RE: Good Read22 Mar 2019 07:55
Union Jack Placing.
A few surprised faces today as Union Jack Oil announce a placing to raise £1.75 million, through the issue of a total of 2,333,333,334 New Ordinary Shares at an issue price of 0.075 pence per share.
Whilst this may feel like a bit of a kick in the teeth for long term holders, who were enjoying a share price double that less than a month ago, the reason for this fund raise is far more positive than most.
AIM is a platform for raising cash and in the most, exploited by a large majority of companies who either are hoping for a good result, paying for a bad result or simply keeping the wages paid with absolutely no intention of doing anything but.
In fairness to Dave Bramhill, I do think this is a man who DOES intend taking Union Jack Oil onto a rosy future and todays news is another step in the right direction to ensuring this.
The usual reaction to placing news is despondency. It allows the day traders to exploit the news through social media platforms in an effort to encourage selling, thus dragging the SP down faster and lower, allowing a good entry point for a quick profit. People also fail to read the RNS;'s fully and digest the reason for the raise.
It is worth noting that UJO are raising cash to progress Union Jack's wider activities 'following the drilling' of the West Newton-2 conventional appraisal well and ?not ?to support the present operations. West Newton, the high chance of success game changer for UJO is fully funded and only weeks away from drill commencement. Just read below the potential for the company and note the wording I have highlighted.
· West Newton assigned Best Estimate Contingent Resources of 189 Bcf of gas equivalent or 31.5 million barrels of oil equivalent (gross) in a Competent Persons Report
· Compelling immediate and future economic value from a development of the gas discovery alone: the Operator's NPV10% for the gas discovery alone is US$247 million and generates a 52.5% ROR
· Considerable upside potential from the lower Cadeby Reef oil exploration target underlying the gas reservoir that will also be drilled with Best Estimate Prospective Resources of 79.1 million boe (gross)
· Further significant upside potential from other numerous prospects and leads on the licence
· The discovery also benefits from proximity to existing gas pipelines and infrastructure
· A successful appraisal well at West Newton-2 is expected to deliver a major onshore gas development
If you haven't read the full RNS thoroughly, then please do. https://investegate.co.uk/union-jack-oil-plc--ujo-/rns/fundraising--circular---notice-of-general-mee...
Sign In
Follow the stocks
