LONDON (Alliance News) - Union Jack Oil PLC Monday said it expects to be in production later this year through its interest in the Wressle discovery as it reported a slightly wider loss in the last financial year due to an increase in costs.
The oil exploration firm focused on onshore fields in the UK said its pretax loss amounted to GBP586,460 in 2015, slightly wider than the GBP546,354 loss reported in 2014 as the company, which does not currently generate any revenue, saw its costs rise in the year.
Administrative expenses increased to GBP605,742 from GBP551,056 the year before.
Union Jack holds an 8.33% interest in the Wressle discovery that was made in 2015 on PEDL180 in Lincolnshire. The company and its partners aim to begin commercial production in the second half of this year and are currently in the process of gaining the necessary approvals for the field development plan.
Production will initially start at 500 barrels of oil per day from the Ashover Grit reservoir, meaning Union Jack would be entitled to around 42 barrels of oil per day.
Fellow London-listed Egdon Resources PLC is the operator of Wressle with a 25% stake whilst Europa Oil & Gas PLC owns a 33.34% stake in the asset. Celtique Energie holds the remaining 33.33% stake.
The other big development for Union Jack in 2015 was the company's acquisition of a 10% interest in the Keddington oilfield on PEDL005 in Lincolnshire back in September. The Keddington-3Z well is currently producing around 30 barrels of oil per day, meaning Union Jack is entitled to around 3 barrels a day.
Edgon Resources owns a 45% stake in Keddington whilst Nautical Petroleum Ltd owns 10% alongside Terrain Energy Ltd which holds the other 35%.
"I am enthusiastic in respect of the year ahead. Union Jack is in a sound position with an interest in a discovery at Wressle, which is moving closer to development, with a view to commencing commercial oil production during 2016, together with a healthy cash balance to progress projects and fund its existing portfolio of drill-ready potentially high impact exploration prospects," said Executive Chairman David Bramhill.
Union Jack had a cash balance of GBP2.6 million at the end of April 2016, which has fallen from around GBP4.2 million at the end of 2015. At the end of 2014, the company had cash of GBP3.5 million.
Union Jack shares were up 11% to 0.144 pence per share on Monday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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