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Union Jack Oil (UJO) Shares Gain On “Highly Encouraging” Update

Updated: 21 Sep 2021

Union Jack Oil (LON: UJO) on Tuesday revealed a “highly encouraging” update in respect of ongoing operations at the Wressle hydrocarbon development. 

The Wressle hydrocarbon development is located within licences PEDL180 and PEDL182 in North Lincolnshire, on the Western margin of the Humber Basin. Union Jack holds a 40% economic interest in the development.

The company said instantaneous flow rates from the Ashover Grit reservoir of 884 barrels of oil per day (bopd) were achieved on a significantly restricted choke setting with high wellhead flowing pressure.

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Production rates of 480,000 cubic feet of gas were produced per day, while over 950 barrels of oil equivalent per day were achieved. In addition, there was zero water cut. 

The full flow potential of Wressle remains to be thoroughly tested, according to Union Jack.

Executive Chairman of Union Jack, David Bramhill, commented: “The Wressle well test operations continue to comfortably exceed our expectations, with instantaneous rates of over 950 barrels of oil equivalent per day achieved to date.

“Wressle is rapidly demonstrating its deliverability and the results achieved so far augur well for the future and this development is set to become a major contributor in the company's quest to achieve mid-tier status in due course.

“Current production rates indicate that Wressle is currently the second largest producing oilfield, in terms of daily production, in onshore UK after Wytch Farm, and we are confident that the well has materially more to offer during 2021 and beyond.”

Since returning to production on 19 August, Wressle has generated over $480,000 net in revenues to Union Jack.

UJO Daily Chart, Source: IG

The company also revealed that a revision to the environmental permit was received, enabling the installation of a combustion plant to facilitate gas to electric generation.  

Energy consultancy Gaffney Cline & Associates has been commissioned by Union Jack to prepare an updated Competent Persons Report. The Competent Persons Report is a special appraisal report that describes the petroleum history of a region and discusses regional geology and petroleum systems.

“The revision of the Environmental permit now facilitates the potential of an additional revenue stream from electricity generation in due course,” added Bramhill.

Union Jack Oil's share price is currently trading at 24.7p, up 2.92%. This year, UJO shares are down over 22%.

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