Union Jack looks overseas to cut risks to UK assets

Union Jack Oil plc is investigating international oil and gas opportunities to lessen future risk in its UK projects.

STRATEGY

In its half year report, the company said that there were still “several rich pickings” in onshore domestic oil and gas but that the regulatory process was “painfully slow”.

“Over the past year we have considered the potential UK political environment and the possible impacts on Union Jack’s business development over the coming years,” added executive chairman David Bramhill.

“To mitigate future risk, the board believes it is compelled strategically to seek growth opportunities further afield in politically safe regimes and with sympathetic views toward the oil industry, without compromising the world’s environmental objectives and the aim of a net zero target by 2050.”

Over the past six months the company’s appointed team of specialists has provided a “bespoke service” to generate potential “value adding” projects for review.

The projects that would be self-funding in the short term, without straining the company’s finances, to allow it to focus on its onshore UK investments.

FINANCES

Results for H1 2023 ended 30 June 2023 showed a fall in net profit to £572,263 (H1 2022: £2,034,086).

Gross profit also fell to £1,608,973 (H1 2022: £2,833,629) and revenues decreased to £3,584,866 (H1 2022: £4,384,254).

Union Jack said that the average oil price received for the period was US$80 (H1 2022: $104) and that foreign exchange movements had a negative effect on revenues.

Cash, near term receivables and investments are in excess of £9,250,00.

Its main investment in the joint venture Wressle project, along with revenue from the Keddington oilfield, resulted in an “extremely robust balance sheet”.

Wressle has produced nearly 500,000 barrels of high quality oil from the Ashover Grit formation alone, while more wells are planned for Keddington, Wressle and West Newton.

Most of the company’s long-term cash is held in a “competitive, interest bearing account, without risk to funds” while the company has no debts and is fully funded for the next 12 months.