase. This second well should almost certainly be on a par, so we could hopefully look forward to confirmation of 135-150 bopd each, equating to in the region of 130 bopd to Union Jack. Without the ridiculous taxation burden applicable in the UK, this approximate $3,500,000 per annum revenue stream will be worth considerably more and will almost certainly be increased as the third Andrews well is drilled, something I feel is in the ‘plan’.
Looking at the images on X today, the proximity of the two wells and with what we know about the secondary production, one could expect to hear any water production will be diverted directly to the Coker injection well mentioned in the RNS of 11th June. This would almost be like converting water to oil, something that could substantially increase revenues as both the Rogers and S&M wells begin to increase production.
Whilst the UK oil sector may look less attractive than ever now Labour have taken power, and today with Ed Miliband’s absolutely ridiculous new legislation for the NSTA to refuse all drilling applications, I feel quite comfortable that Union Jack have made all the right decisions in the nick of time. Instead of burning cash trying to get planning issues resolved or waiting for JV partners to get their arse’s into gear, the board have taken the bull by the horns and diversified into the US, purchased revenue bearing Mineral Royalties, drilled a well, spudded a second, bought into other opportunities and are making, in the words of David Bramhill, remarkable progress.
I am very excited to see the outcome of the secondary recovery, this is something that could produce some serious additional revenue for little cost or effort, resolves water disposal from as many wells as the company drills on the Andrews site and could last for many years.
I don’t look at the bulletin boards very frequently any more, they are filled with rather bilious people who have nothing better to do with their lives but strive to spread negativity on this company, some not even invested. However, when you look at all the rest, is not Union Jack the best?
Their peer companies seem to be achieving little, raising time after time, smaller amounts too, as the lack of interest in supporting them wanes. Should this company ever need to raise for any worthwhile prospect, they have not only the UK market to pass the hat around but I am sure US investors would surely dig deep too.
Unique in the fact they have a strong revenue stream from their Wressle well in the UK which has not only ensured there has been no need to raise funds, it has also paid, to date for all of their drilling activities in the US which is pretty amazing.
There’s no doubt this company is terribly undervalued based on their plans and their success to date and I feel sure that the future will reap rewards for shareholders who remain invested.
At the AGM this year, there was a resounding show of hands for the board of directors and strong support from major shareholders who saw, listened and understood the trials and tribulations experienced trying to operate in the UK. It is a testament to David Bramhill and the rest of the Union Jack team that they have got to where they are today.
All we need now is for the market both here and in the US to realise and appreciate what a super little company this is.
I wish all shareholders the very best of luck!
