Union Jack Oil reports solid progress on US investments

19th Aug 2024 11:37

(Sharecast News) - Union Jack Oil updated the market on its rapidly-expanding activities in the United States on Monday, with the successful discovery at the Andrews 2-17 well confirmed as commercial following completion and testing.

The AIM-traded firm said the well, along with the earlier Andrews 1-17 well, is part of its strategic expansion in the US, particularly in Oklahoma.

It said Andrews 1-17, which had been in test production since May, yielded 6,460 barrels of high-quality, ultra-light oil and 382,000 cubic feet of gas.

The newer Andrews 2-17 well had also shown promising results, producing 544 barrels of oil and nearly 1.9 million cubic feet of gas since it started test production in early August.

Both wells had been connected to a local gas pipeline, allowing Union Jack to begin selling the produced oil and gas to market.

In addition to those developments, Union Jack said it had acquired a 45% interest in the upcoming Taylor and Moccasin drilling projects, set to begin in the fourth quarter.

The wells were expected to target significant hydrocarbon reserves in Oklahoma's Hunton Limestone and other promising geological formations.

Union Jack said it was also advancing its Rogers secondary recovery project, which aimed to enhance oil recovery from legacy wells near the Andrews field.

The project was expected to yield an additional 124,000 barrels of oil, with the potential to generate around $7.5m in revenue.

It added that its strategic efforts in the US had been complemented by its recent dual listing on the OTCQB Venture Market, alongside its existing AIM listing in London.

The move was designed to broaden its investor base and increase liquidity, particularly among US investors.

"Obviously, I am delighted at the initial success and significant progress being made in the US alongside our partners, Reach," said Union Jack's executive chairman David Bramhill.

"It is difficult to believe that our entry into North America at the start of the year would yield such material returns in such a short period of time.

"The hydrocarbon opportunities in Oklahoma are considerable and we look forward to drilling the Taylor and Moccasin wells during the fourth quarter of 2024, followed by the Diana-1 well, all of which hold considerable upside on success."

Bramhill said he looked forward to reporting on further US progress in the half-yearly report, as well as on the company's UK assets, including the cash-generating Wressle project, West Newton, Biscathorpe, Keddington and North Kelsey.

"We remain committed to all of our current UK projects and are cautiously optimistic that fiscal and regulatory clarification from the new government will allow the owners and entrepreneurs in our industry to move forward and continue to provide reliable domestic production, supporting jobs and delivering tax revenues for many years to come."

At 1116 BST, shares in Union Jack Oil were up 1.11% at 18.2p.

Reporting by Josh White for Sharecast.com.