Union Jack reaches $3m net revenue from Wressle

Union Jack Oil announced on Tuesday that “material landmark” net revenues had been achieved from the Wressle development, located within 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 development.

It said a landmark of $3m (£2.21m) of revenues had been generated to Union Jack since the restart of production on 19 August.

Current daily production figures ranged from 600 to over 700 barrels of oil per day from the Ashover Grit reservoir, constrained on a restricted choke.

Union Jack said the well was continuing to produce under a natural flow with zero water cut, while the staged site upgrades were said to be progressing well.

The company said it was still cash flow positive, covering all corporate, administrative and project operating costs, adding that as at 21 February, cash balances totalled £6.16m, and receivables were £2.07m.

As a result of increasing revenues and the effect on cash balances, Union Jack said it was intending to make an early settlement to Calmar of £2.08m around 1 March, for the acquisitions of 25% of PEDL180 and PEDL182, which contain the Wressle development.

That, the board said, would eliminate all major current trade payables.

Oil revenues to 31 December 2021, meanwhile, would be at least £1.89m, up from £0.16m in 2021, with the company confirming it was debt free.

“The revenues of in excess of $3m to Union Jack from Wressle, whilst under test production, are highly positive for the company, which remains in robust financial health as the above figures illustrate,” said executive chairman David Bramhill.

“We believe that Wressle holds significant further upside which will be demonstrated over the foreseeable future, and we look forward to reporting on progress in respect of site upgrades and achieving optimum production rates in due course.

“In addition to Wressle, the company has three other cash generating projects and under current oil prices, remains cash flow positive covering corporate, administrative and project operating costs.”

At 1347 GMT, shares in Union Jack Oil were up 7.65% at 21.8p.