Union Jack Oil (LSE:UJO) reported steady operational performance across its UK and US assets, underpinned by consistent output from its flagship Wressle oilfield in Lincolnshire. Wressle continues to rank among the UK’s most productive conventional onshore fields, with average production of around 267 barrels of oil per day in January and meaningful remaining 2P reserves. Elsewhere in the UK, the company highlighted renewed activity at the Keddington oilfield and ongoing progress at the West Newton gas project, where contingent resources and additional prospective targets support longer-term growth potential, subject to securing the necessary regulatory approvals.
In the United States, Union Jack’s Oklahoma operations, partnered with Reach Oil and Gas, remained cash-flow positive despite a softer oil price environment. Production from the Moccasin and Andrews wells has continued to perform, while near-term catalysts include drilling at the high-impact Crossroads prospect and a planned stimulation programme at the Taylor 1-16 well. The group is also expanding its mineral royalty portfolio, adding diversified, lower-risk exposure to US production. Management said a sharpened focus on cost control and operational efficiency is central to improving corporate cash flow and positioning the business to benefit from future changes in energy policy and commodity markets on both sides of the Atlantic.
From an investment perspective, Union Jack’s outlook is supported by a very strong balance sheet, with no debt, and a track record of profitability since 2022. These strengths are partly offset by a sharp compression in profitability during 2024 and volatile, at times negative, free cash flow. Market indicators point to some short-term share price strength, although momentum appears overbought and the longer-term trend remains less convincing. Valuation support is limited by a negative price-to-earnings ratio and the absence of a dividend yield.
More about Union Jack Oil
Union Jack Oil is an onshore oil and gas company focused on production, development, exploration and investment opportunities in the UK and the United States. Listed on AIM and the OTCQB, the company holds interests in a portfolio of conventional oilfields, gas developments and mineral royalty assets, with a particular emphasis on projects in England’s Humber Basin and cash-generative ventures and royalties across US basins including Oklahoma, the Permian, Bakken and Eagle Ford.
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