Union Jack losses widen as it presses on with development work

(Sharecast News) - Union Jack Oil reported a wider loss of £1.69m in its final results on Monday, compared to £1.1m in the prior year, as it talked up its development work in the year ended 31 December.

The AIM-traded firm, which remained pre-operational revenue, said it was fully funded for all of its current drilling and well testing commitments.

Its cash balance totalled more than £5.5m as at 1 May, the board said, adding that the company remained debt free,

On the operational front, Union Jack noted the successful drilling of the West Newton A-2 conventional appraisal well during the year, where initial petrophysical evaluation had identified a gross oil column of 45 metres, underlying a gross gas column of 20 metres within the Kirkham Abbey formation.

It said permission had been granted by the Planning Inspectorate for the development of the Wressle hydrocarbon discovery, where first oil was expected during the second half of 2020.

Union Jack said economic modelling at Biscathorpe indicated a "financially robust" project in the current oil price environment.

Approval was also received from the Environment Agency for the restart of well testing at West Newton A-2.

"The company, during 2019 and to date, has advanced its key projects, and seen drilling and appraisal activity, supported by technical research input from our very competent technical team, resulting in an accretion in asset value and providing clarity on the next steps towards commerciality," said executive chairman David Bramhill.

"I have no doubt that, even in these difficult times, given our attractive projects, we will achieve our goal of increasing production materially and becoming a significant mid-tier UK onshore producer in the medium term.

"In the meantime, I am certain that the news stream arising from the ongoing progress of our endeavours will vindicate our optimism in respect of our licence interests."

Bramhill said Union Jack's wider asset portfolio was "well balanced", with the relevant components of production, development, appraisal and discovery, adding that it was fully funded for all its planned commitments going forward.

"The future of Union Jack remains bright."

At 0917 BST, shares in Union Jack Oil were up 7.5% at 0.13p.