Could you run an oil company?

For all the complaints about the share price, of which I would agree is abysmal when you look at the fact Union Jack is a rare commodity in the onshore UK oil sector being profitable, debt free and drawing in revenue in the hundreds of thousands every month, nobody should disagree that the decision to move into the US was a shrewd and wise move by David Bramhill.

This venture is looking to be one that will ensure the company can progress operations uninterrupted by planning objections, high taxes, long delays on obtaining site equipment, activist annoyance and the fear of not obtaining future permission to develop any of the portfolio assets.

I read on the bulletin boards today a call for David Bramhill to go, the desire by Heid to get onto the board, the accusations he hasn’t managed the company well. All ridiculous claptrap formulated by people who have absolutely no idea of how to run an oil company, no comprehension of what goes into formulating a deal and bringing it to fruition. No idea of the time and effort, the financial management and planning, producing the interim and year end results, the audit, the annual report consisting of almost a 100 pages, the AGM, board meetings, joint venture partner communication and meetings. The responsibility imposed on the board to choose the right investments, the most likely successful assets, the pressure to ensure all this is reflected in the share price.

As things stand, the portfolio, the revenues, the dividends, the buy-backs and everything else that has been done and is being done is not being reflected in the share price and this is NOT as some would suggest, a management failure.

Had the UK government not imposed a 75p in the £1.00 tax on oil and gas companies, had they not extended this, had not the Labour leader confirm he was going to raise this even more, had he not also stated that he was in effect ensuring the end of the fossil fuel industry by stopping all future licences, the value of Union Jack would be substantially higher than it is now.

Investors should remember and recognise the fact that this company is not an operator, it has no control over timelines. When the management are provided with a date that a certain asset will be mobilised, they inform the market with the best intentions. But when the operator then moves the goal post, it is hardly their fault, is it? This is just as disappointing for the company as it is the shareholders yet when things change and the market drops the share price, the bulletin board idiots blame, yes you guessed it, David Bramhill!

Reading today of one fools desire to get onto the board believing she could sort the share-price did make me laugh. She would give a great big dividend, create operational havoc and Union Jack would be raising cash within a year 😂

Investors should focus on the US operations and for now, the UK revenue from Wressle. Nothing else is, in my opinion ready to start producing any revenues in 2024, possibly even 2025 and none of that is David Bramhill’s fault either.

What he has done by diversifying into the United States of America has ensured shareholders will still have their money in a going concern because relying on a future in the UK is looking very shaky.

This year with the flow rates pending on the first well, the Andrews 1-17, the confirmation that the Andrews-2 has been staked, over 160 mineral royalties with major US oil companies and additional wells likely, investors will no doubt see considerable news flow.

I have looked at the charts for a number of oil companies from BP and Shell down to Europa Oil and Union Jack is hardly floundering in comparison. It’s a shitty market and there’s no doubt that in reality, hoping for any recovery as a UK oiler operating in the UK will deliver no relief for the share price.

I don’t believe for a moment that the Andrews well is spitting out 20 or 30 bopd, there is a strong feeling of confidence being seen by the board and moving on to the second well before the first has been completed is a sign that there is a lot of good news to come. With the average oil production from wells in the vicinity being in the region of 150 bopd, there is absolutely no reason to believe the Andrews wells will be any different. Two wells could produce 300 bopd of which Union Jack would receive revenue for 135 barrels every day, approximately $11,000 per day, almost $4,000,000 per annum. This is a no brainer and there is every possibility a third Andrews well could be announced before the year is out…….$6,000,000 😲

This is not out of the question when the cost of a well is less than $500k. An extremely quick pay back too.

This is more than the company gets from Wressle based on present production with the tax liability now in place so this is where the company will need to concentrate, the United States of America and look to develop as many deals as possible. I look forward to an update in the very near future that will confirm David Bramhill’s beliefs are well founded. I wonder how the bulletin board fellows will react to positive flow rate news?