Countdown to target depth at the Andrews-1-17 well!

Looking forward to this week as drilling completes at the Andrews-1-17 well, Union Jack’s first well in the US. Drilling to a total depth of approximately 5200ft, with a 75% chance of success estimated by Reach Oil & Gas, everyone must be sat with fingers crossed that this comes in for the company and shareholders.

If success is seen with this well, it would not be out of the question to drill a further one in  rapid succession. The company has the cash, there seems no issue in acquiring a contractor, equipment is readily available and one would imagine the land being used for the Andrews well has room for more!

The tax liabilities are far more attractive than presently being levied on UK oil company profits, which could increase even further in the very near future, the time from start to finish is a tenth of the time as there are no planning issues, action groups or antagonists.

The revenues from all wells drilled in the US will be far greater, meaning even a smaller production rate will be worth more than UK bopd.

Drilling 6 wells at 45% of a potential 150 bopd would equate to a comfortable 400 bopd to Union Jack, at $80 per barrel, a cool $32,000 per day, almost $12M per annum, not forgetting the gas revenues to be added in too.

With exceptionally lower drilling costs in the region of $500k, for me, it makes more sense than ever to plough ahead with drilling and the royalty acquisitions.

Just think about the total per annum potential for 6 wells, oil revenues, gas revenues and royalty revenues. Potential here for in the region of $15,000,000 ON TOP OF THE UK REVENUES!

So, in my view it is the US that offers the greater potential for now, not the UK.

What were exciting prospects over here are now being unfairly hammered by the forces that be, this is not the fault of the operators or the management of Union Jack and only a fool with no understanding of the oil industry under this government would think different.

Beset with councils refusing permission, challenges to successful appeal decisions, ridiculous restrictions, net zero, taxes and a total dislike of fossil fuels makes any future in the UK very bleak.

The negativity surrounding Union Jack is ill founded, it is possibly the only onshore oil company presently operating that isn’t going to need to dilute to raise cash, it is almost certainly the only AIM company in this sector that offers investors a long term, low risk chance to earn a great return from these levels and there is no doubt as cash flows increase, shareholders WILL see share buy backs and dividends.