Union Jack Oil (LSE:UJO) has announced that drilling operations have commenced at the Crossroads Well in Oklahoma, operated by Reach Oil and Gas Company Inc. The well was spudded on 5 May 2026, with drilling activity expected to last around 10 days before results are communicated to shareholders.
The company owns a 43% working interest in the project and has financed its share of the drilling programme entirely from existing cash reserves, highlighting its strategy of expanding U.S. onshore operations without relying on external funding.
U.S. expansion strategy gathers pace
Progress at the Crossroads project represents another step in Union Jack’s broader plan to develop a diversified portfolio spanning both the UK and the United States. A successful drilling outcome could improve the company’s reserves base and future cash flow generation while strengthening its position among small-cap independent hydrocarbon producers focused on conventional oil and gas assets.
The investment also reflects management’s emphasis on disciplined capital allocation, with the company continuing to use internally generated funds to support development activity and growth opportunities.
Strong balance sheet offsets profitability concerns
Union Jack’s outlook continues to benefit from a debt-free balance sheet and a track record of profitability since 2022. However, these positives are tempered by a notable decline in profitability during 2024 alongside uneven and negative free cash flow performance.
Technical indicators point to solid short-term momentum, although some measures suggest overbought conditions and a weaker longer-term trend. Valuation metrics remain difficult to assess due to the company’s negative price-to-earnings ratio and the absence of a dividend yield.
More about Union Jack Oil
Union Jack Oil plc is an AIM-listed onshore oil and gas company focused on production, development, exploration and investment opportunities across the UK and United States. Trading under the ticker UJO, the company concentrates on conventional hydrocarbon projects and typically uses its own cash resources to acquire and develop material working interests in energy assets.
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