RE: Wujo31 Dec 2021 04:34
There are a few scenarios which are contributing to the strength that we are seeing in the oil price today and this is just the beginning. Now should be a wakeup call, and as you say Gwynwin, insufficient investment by the oil majors has been bought on by governments, investors and activists.
But when you think that oil demand will reach pre-COVID-19 levels by mid-2022 and grow for several years thereafter the oil price will only go in one direction with demand not matching supply. OPEC’s spare capacity will be exhausted in 2022 and the days of US Shale hyper growth are over too.
The interesting thing for Union Jack Oil will be the spare cash that the company will hold. With Wressle anticipated to officially go in to production in early 2022, in my opinion, the institutional investors will be watching our share price and the CPR results as we will be on the cusp of being rerated. Close to $80 oil is generating lots of free cash flow already and we will be looking at share buy backs or dividends. My point is that we will be looking at years of oil price increases, and that is why Union Jack Oil is a fantastic investment on the Wressle asset alone, which has the potential to generate significant amounts of cash with Wressle still in the infancy of its development .