I read with little interest but much amazement on the bulletin boards, the ranting and raving of people with little understanding of the oil industry, little knowledge if what is going on around them and their total inability to recognise their own inadequacies by not understanding the risks of investing in a market (AIM) that is high risk and in general, seeing most companies listed on it decreasing in value.
I see a number of completely inadequate, mentally challenged fools who accuse the management of Union Jack of not achieving anything over the years, one even suggesting the Executive Chairman should be placed against a wall and shot!
Well, let me just remind these twats (apologies but most of them are) that all company’s that list on the Alternative Investment Market do so to raise money in the hope their company moves from a dream to a success, from debt to profitability. Most fail to achieve this dream, most will place and place and place without returning anything to shareholders before either going bust or delisting.
Union Jack has had its fair share of placings, one could not deny that, but that money raised led to a number of valuable asset purchases, four that are now producers, two in the UK and more recently, two in the United Staes of America. With no placings for a number of years, a few dividends paid and some share buy-backs, all from revenues earned from UK oil production, these events alone signify a level of success for the company rarely seen by investors in this risky market, let alone in such torrid times seen by this industry over recent years.
Now, with challenges being seen by green and anti-fossil fuel activists to every planning application, with councils rolling over, the ruling in the recent Finch case, the eagerness of legal forms to take on every objection by these activists, funded by some anti-fossil fuel organisation, it is becoming abundantly clear that there is no future whatsoever for any of the assets the company presently hold ready to develop. Assets that only a few years ago were in preparation to be developed, high value prospects that would have increased the value of shareholders investments, of both Union Jack and that of its JV partners.
The signs have been there, many company’s have held on in the hope that they would be able to proceed with their plans unabated, never expecting the level of support for the green lot or the inability and reluctance of both the government and local councils to fail to take up arms and defend their own planning agreements.
But, not in the case of Union Jack who’s board under the leadership of David Bramhill made a decision that in my opinion has saved shareholders from what could be a serious situation with just two assets to keep the company alive. With no chance of any further development in the UK, it would have not been an easy task to ensure the company progressed had not the early decision been made to team up with Reach Oil & Gas to start drilling in Oklahoma, using funds amassed from Wressle and Keddington. No fund raising, everything paid from the cash at bank. This canny approach to careful financial planning has kept the company going, paid all the costs of not only these drills but additional planned wells and of course the revenue generating Mineral Royalties. Royalties that literally cough up cash with no costs other than the original purchase price.
The more I read the rants on the bulletin boards, the more I see how ridiculous the comments are. Do people not understand the restrictions that are imposed on any company listed on the London Stock Exchange? Do they not understand that every comment made by the company in an official RNS is checked for accuracy and honesty before it is released? The company does not simply write it and publish it. An RNS is extremely well scrutinised by a number of people before being signed off, to ensure accuracy, honesty and clarity. It is not just the words of the company but its advisers, its broker and its Nomad.
How many times have I seen people say “oh, but DB said this, or DB said that” 6 months ago. Well, when that information was released, it would have been accurate and based on the information at hand at the time. Things as we all know can change overnight. You only have to look at Biscathorpe, North Kelsey, latterly Wressle. JV partners can change their decisions or timescales. There is very little a company like Union Jack can do, as an investor in their operators, to circumnavigate their actions. The ‘best laid plans’ are not always achievable when relying on a third party.
There’s absolutely no doubt that when the company invested in Biscathorpe, it was a major success in that when the results were analysed by Graham Bull after it was thought to be a duster, it became the largest un-appraised hydrocarbon discovery in the UK! When the West Newton operation was initially concluded, it was the largest gas discovery in half a century! Great investments made by the board of Union Jack which through no fault of their own have been as good as shelved. Does anyone not think that even if Reabold were to start mobilising there would not be an immediate challenge to the planning? Activists in waiting, lawyers rubbing their hands at every UK opportunity in this sector. The UK oil industry, onshore and offshore is a dead duck for as long as there is a governmental belief sun and wind can power the country’s needs. Well, it can’t and when we are seeing power cuts, pensioners dying from the cold, hospitals losing patients, schools closing because they can’t keep classes warm and mass outcries from the public, only then will the demand return for oil and gas and that is when the assets that Union Jack are invested in realise substantial value.
In the meantime, Union Jack is motoring in the USA. With two successful, producing wells, more to be drilled this quarter and no doubt additional operations in 2025, shareholders, however some may feel about the present share price, should remain extremely confident the board, whom they put their trust in, have made the right decision to diversify, chose their timing extremely well and I feel sure this will show over the course of next year as they further cement their relationship with Reach Oil & Gas.
My advice would be to completely ignore the ridiculous chants of shoot the management, it is this management that has brought the company to profitability. This management that has paid dividends. This management that has reduced the shares in issue. This management that invested in UK assets that have paid for the US entry. This management that holds assets that I feel sure will be immensely valuable in the future and this management that deserves a lot of credit for doing so.
I look forward to seeing the Taylor and Moccasin wells mobilised before year end, Keddington brought back online and hopefully an idea of the plans for 2025.
On that note, good luck to all shareholders, don’t lose the faith, I can see which way the company is heading even if some can’t!
