Response to Bulletin Board Comment

I note the comments on the LSE BB regarding director buys, salaries, dividends and buy backs and my opinion is as follows:

Director buys are certainly a positive action to show confidence in the future of the company. They can also be a false leader to increase the SP prior to a fundraise. However, that is not the case with Union Jack, this company is well funded and able to meet all of its funding requirements. The issue I believe, as was mentioned by a BB poster this morning, is the age of the directors and their likely inability to realise the value of their investment. All Union Jacks board are in their 70’s. To buy shares would be literally throwing their salaries away. They wouldn’t be able to dispose of them without the share price being negatively affected and any gain from a buy would likely be short lived anyway. It isn’t the answer to a long term increase in value. I would also suggest that shareholders have no idea of any of the directors personal situations. All to easy to demand they purchase shares based on salaries, but whilst a £300k salary may to some seem obscene, one should take into account their tax and insurance liabilities.

A gross salary of £300,000 is subject to an income tax demand of £121,203 per annum and National Insurance charge of £8,764.60 leaving a take home pay of £170,032.40

So when people suggest David Bramhill or any other director should throw £50k into shares, it isn’t as reasonable as one would think. I am aware of the fact the company does not pay a pension, provide a company car or offer any other benefits. I do believe on this information and taking age into consideration, director buys are not really likely or fair to demand.

Dividends and share buy-backs are always dependent on the available cash. Whilst it may seem the company is drowning in cash, as shareholders we are not aware of the cost of future plans. We have just entered into new ventures in the US, it’s likely we could be drilling West Newton and the Penistone Flags. The company does need to ensure not only these costs are covered, but that any unforeseen set-backs are also covered. Shareholders have been lucky enough to have had a couple of dividends which is quite rare for an AIM oiler and buy-backs have been actioned, but there have been issues at Wressle this year, the tax implications have been increased too. I do believe David Bramhill to be a reputable man who wants shareholders to benefit from the business, but he is also a shrewd man who through his experience has brought this company to where it is today.

For all of us, it really is about the share price. To be able to look at our investments and see they have doubled, trebled, quadrupled or more. I do believe this will happen given the present strategy but it will be patience, not shareholder demands that we will reach these targets.

I for one believe the move into the US was a very positive and wise decision, this country right now is not going to allow Union Jack to prosper.