Union Jack reaches $11m revenue from Wressle since restart

14th Nov 2022 16:48

(Sharecast News) - Union Jack Oil announced on Monday that material landmark net revenues of $11m had been achieved from the Wressle hydrocarbon development, in licences PEDL180 and PEDL182, on the western margin of the Humber Basin in North Lincolnshire.

The AIM-traded firm holds a 40% economic interest in the development.

It confirmed the "landmark" $11m revenue level had been generated to the company since the restart of production on 19 August last year.

The well was continuing to produce under natural flow with zero water cut, while site upgrades were ongoing, and a gas monetisation plan was in place for both the Ashover Grit and Penistone Flags reservoirs.

Union Jack said it was continuing to be cash flow positive, covering all general and administrative, operational, and contracted or planned capital expenditure, including any drilling activities or work programme commitments for 2023 and into 2024.

As at 11 November, cash balances, the company's short-term receivables and liquid investments stood at more than £10.8m, with the board adding that its unaudited third quarter accounts showed a further profitable period.

Unaudited revenues from 1 January to date were above £7.9m, compared to audited 2021 revenues of £1.89m, while the firm remained debt free.

Union Jack announced a maiden special dividend of 0.8p per share, and initiated a share buyback programme in a bid to boost earnings per share.

"The revenues of in-excess of $11m from the Wressle development continue to bolster the company's balance sheet," said executive chairman David Bramhill.

"Since the last production update, another impressive performance from the Wressle-1 well has been recorded and the trend, as seen throughout 2022 remains positive.

"Cash balances are expanding significantly on a monthly basis and we are funded for general and administrative, operational and contracted or planned capital expenditure costs, including any drilling activities or work programme commitments for 2023 and into 2024.

"We are pleased to have announced a maiden special dividend of 0.8p per ordinary share, payable on 16 December, as well as the commencement of a share buy-back programme where the company controls the number of shares to be bought, within the authorities approved at the annual general meeting in June."

Bramhill said the firm had achieved a "number of significant milestones" during 2022, including a strengthened balance sheet, cash generation, profitability, and an upgraded reserve and resource base.

"We have high expectations that this strong performance will continue for the foreseeable future."

At 1554 GMT, shares in Union Jack Oil were down 1.91% at 34.33p.

Reporting by Josh White for Sharecast.com.