Union Jack reaches 'landmark' $10m revenue from Wressle

Union Jack Oil announced on Tuesday that “material landmark” net revenues of $10m had been achieved from the Wressle hydrocarbon development, 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.

In addition, the company said it had exercised four million warrants at 2.5p each to subscribe for four million shares in Egdon Resources.

Following the exercise, Union Jack’s holding in Egdon was 17 million shares, representing 3.13% of the issued share capital of Egdon, valued at about £0.91m at the close of business on 3 October.

Egdon is the operator of the Wressle development, and holds a 30% economic interest.

The board said the landmark of $10m of revenues had been generated to Union Jack since the restart of production on 19 August last year.

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

Union Jack said it was still cash flow positive covering all general and administrative, operational and contracted or planned capital expenditure costs, including any drilling activities for at least the next 12 months.

As at 3 October, cash balances and short-term receivables stood at more than £10m.

Unaudited revenues from 1 January to date stood at more than £6.85m, with the board reporting that unaudited third quarter figures demonstrated “another profitable period”, as it remained debt-free.

“The revenues of in excess of $10m from the Wressle development continue to bolster the company's balance sheet,” said executive chairman David Bramhill.

“Since the last production update, another impressive production performance from the Wressle-1 well has been recorded, this encouraging performance continues and the outlook remains positive.

“Cash balances continue to expand month-on-month, and we are funded for general and administrative, operational, and contracted or planned capital expenditure costs, including any drilling activities for at least the next 12 months.”

At 1309 BST, shares in Union Jack Oil were up 7.24% at 31.1p.

Reporting by Josh White at Sharecast.com.