The share-price of Union Jack is, in my opinion, being subjected to nothing more than a selling spree due to a total lack of confidence in the future of UK onshore oil and gas. The government are doing everything they can to cripple profits, councils on the green agenda bandwagon doing all they can to delay new operations and anti-fossil fuel protest groups immediately appealing any planning approval won under appeal.
In Union Jack’s case, the future does remain far brighter than most in that their present assets are either producing or almost certain to be in the development phases prior to any government change.
Their move into the United States has been made at a time when any delay in preparing for what could possibly emerge from a Labour government, if elected, could be catastrophic for UJO in terms of profit and any company’s that rely on funding to continue. It is already quite noticeable that investors are, and rightly so, concerned about the future and reducing their holdings in this sector.
Union Jack is somewhat unique in that it doesn’t rely on placings, its assets in the US are being paid for from cash flows and the portfolio is building in strength.
The Mineral Royalties will I am sure surprise, this investment could easily become part of a number of successful, high output discoveries, repaying the investments in a very short time, leaving a regular revenue stream with no costs involved. I look,forward to many updates throughout this year.
I note on the bulletin boards the constant negativity from the same people, posting constantly throughout the day, every day including weekends, many pointing out the failure of the management to ‘admit’ to Wressle flow rates diminishing. Of course, unless they were privy to the on-site operation, they actually have no idea of the flow rates, which will be available on the NSTA site, as normal, in due course.
I have no doubt there have been fluctuating rates, it stands to reason that until otherwise informed, the downhole pump, the water ingress, the restricted flow rate etc is all subject to daily adjustments whilst under test conditions. We have already been informed that in excess of 1000 bopd has been achieved but in my view, there is a requirement to test and analyse the best flow rate to ensure the maximum long term revenue stream and not to drain the reservoir as quickly as possible, potentially causing damage along the way.
As long as the company is making money from Wressle, it will allow for further investment without the need to fund raise and that in my opinion makes Union Jack a good, long term investment gamble.
I say gamble because with any stock, there will always be risk. For shareholders who have the stomach to weather the storm, I am more than confident this company will prosper and return good value as this year progresses.
if you believe the management, you recognise the potential of the assets and feel confident they will be developed, then panic selling will only lead to disappointment
