Further to the announcement of 5 January 2018, Union Jack Oil plc (LON:UJO), a UK-focused, onshore oil and gas production and exploration company, notes the announcement made this morning by the operator Egdon Resources plc (LON:EDR) in respect of a forward plan for the Wressle oil field and to initiate a new planning application process following the appeal decisions made by the UK Planning Inspector (“Inspector”). The Board of Union Jack is fully supportive of this plan of action.
Union Jack’s Chairman, David Bramhill also takes the opportunity to restate Union Jack’s forward strategy on its wider UK onshore portfolio in today’s favourable oil price environment.
David Bramhill, Executive Chairman of Union Jack Oil Plc, said: “We share the frustration of our shareholders given the UK planning obstacles we have encountered at Wressle, so we fully endorse the decisions of the Wressle joint venture partners to pursue all credible avenues to be able to bring this significant conventional oil discovery into production. In addition to the Wressle forward plan, I would like to reassure shareholders that as Union Jack possesses an attractive onshore portfolio of other producing assets and drill-ready exploration and appraisal targets that, in today’s oil price environment, the Board has been alert to generating improved shareholder value by refining its forward strategy.
Our strategy remains to create shareholder value by building a successful UK onshore exploration and development company focused on conventional low-cost onshore production, development, and exploration drilling. Union Jack’s attractive onshore portfolio contains producing oil fields and drill-ready exploration and appraisal targets which include the assets acquired recently from Cairn Energy being interests in the producing Keddington oil field and the shut-in historic Dukes Wood and Kirklington oil developments.
In addition, in November 2017 we purchased a 20% interest in the producing Fiskerton Airfield oil field, where we expect to increase further production through workovers and other remedial processes that are expected to enhance our cash flow materially. On behalf of the Fiskerton joint venture, Union Jack is also funding a 3D seismic re-processing exercise and our technical team will assist independently in re-mapping the area surrounding this oil field to identify further production opportunities from the existing producing reservoir.
With the oil price approaching $70, we are seeing a dramatic effect on the value of our oil production assets where, for the first time in more than two years, profit margins have increased given the expanding differential between the value of the oil produced and sold, compared to field operating costs that are largely fixed in nature. Today’s oil price environment encourages us to discuss with the operator ways in which to expand oil production at the existing Keddington, Fiskerton Airfield, Dukes Wood and Kirklington facilities that all have existing planning approvals in place.
I highlighted in a recent announcement that it is also our intent that, going forward, Union Jack will undertake “a more hands on approach”. My feedback from shareholders is that this intention is both welcomed and supported so we intend to be more flexible and entrepreneurial in the way we pursue opportunities while keeping to our reputation of applying strict financial and technical discipline.
We continue to review a number of near-term production, appraisal and drill-ready opportunities and, as part of that, we will also seek to expand our commercial partnerships with other like-minded industry participants to jointly pursue the acquisition of interests in late-stage onshore production and development projects at the asset level or by selectively investing in undervalued onshore focused companies.”