Union Jack Oil Plc (LON:UJO, OTCQB:UJOGF) has taken another decisive step in its strategic expansion into the U.S. energy market. The company has successfully raised £2.0 million through a private placement of 40 million shares at 5 pence, along with warrants, to fund its growing U.S. drilling programme.
Analyst Steve Ferazani of Lighthouse Equity Research noted, “We highlight the previous success of Union Jack’s U.S. entry last year, with lower regulatory hurdles, including positive early results from the Moccasin well (45% working interest) drilled this year in Oklahoma with operator Reach Oil & Gas Company, and its two Andrews wells (45% working interest), which are generating cash flow from production.”
The newly raised funds are earmarked to support the drilling of three Oklahoma wells in the second half of 2025, with working interests of 60%, 43%, and 30%, respectively. These projects carry a combined potential PV10 of approximately $39 million, based on an oil price of $65 per barrel, with estimated chances of success ranging from 40% to 80%.
Union Jack’s solid U.K. operations continue to provide a foundation for growth. The company remains profitable annually, supported by production from the Wressle field (40% working interest) and the recent restart of Keddington (55% working interest) following equipment upgrades. Its U.S. royalty portfolio also contributes to stable income streams.
Ferazani emphasised, “While the balance sheet has remained healthy, with net cash of £2.5 million at the end of 2024, previous U.S. drilling had been funded entirely with cash flow. We therefore maintain our high risk rating.”
Financial and Operational Highlights
- Private Placement: £2.0 million raised through 40 million shares at 5 pence plus warrants.
- Oklahoma Expansion: Three new wells to be drilled in 2H 2025, targeting a combined PV10 of $39 million.
- U.K. Production: Strong contributions from Wressle and Keddington fields.
- Profitability: Maintained annual profitability despite expansion costs.
- Net Cash Position: £2.5 million at the end of 2024.
The company’s commitment to growth is evident in its continued investment in both domestic and international opportunities. With robust production in the U.K. and promising developments in the U.S., Union Jack is positioning itself for potential long-term value creation, while managing the inherent risks of exploration.
In Closing
Union Jack Oil Plc is demonstrating a well-balanced strategy by combining proven U.K. production with high-impact U.S. drilling prospects. The recent fundraising not only bolsters its capacity to execute its drilling plans but also signals confidence in the company’s vision for expansion. While the high risk rating reflects the challenges of exploration, the potential rewards remain substantial, making Union Jack a company to watch closely in the coming year.
