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Union Jack Oil PLC on Tuesday said it had reached $10 million of revenue from the Wressle oil field.
Shares in the Bath-based, UK-focused oil and gas company were trading 4.6% higher at 30.33 pence each on Tuesday late morning.
The Wressle oil field, in which Union Jack has a 40% interest, is in north Lincolnshire. Production at the site re-commenced in August 2021. Union Jack said that it continued to upgrade the site and that the well continues to produce under natural flow with zero water cut.
The company said unaudited revenue from January 1 was over £6.8 million while figures from the third quarter demonstrated ‘another profitable period’.
Union Jack also said that it had exercised warrants at 2.5 pence each to subscribe for 4 million shares in Egdon Resources PLC. Following the exercise, Union Jack holds 3.13% of Egdon Resource's share capital, worth about £909,500.
Egdon Resources is the operator of the Wressle development and holds a 30% interest in the field. Shares in Egdon Resources were trading 3.6% higher at 5.54 pence each on Tuesday morning.
Executive Chair of Union Jack David Bramhill said: ‘The revenues of in-excess of $10 million from the Wressle development continue to bolster the company's balance sheet. 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.’
On Thursday, Union Jack also reported, following the publication of a 'Competent Person's Report', that the best case recoverable gas at its West Newton site was 197.6 billion cubic feet. It had a 86% Geological Chance of Success at the wider Kirkham Abbey formation.
The gross net present value with a 10% forward discount rate of the Kirkham Abbey resource was $396.1 million post tax. Union Jack said it was ‘fully funded for the drilling of the horizontal well and testing in 2023.’
Bramhill commented: ‘The conclusions of the CPR signal a highly valuable onshore project with resources comparable to those usually reported from offshore developments and at a time when forward gas pricing is higher than oil. Such a significant domestic onshore gas resource as West Newton will be an important transition fuel in helping the UK achieve its 2050 Net Zero targets.
The Geological Chance of Success of 85.5% in respect of the Kirkham Abbey formation at West Newton is amongst the highest that I have ever observed.’
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