Union Jack Oil reaches $4m net revenue at Wressle

Union Jack Oil announced on Monday that “landmark” net revenues of $4m (£3.04m) has been achieved from the Wressle hydrocarbon development, at licences PEDL180 and PEDL182 in North Lincolnshire, on the western margin of the Humber Basin.

The AIM-traded firm holds a 40% economic interest in the producing hydrocarbon development.

It said the well was continuing to produce under natural flow, with zero water cut, while site upgrades were ongoing.

As at 25 March, the firm’s cash balances and short-term receivables stood at more than £6.6m.

Early settlement of £2.08m had been paid to Calmar LP for deferred consideration on the acquisition of 25% interests in PEDL180 and PEDL182.

The company said it was covered for all operational and capital expenditure costs, including any envisaged drilling, for the foreseeable future

Union Jack said an operational update on Wressle would be published in April, while its solicitors were engaged to advance legal work on a capital reduction exercise, to enable either a share buyback programme or a dividend payment.

Finally, the firm confirmed it was debt-free.

“The revenues from the Wressle development have created a sea change in the financial robustness of Union Jack,” said executive chairman David Bramhill.

“We are still in the early stages of the process of unlocking the significant upside potential at Wressle which is continuously improving as the site upgrades take effect, the future monetisation of the natural gas at the Ashover Grit reservoir and the substantial upside potential offered by the contingent resource present in the Penistone Flags reservoir that remains untapped.

“Given the future prospects at our core projects at Wressle, West Newton, Keddington and Biscathorpe, the board of Union Jack believes the company is now on a material growth trajectory which augurs well for the future of the company and its shareholders.”

At 1156 BST, shares in Union Jack Oil were up 6.43% at 29.8p.