Union Jack Oil Plc (LON:UJO) is the topic of conversation when we caught up with Shore Capital Analyst Craig Howie.
Union Jack Oil has announced that operations have commenced on the Wressle 1 well to install a downhole jet pump, what effect will this have on production levels?
Such artificial lift techniques are very widely employed in the industry and we agree that a beneficial impact on production is very likely to be achieved in this case. Clearly, we will look forward to news of the flow rates being achieved following pump installation, and there will be an approximate three week hiatus in production in the shorter term. However, given the obvious scope to enhance deliverability, we are happy to leave our production forecasts unchanged ahead of further news.
How do you see this news?
In our opinion, news of the installation of a downhole pump at Wressle is very much a routine development which, following the recent confirmation of low levels of water cut in the well, has been on the agenda for some time we understand.
How do you see the company in terms of fair value?
Ahead of forthcoming publication of the new Wressle competent person’s report, which we hope will result in a reserves upgrade, we confidently maintain our Risked NAV estimate at 90p/share.
What newsflow do you hope to see over coming months?
In the shorter term, we will look forward to news of the flow rates being achieved following pump installation, followed by publication of the updated CPR on Wressle. Interim financial results can also be expected soon.
Union Jack Oil PLC is a UK-based onshore exploration and production company that focuses on acquiring, exploring, and developing oil and gas assets. The company has a portfolio of interests in various exploration and production licenses in the UK.
