Union Jack’s Wressle Driving Strong Production Growth and Enhancing Cash Holdings, Dan Slater

Union Jack Oil

Union Jack Oil plc (LON:UJO) is the topic of conversation when DirectorsTalk caught up with Arden Partners Analyst Daniel Slater.

Union Jack recently released an update on revenues from its Wressle field, what were the key points investors should note?

Wressle continues to be a very successful asset for Union Jack, driving significant production growth for the company at a time of high oil prices. This has materially augmented the company’s cash holding, giving significant optionality for funding forward work programmes, while also allowing a return of cash to shareholders in late 2022. Alongside existing production, focus is now on increasing gas infrastructure to allow higher production levels, alongside development of additional reservoir horizons further out.

What has been happening operationally?

The current operational focus at Wressle is on installation of power generation infrastructure, initially for power supply to the project itself, but latterly for local export. Using the produced gas in this way is expected allow higher oil production, both from the existing well but also, potentially, from development of new horizons going forward. This should present an opportunity to recycle Wressle cash flows into further development of the asset, while also helping support or, potentially, grow production rates.

How do you see the outlook for Union Jack?

Going forward, we expect the ongoing Wressle power generation works to continue this year, with the potential for confirmation of development of new reservoir levels in due course. More widely, there is a new horizontal well planned on West Newton (which will be very important in potentially establishing commercial flow rates from this asset), alongside potential drilling on Biscathorpe and North Kelsey. All of this is supported by the Wressle cash flows, and makes for a busy work programme ahead.

Union Jack Oil plc (LON:UJO) is an onshore oil and gas exploration company with a focus on drilling, development and investment opportunities in the United Kingdom hydrocarbon sector listed on the London Stock Exchange AIM market.

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