UK Energy Security: London-listed Union Jack Oil (UJO) increases interest in Wressle ahead of…

UK Energy Security: London-listed Union Jack Oil (UJO) increases interest in Wressle ahead of production

London-listed Union Jack Oil (LON:UJO) announced this morning an increased economic interest in licences PEDL180 and PEDL182 of the Wressle hydrocarbon development project in Lincolnshire, bringing the company’s interest in the development to 40%. UJO is a main partner in the project, alongside operator Egdon Resources (LON:EDR), which owns a 30 percent interest, and Europa Oil & Gas (LON:EOG) with another 30 percent.

The joint venture has an estimated 500 bopd of gross initial production, of which 200bopd are net to UJO. The project has been considered financially robust, generating significant cash flow​ for UJO, as break-even full-cycle economics is estimated at an oil price of US$17.62 per barrel​. First oil is expected during H2 2020.

Operations at Wressle
Operations at Wressle

The licence for Wressle operations was granted based on the benefits it will bring to the local community. In his decision, government planning inspector Phillip Ware said to the BBC: “The proposal would deliver economic benefits and reduce the need for imported fuel. I give great weight to these and other benefits. In particular, the proposal would make a significant contribution towards the provision of secure energy supplies and be consistent with the use of a mix of energy sources during the transition to a low-carbon economy.”

Oil and gas provides more than 75 percent of the UK’s total primary energy, according to data from Oil and Gas UK, further noting that as oil and gas will still provide two-thirds of total primary by 2035, it therefore needs to be seen as a vital component of an energy policy.

In 2019, the UK recorded a 10% increase in electricity imports to meet its energy demand last year, said a report from energy market analysis firm EnAppSys. The energy industries’ contribution to the UK economy in 2018 were 3.2% of GDP, nearly 10% of total investment and 32.6% of industrial investment. Of the energy total in 2018, oil and gas extraction accounted for 34%, up 4.2 percentage points on the previous year​.

The oil market has slowly gathered momentum in May. Oil prices have rebounded in the recent weeks, recovering from the lows of April amid optimism about economic activity pick-up after easing of lockdown measures and OPEC+ reaching supply cut agreements.

Data from Bloomberg (07/06/2020)

Listen here interview with Union Jack Oil Business Development, Zac Phillips

About Wressle Development project and UJO

Located in Lincolnshire, Wressle is one of Union Jack’s three flagship assets, along with West Newton and Biscathorpe, which are part of the company’s strategy to focus on major projects to deliver growth in reserves, production and asset value.

The oil produced at Wressle would also help offset international oil imports typically shipped over long distances, as the oil produced would be refined nearby in Immingham, keeping trucking and transportation to a minimum, reducing the carbon footprint and greenhouse gas emissions.

Beyond providing benefits on energy supply, Wressle development will bring economic benefits to the region, with a boost in employment and opportunities for the community. Wressle plays a part in the Economic Growth Plan for North Lincolnshire, which champions the growth of the Humber chemical and energy cluster that currently contributes around £6 billion to the UK economy.

Local industries include petrochemicals, commodity and speciality chemicals, composite materials, pigments and paints, wind turbines and pharmaceuticals, and a raft of other associated industries employing circa 15,000 people in at least 120 companies. Petroleum remains fundamental to these locally significant industries, including in the manufacture of items such as wind turbines for the renewable energy sector which rely upon composite materials involving petroleum products, as do many industrial applications.

Union Jack’s other assets have also been generating positive news. West Newton in East Yorkshire covers 176,000 acres and could represent the largest UK onshore oilfield discovery in decades, after revealing a significant liquid and gas development opportunity with two hydrocarbon discoveries. Following approval from the Environmental Agency, well testing has commenced at West Newton A-2 and work is already in progress at West Newton B-1 drill site.

Biscarthorpe has a break-even full cycle estimated at US$18.07 per barrel of oil, and the company management believes that Biscathorpe remains one of the largest conventional un-appraised onshore hydrocarbon prospects in the UK.

Be sure to follow us on social media @cassiopeia_ltd to keep up with more news and updates in this exciting sector, and don’t forget to subscribe to our podcast channel and YouTube video channel for further upcoming interviews.

Investment Opportunities in the North Sea, Investors Eye Independent Oil & Gas

“I believe there’s still a great deal of opportunities to be exploited in the North Sea”, says Independent Oil & Gas, CEO Andrew Hockey. Combining a good portfolio of assets, the right partners with a favorable outlook for oil & gas investment, the AIM-listed oil & gas producer and developer looks forward to future plans.

In the latest episode of the Financial Fox, presenter & oil/gas strategist Stefania Barbaglio spoke to Andrew Hockey. The company have been going through an exciting period over the last three months having established a partnership with CalEnergy Resources (CER), to develop IOG’s Core Project and the recent spud of the Harvey Appraisal Well, in the North Sea.

CalEnergy are not only an active oil & gas operating company but the subsidiary of Berkshire Hathaway whose founder is the famous American business magnate Mr. Warren Buffett. Andrew Hockey hailed the partnership with CER as a “landmark transaction” for IOG, which he said would “deliver very significant value” for shareholders.

Independent has a strong focus on UK assets, particularly in the Southern North Sea, which encompasses gas assets containing reserves, contingent resources and prospective resources, able to deliver over 600 billion cubic feet of gas.

The portfolio is designed to take IOG from small to mid-cap company status. With the UK importing more than half of its gas, Hockey believes the domestic market represents an attractive opportunity for them.

Rising United Kingdom Oil & Gas Investment

There have been relatively few farm-out deals in the North Sea since the downturn in the oil market in 2014. But now, this trend seems to be turning upwards. The recently signed partnership with CalEnergy is one of two farm-out deals in the North Sea, showing good prospects for natural resources investment in the area.

In 2018, oil production rose to 1.09 million barrels (bbls) per day, an increase of 8.9% from 2017 and the highest UK oil production rate since 2011, according to the UK Oil & Gas Authority. The 2018 production covered 59 percent of the country’s oil and gas demands.

In 2019, UK oil and gas upstream investment is expected to witness a projected 4% increase. Reflecting this increase, this year, O&G exploration in the UK could see drilling of up to 15 new wells, says the 2019 business outlook from Oil and Gas UK.

Sentiment is increasingly positive in other parts of the world, which could signal a boost in the natural resources space. Oil analysts in the US are confident that we may be close to another oil boom over the coming years. “Investors would be wiser to purchase oil assets at a discount in anticipation of a medium-term price boom,” said Bob McNally, president of consulting firm Rapidan Energy Group on CNN Business.

The gas share of the sector also shows positive prospects for investors. Gas production in the UK in 2018 totaled 40.6 billion cubic metres, which maintains the UK’s status as a major gas producing country. Overall in Europe, second behind Norway, where the majority of UK gas imports come from.

In 2018, natural gas represented nearly 40% of UK’s primary energy usage, growing from the previous year. A factor that has increased gas demand is the continued shutting down of coal plants, resulting in a greater reliance on gas for electricity and LNG terminals.

The North Sea opportunity: Harvey Appraisal Well

UK production in the North Sea had a profitable period in the 1980s and 90s. Highest annual production peaked in 1999.

More recently the North Sea continental shelf has become a mix of energy resources, such as fossil fuels, wind and developments in wave power. The UK, along with Norway, are the largest holders of oil reserves in their respective licences.

IOG’s most exciting prospect is the Harvey Appraisal well, located at the heart of their core asset base in the Southern North Sea, with more than a 60% chance of success, results should be known in two months. Harvey has the potential to be the largest gas discovery in the company portfolio and could significantly enhance the economics of IOG’s Southern North Sea business.

About the advantages of exploring in the North Sea, Hockey says, ‘As an area of the North Sea, the Southern North Sea is probably the most benign to operate in. Water depths are relatively shallow therefore decommissioning liabilities are relatively low. You can use jack-up rigs so it’s fairly simple to operate. You are not far from shore. So, you have many things in your favor in terms of minimizing the execution risk of actually getting things done at the Southern gas place.”

Hockey believes that the Harvey well could deliver 85–199 bcf of gas for IOG: “Harvey could be a major catalyst for the business.”

Follow us on @Cassiopeia_ltd and @_FinancialFox for more smart investment tips to come. Stay tuned!

Investment Opportunities in the North Sea, Investors Eye Independent Oil & Gas

“I believe there’s still a great deal of opportunities to be exploited in the North Sea”, says Independent Oil & Gas, CEO Andrew Hockey. Combining a good portfolio of assets, the right partners with a favorable outlook for oil & gas investment, the AIM-listed oil & gas producer and developer looks forward to future plans.

In the latest episode of the Financial Fox, presenter & oil/gas strategist Stefania Barbaglio spoke to Andrew Hockey. The company have been going through an exciting period over the last three months having established a partnership with CalEnergy Resources (CER), to develop IOG’s Core Project and the recent spud of the Harvey Appraisal Well, in the North Sea.

CalEnergy are not only an active oil & gas operating company but the subsidiary of Berkshire Hathaway whose founder is the famous American business magnate Mr. Warren Buffett. Andrew Hockey hailed the partnership with CER as a “landmark transaction” for IOG, which he said would “deliver very significant value” for shareholders.

Independent has a strong focus on UK assets, particularly in the Southern North Sea, which encompasses gas assets containing reserves, contingent resources and prospective resources, able to deliver over 600 billion cubic feet of gas.

The portfolio is designed to take IOG from small to mid-cap company status. With the UK importing more than half of its gas, Hockey believes the domestic market represents an attractive opportunity for them.

Rising United Kingdom Oil & Gas Investment

There have been relatively few farm-out deals in the North Sea since the downturn in the oil market in 2014. But now, this trend seems to be turning upwards. The recently signed partnership with CalEnergy is one of two farm-out deals in the North Sea, showing good prospects for natural resources investment in the area.

In 2018, oil production rose to 1.09 million barrels (bbls) per day, an increase of 8.9% from 2017 and the highest UK oil production rate since 2011, according to the UK Oil & Gas Authority. The 2018 production covered 59 percent of the country’s oil and gas demands.

In 2019, UK oil and gas upstream investment is expected to witness a projected 4% increase. Reflecting this increase, this year, O&G exploration in the UK could see drilling of up to 15 new wells, says the 2019 business outlook from Oil and Gas UK.

Sentiment is increasingly positive in other parts of the world, which could signal a boost in the natural resources space. Oil analysts in the US are confident that we may be close to another oil boom over the coming years. “Investors would be wiser to purchase oil assets at a discount in anticipation of a medium-term price boom,” said Bob McNally, president of consulting firm Rapidan Energy Group on CNN Business.

The gas share of the sector also shows positive prospects for investors. Gas production in the UK in 2018 totaled 40.6 billion cubic metres, which maintains the UK’s status as a major gas producing country. Overall in Europe, second behind Norway, where the majority of UK gas imports come from.

In 2018, natural gas represented nearly 40% of UK’s primary energy usage, growing from the previous year. A factor that has increased gas demand is the continued shutting down of coal plants, resulting in a greater reliance on gas for electricity and LNG terminals.

The North Sea opportunity: Harvey Appraisal Well

UK production in the North Sea had a profitable period in the 1980s and 90s. Highest annual production peaked in 1999.

More recently the North Sea continental shelf has become a mix of energy resources, such as fossil fuels, wind and developments in wave power. The UK, along with Norway, are the largest holders of oil reserves in their respective licences.

IOG’s most exciting prospect is the Harvey Appraisal well, located at the heart of their core asset base in the Southern North Sea, with more than a 60% chance of success, results should be known in two months. Harvey has the potential to be the largest gas discovery in the company portfolio and could significantly enhance the economics of IOG’s Southern North Sea business.

About the advantages of exploring in the North Sea, Hockey says, ‘As an area of the North Sea, the Southern North Sea is probably the most benign to operate in. Water depths are relatively shallow therefore decommissioning liabilities are relatively low. You can use jack-up rigs so it’s fairly simple to operate. You are not far from shore. So, you have many things in your favor in terms of minimizing the execution risk of actually getting things done at the Southern gas place.”

Hockey believes that the Harvey well could deliver 85–199 bcf of gas for IOG: “Harvey could be a major catalyst for the business.”

Follow us on @Cassiopeia_ltd and @_FinancialFox for more smart investment tips to come. Stay tuned!

Union Jack Oil eagerly awaits promising results from West Newton appraisal

The AIM-listed, small cap company Union Jack Oil (LON:UJO) released its 2018 financial results earlier this week, cheering up shareholders and showcasing promising prospects. In an exclusive interview with oil & gas PR guru Stefania Barbaglio, Union Jack Executive Chairman David Bramhill comments on UJO’s journey and its strategy to build a successful, sustainable, UK-focused onshore hydrocarbon production and development business.

He talked about UJO’s key projects and how they could dramatically change the future of the Company.

With the release of its results, Union Jack has established itself as one of the AIM-listed rising stars in the oil & gas sector. Beyond increasing the proven hydrocarbon reserves and prospective resources of its projects, UJO’s revenue has increased by 250%, standing currently with a cash balance in excess of £2.5million.

David is a very down-to-earth leader. Union Jack has a conservative, safe tried-and-tested approach to its strategy. In terms of financial results and funding for operations, David says: “We are prepared for new prospects.”

The Company is fully funded, debt-free and undertaking an exciting drilling campaign at West Newton 2 appraisal well in the licence PEDL183. PEDL183 is located onshore in the UK, and contains the West Newton A-1 gas discovery, operated by Rathlin Energy, where, according to a 2017 Deloitte CPR, there is in excess of 189 bcfe of 2C Contingent Resources within the Kirkham Abbey Shoal Gas formation, with considerable further potential prospective resource upside for oil within the deeper Cadeby Reef formation.

UJO’s encouraging results could eventually be magnified by the upcoming results of West Newton basin, one of the UK’s highest impact onshore projects. The well has more than a 70% probability of gas and oil outcome: success here could lead to the delivery of a major onshore gas development of which the value of the investment would be Company-changing and effectively transform Union Jack’s future.

“West Newton is a vast and recent discovery. Any results even smaller than the original projections can still be life-changing for Union Jack Oil and the shareholders. 189 bcf is a massive amount of gas,” highlights David Bramhill.

In addition to the West Newton well, UJO owns two other onshore assets in the UK: Wressle Discovery and Biscathorpe wells.

Operations on Wressle are on hold until the hearing for the company to obtain planning permission, which is set to take place later in the year. Commercial production at Wressle could transform UJO into a material cash-generating oil production company and provide net cash flows of circa US$3.5 million per annum in the current oil price environment.

Biscathorpe remains suspended for a potential future side-track once the Joint Venture Partners have received new sub-surface model integrating re-processed 3D seismic data.

Despite the disappointment on the first drilling attempt, Biscathorpe, in the opinion of Union Jack`s management, remains one of the UK’s largest onshore un-appraised conventional hydrocarbon prospects.

Commenting on Biscathorpe, David Bramhill comments: “Over a century ago, Henry Ward Beecher, the American social reformer and speaker quoted ‘One`s best success comes after one’s greatest disappointments’. Biscathorpe’s structure is more complicated than what we expected and this is the risk inherent with oil & gas operations.”

Now is the time to invest in oil companies:

Even though there has been a significant push towards clean energy to reduce carbon emissions, and sales of electric cars are increasing all over the world, giving the impression that fossil fuels are no longer a profitable market, market analysts believe that oil companies are a good bet for investors: they say it is too early to run away from oil and gas companies.

Oil analysts are confident that we may be close to another oil boom over the coming years. “Investors would be wiser to purchase oil assets at a discount in anticipation of a medium-term price boom,” said Bob McNally, president of consulting firm Rapidan Energy Group and a former energy advisor to President George W. Bush and to CNN Business.

While sales of electric cars are growing, electric vehicles still represent a small portion of total car sales; the majority of vehicles still run on fossil fuels. It is also important to note that fuel is not the only use for oil. Indeed, demand is up for petrochemicals used to create plastics, and the International Energy Agency estimates that petrochemicals will account for the biggest source of oil demand growth through to 2030.

As a result, because of underinvestment in those projects, oil supply may decrease, causing prices to go up and driving up oil stocks along the way.

“Energy investments now face unprecedented uncertainties, with shifts in markets, policies and technologies,” IEA Executive Director Fatih Birol said in a statement. “But the bottom line is that the world is not investing enough in traditional elements of supply to maintain today’s consumption patterns, nor is it investing enough in cleaner energy technologies to change course. Whichever way you look, we are storing up risks for the future.”

The tide seems to be changing, though: after three years of decline, investment in oil, gas and coal supplies went back up in 2018, signalling an interesting market move back towards fossil fuels.

Union Jack’s Chairman leaves his message to potential investors and those looking into Union Jack: “Investing is always risk. But if people choose to invest in Union Jack, they would be investing in quality projects. They would also be dealing with a very transparent company. We have a great technical team; I am very proud of my team.”

References:

Annual Report Year End 31 December 2018

UJO Investor Presentation

Come and talk to UJO chairman David Bramhill in person at an exclusive investor presentation. Union Jack Oil will be presenting at the next Cassiopeia Investor Symposium on June 27th in Central London. For more information, please email info@cassiopeia-ltd.com.

Union Jack Oil eagerly awaits promising results from West Newton appraisal

The AIM-listed, small cap company Union Jack Oil (LON:UJO) released its 2018 financial results earlier this week, cheering up shareholders and showcasing promising prospects. In an exclusive interview with oil & gas PR guru Stefania Barbaglio, Union Jack Executive Chairman David Bramhill comments on UJO’s journey and its strategy to build a successful, sustainable, UK-focused onshore hydrocarbon production and development business.

He talked about UJO’s key projects and how they could dramatically change the future of the Company.

With the release of its results, Union Jack has established itself as one of the AIM-listed rising stars in the oil & gas sector. Beyond increasing the proven hydrocarbon reserves and prospective resources of its projects, UJO’s revenue has increased by 250%, standing currently with a cash balance in excess of £2.5million.

David is a very down-to-earth leader. Union Jack has a conservative, safe tried-and-tested approach to its strategy. In terms of financial results and funding for operations, David says: “We are prepared for new prospects.”

The Company is fully funded, debt-free and undertaking an exciting drilling campaign at West Newton 2 appraisal well in the licence PEDL183. PEDL183 is located onshore in the UK, and contains the West Newton A-1 gas discovery, operated by Rathlin Energy, where, according to a 2017 Deloitte CPR, there is in excess of 189 bcfe of 2C Contingent Resources within the Kirkham Abbey Shoal Gas formation, with considerable further potential prospective resource upside for oil within the deeper Cadeby Reef formation.

UJO’s encouraging results could eventually be magnified by the upcoming results of West Newton basin, one of the UK’s highest impact onshore projects. The well has more than a 70% probability of gas and oil outcome: success here could lead to the delivery of a major onshore gas development of which the value of the investment would be Company-changing and effectively transform Union Jack’s future.

“West Newton is a vast and recent discovery. Any results even smaller than the original projections can still be life-changing for Union Jack Oil and the shareholders. 189 bcf is a massive amount of gas,” highlights David Bramhill.

In addition to the West Newton well, UJO owns two other onshore assets in the UK: Wressle Discovery and Biscathorpe wells.

Operations on Wressle are on hold until the hearing for the company to obtain planning permission, which is set to take place later in the year. Commercial production at Wressle could transform UJO into a material cash-generating oil production company and provide net cash flows of circa US$3.5 million per annum in the current oil price environment.

Biscathorpe remains suspended for a potential future side-track once the Joint Venture Partners have received new sub-surface model integrating re-processed 3D seismic data.

Despite the disappointment on the first drilling attempt, Biscathorpe, in the opinion of Union Jack`s management, remains one of the UK’s largest onshore un-appraised conventional hydrocarbon prospects.

Commenting on Biscathorpe, David Bramhill comments: “Over a century ago, Henry Ward Beecher, the American social reformer and speaker quoted ‘One`s best success comes after one’s greatest disappointments’. Biscathorpe’s structure is more complicated than what we expected and this is the risk inherent with oil & gas operations.”

Now is the time to invest in oil companies:

Even though there has been a significant push towards clean energy to reduce carbon emissions, and sales of electric cars are increasing all over the world, giving the impression that fossil fuels are no longer a profitable market, market analysts believe that oil companies are a good bet for investors: they say it is too early to run away from oil and gas companies.

Oil analysts are confident that we may be close to another oil boom over the coming years. “Investors would be wiser to purchase oil assets at a discount in anticipation of a medium-term price boom,” said Bob McNally, president of consulting firm Rapidan Energy Group and a former energy advisor to President George W. Bush and to CNN Business.

While sales of electric cars are growing, electric vehicles still represent a small portion of total car sales; the majority of vehicles still run on fossil fuels. It is also important to note that fuel is not the only use for oil. Indeed, demand is up for petrochemicals used to create plastics, and the International Energy Agency estimates that petrochemicals will account for the biggest source of oil demand growth through to 2030.

As a result, because of underinvestment in those projects, oil supply may decrease, causing prices to go up and driving up oil stocks along the way.

“Energy investments now face unprecedented uncertainties, with shifts in markets, policies and technologies,” IEA Executive Director Fatih Birol said in a statement. “But the bottom line is that the world is not investing enough in traditional elements of supply to maintain today’s consumption patterns, nor is it investing enough in cleaner energy technologies to change course. Whichever way you look, we are storing up risks for the future.”

The tide seems to be changing, though: after three years of decline, investment in oil, gas and coal supplies went back up in 2018, signalling an interesting market move back towards fossil fuels.

Union Jack’s Chairman leaves his message to potential investors and those looking into Union Jack: “Investing is always risk. But if people choose to invest in Union Jack, they would be investing in quality projects. They would also be dealing with a very transparent company. We have a great technical team; I am very proud of my team.”

References:

Annual Report Year End 31 December 2018

UJO Investor Presentation

Come and talk to UJO chairman David Bramhill in person at an exclusive investor presentation. Union Jack Oil will be presenting at the next Cassiopeia Investor Symposium on June 27th in Central London. For more information, please email info@cassiopeia-ltd.com.