REG - Union Jack Oil PLC - Final Results for the Year Ended 31 December 2023
20/05/2024 07:00
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RNS Number : 0044P Union Jack Oil PLC 20 May 2024
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.
20 May 2024
Union Jack Oil plc
("Union Jack" or the "Company")
Final Results for the Year Ended 31 December 2023
Union Jack Oil plc (AIM: UJO) (OTCQB: UJOGF), a UK and USA focused onshore
hydrocarbon production, development, exploration and investment company, is
pleased to announce its audited results for the year ended 31 December 2023.
Operational Highlights
• Flagship Wressle project continues to deliver following a
workover, installation of a down hole pump and other significant site upgrades
• Wressle Competent Person's Report upgrades Reserves by 263%
• Application submitted for the drilling of two back-to-back
Wressle development wells and the Penistone Flags gas monetisation
• Positive Biscathorpe planning appeal decision
• Sale of 2.5% interest in offshore North Sea Claymore Area
Royalty
• Commencement of acquisition of United States Mineral Royalties
and drilling activity in Oklahoma
• Planned drilling and development during 2024 to encompass both
sides of the Atlantic
• Post Balance Sheet date, the Andrews 1-17 Well, in Oklahoma,
USA, has been declared a commercial discovery
Financial Highlights
• Gross profit of £3,298,844 (2022: £5,100,479)
• Net profit of £859,089 (2022: £3,606,624)
• Basic earnings per share 0.79 pence (2022: 3.20 pence)
• Oil revenues £5,065,679 (2022: £8,507,050)
• The Company continues to be debt free
• Post Balance Sheet date, a dividend of 0.25 pence per ordinary
share was declared, payable on 26 July 2024
David Bramhill, Executive Chairman, commented:
"The Board's confidence has once again been supported by the Company's solid
2023 financial results, confirming its resilience, both financially and
operationally.
"In the UK, Union Jack will remain focused on the development of its flagship
project, Wressle, where the Operator and joint venture partners have ambitious
near-term appraisal and development programmes planned. The Board is of the
opinion that, within the Wressle development, there remains significant
material upside which will support the Company with revenues for at least
another decade.
"I also look forward to progress at West Newton. Encouragingly, the results
from this key project to date signal a potentially highly valuable onshore
project with resources comparable to those usually reported offshore. A
significant onshore domestic gas resource, as indicated at West Newton, has
the potential to become an important transition fuel in helping the UK achieve
its 2050 Net Zero target.
"Union Jack's initial successes in the USA, in just a few months, highlight
the ease of entry and ability to execute business in that country, justifying
the Board's decision to seek further growth opportunities internationally to
bolster its flagship production and appraisal assets in the United Kingdom.
"Following the Company's USA entry, involving both the Andrews 1-17 discovery
well and the financial attractions of Union Jack's expanding Mineral Royalties
portfolio, I believe that the Board's optimism and our further expansion in
the USA, executed alongside a proactive drilling campaign, will deliver
material rewards in due course.
"Our appetite for additional growth opportunities has been whetted by our
recent positive experience in the USA and discussions are at an advanced stage
with Reach in respect of materially expanding our activities over the coming
months and beyond.
"I am confident that the significant increase in drilling, appraisal and
development activity now planned in the pursuit of growth from our balanced UK
and USA portfolios has the potential for significant value creation for
shareholders. We believe our heightened activity and the expected additional
news-flow generated, combined with effective investor engagement on both sides
of the Atlantic, will continue to attract the ongoing support of our existing
shareholders and the attention of new investors, broadening the appeal of the
Company to a wider audience.
"Overall, Union Jack is in sound financial health with a robust Balance Sheet
and continues to be debt free.
"The future of Union Jack remains bright."
For further information, please contact
Union Jack Oil plc info@unionjackoil.com
David Bramhill
SP Angel Corporate Finance LLP +44 (0)20 3470 0470
Nominated Adviser and Joint Broker
Matthew Johnson
Richard Hail
Kasia Brzozowska
Shore Capital +44 (0)20 7408 4090
Joint Broker
Toby Gibbs
Harry Davies-Ball
Gneiss Energy Limited +44 (0)20 3826 4799
Financial Adviser
Jon Fitzpatrick
Paul Weidman
Harbor Access +1 (475) 477 9402
USA Investor Relations
Jonathan Paterson
Tommy Zima
BlytheRay +44 (0)20 7138 3204
Financial Public Relations
Tim Blythe
Megan Ray
In accordance with the AIM Rules - Note for Mining and Oil and Gas Companies,
the information contained within this announcement has been reviewed and
signed off by Graham Bull, Non-Executive Director, who has over 47 years of
international oil and gas industry exploration experience. This announcement
contains certain forward-looking statements that are subject to the usual risk
factors and uncertainties associated with the oil and gas exploration and
production business. While the directors believe the expectations reflected
within this announcement to be reasonable in light of the information
available up to the time of approval of this announcement, the actual outcome
may be materially different owing to factors either beyond the Company's
control or otherwise within the Company's control, for example, owing to a
change of plan or strategy. Accordingly, no reliance may be placed on the
forward-looking statements.
Evaluation of hydrocarbon volumes has been assessed in accordance with 2018
Petroleum Resources Management System (PRMS) prepared by the Oil and Gas
Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed
and jointly sponsored by the World Petroleum Council (WPC), the American
Association of Petroleum Geologists (AAPG), the Society of Petroleum
Evaluation Engineers (SPEE), the Society of Exploration Geophysicists (SEG),
the Society of Petrophysicists and Well Log Analysts (SPWLA) and the European
Association of Geoscientists & Engineers (EAGE).
CHAIRMAN'S STATEMENT
I am delighted to present to the shareholders of Union Jack Oil plc ("Union
Jack" or the "Company"), the Annual Report and Financial Statements for the
year ended 31 December 2023.
Progress continued throughout the period, thanks to the cash flow from our
flagship development, Wressle, where revenues continued to bolster the
Company's robust Balance Sheet and enabled Union Jack to announce a net profit
for the second consecutive year.
Union Jack remained profitable, despite lower oil prices and weaker exchange
rates compared to 2022, as well as a near three-month shutdown at Wressle,
whilst a downhole pump was installed and other significant site upgrades were
carried out. This demonstrates the durability and dependability of the
Company's key project and the prudent management of our cash resources.
The ERC Equipoise Limited ("ERCE") Competent Person's Report ("CPR") in
respect of Wressle and Broughton North, matched our high expectations,
demonstrating a 263% increase in 2P Reserves to 2,373 mboe gross. This adds
significant additional value to what is a material project within Union Jack's
production and development portfolio within the UK.
We are expecting West Newton, another key onshore project within Union Jack's
portfolio, with impressive Contingent Resources reported within the RPS Group
Limited ("RPS") CPR, to see activity during the remainder of 2024 and beyond.
In 2023, a decision was made to seek further growth opportunities in other
jurisdictions, where operations can be executed unhindered and a sensible and
fair tax policy is applied. During the latter part of 2023, Union Jack
commenced discussions with Reach Oil & Gas Company Inc ("Reach"), based in
Oklahoma, United States of America ("USA"). As a result, Union Jack began
assembling a quality Mineral Royalty portfolio providing a material monthly
income.
Union Jack has also entered into a number of agreements with Reach in respect
of drilling and seismic acquisition in Oklahoma.
The first well drilled on the West Bowlegs Prospect in Oklahoma, the Andrews
1-17, in which the Company holds a 45% working interest, is a commercial
discovery, penetrating the primary objective, the Hunton Limestone, one of the
main hydrocarbon reservoirs in Oklahoma. The well has now been put on
production and in light of this successful outcome, a further step-out
drilling programme within associated areas is now being discussed between the
joint venture partners.
A further well in Oklahoma, over and above the Hunton drilling campaign is
expected to be drilled during Q3 2024, testing the Footwall Fold Prospect in
the Wilzetta Fault play. This well, the Diana-1, is considered to be
high-impact for Union Jack, where the rewards can be significant. The prolific
fault plays are the site of numerous oilfields across Central Oklahoma with
nearby analogous production. The Diana-1 well is supported by recently
reprocessed 3D seismic data.
In addition, several potential drilling sites have been identified along the
Wilzetta Fault and a 3D seismic acquisition programme is planned during 2024.
Reach's state-of-the-art equipment, supplied by UK based Stryde Limited,
allows for cost effective and efficient seismic acquisition.
Following the early successes of the Company's entry into the USA involving
the Andrews 1-17 discovery well and the financial attractions of Union Jack's
expanding Mineral Royalties portfolio, the Board believes that the Company's
further expansion into the USA, executed alongside a dynamic drilling
campaign, will deliver material rewards in due course.
To increase the Company's corporate visibility in the USA, in April 2024, a
quote was obtained for Union Jack's ordinary shares on the OTCQB Venture
Market (Ticker: UJOGF). The Board believes that dual trading of the Company's
shares on AIM and the OTCQB will provide enhanced investor benefits, which
includes easy trading access for investors based in the USA and increased
liquidity, due to a broader geographic pool of potential investors.
Ray Godson, non-executive director since the inception of the Company, will
step down at the Company's upcoming Annual General Meeting. To prepare for
this, the Company appointed Craig Howie in April 2024, who will assume Ray's
role as Chairman of the Audit Committee and member of the Remuneration
Committee. Craig is well versed in energy, finance and the business of Union
Jack.
Additional information on the Company's leading projects within the UK at
Wressle and West Newton, and overviews on Biscathorpe, Keddington and North
Kelsey, can be found later within this statement.
The financial results for 2023 are positive with the Company remaining in a
strong position, free of debt, with a balanced work programme of potentially
transformational development and drilling activities encompassing both sides
of the Atlantic.
In view of the Company's sound financial position, and the additional income
received since the year end from the Mineral Royalties, the Board, on 14 May
2024, declared a 0.25 pence dividend per ordinary share to be paid to
qualifying shareholders on Friday 26 July 2024.
Further information can be found on the Company's website
www.unionjackoil.com, presenting detailed technical information on Union
Jack's projects and designed to inform shareholders and attract new investors
to the Company.
In addition, Union Jack hosts a growing and active X (formerly Twitter)
account @unionjackoilplc.
WRESSLE DEVELOPMENT
PEDL180 AND PEDL182 (40%)
Wressle is located in Lincolnshire, on the western margin of the Humber Basin.
The Wressle-1 ("Wressle") discovery was defined on proprietary 3D seismic
data. The structure is on trend with the Crosby Warren oilfield and the
Broughton North Prospect, both located to the immediate northwest and the
Brigg-1 discovery to the southeast. These wells contain hydrocarbons in
several different sandstone reservoirs within the Upper Carboniferous
succession. The majority of the Broughton North Prospect is covered by the
same 3D seismic survey to that of the Wressle field.
Since the proppant squeeze and coiled tubing operations conducted during
August 2021, Wressle has established itself as Union Jack's flagship project
with initial production rates far exceeding original expectations. Wressle has
generated revenues in excess of US$19,000,000 net to Union Jack before taxes,
allowing the Company to be self-sustaining for almost three years without
recourse to external funding from the capital markets. To date, nearly 600,000
barrels of high-quality oil have been produced and sold from Wressle.
Production during 2023, ranged from 500 to 800 barrels of oil per day,
accompanied by a water cut which is easily managed and disposed of at a nearby
facility.
During December 2023, the joint venture partnership received the results of a
CPR compiled by ERCE for Wressle and Broughton North Prospect.
The highlights of this report are as follows:
• 263% increase in 2P Reserves
• Reclassification of 1,883 million barrels of oil equivalent ("mboe")
in Penistone Flags Contingent Resources to 2P Reserves
• 59% upgrade to the Ashover Grit and Wingfield Flags Estimated
Ultimate Recoverable
• 23% upgrade to Broughton North Prospective 2U Resources
Wressle Gross Oil and Gas Reserves (mboe)
Category Gross Reserves
1P 2P 3P
2016 CPR 303 655 1,356
Added - - -
Produced to (519) (519) (519)
30 June 2023
Revisions 258 354 403
Reclassified 864 1,883 3,647
2023 CPR 906 2,373 4,887
Reserves Change 199% 263% 261%
Note: One barrel of oil equivalent ("boe") is equal to 5,714 standard cubic
foot ("scf") of natural gas
Broughton North Gross Oil and Gas Prospective Resources (mboe)
Category Gross Unrisked Prospective Resources
1U 2U 3U
2016 CPR 180 494 1,156
Added - - -
Produced to - - -
30 June 2023
Revisions 33 114 376
Reclassified - - -
2023 CPR 213 608 1,532
A planning application for the drilling of back-to-back (Wressle-2 and
Wressle-3) wells and an upgrade of production facilities, including fluid
storage tanks, separator system, surface pump and associated bunds, was
submitted by the Operator on behalf of the joint venture partnership to the
North Lincolnshire Council for approval, during February 2024.
In addition, a planning application has been submitted to enable the
production of the material gas reserve contained within the Penistone Flags
formation. Gas processing equipment will be sourced and a 600 metre
underground gas pipeline will be installed, linking Wressle to the national
gas grid.
These applications were finalised following the compilation of a raft of
technical assessments including noise and vibration, landscape and visual,
ecological, lighting, transport, flood and hydrogeological risk, to name some
of the aspects considered.
The Board believes that the Company holds a material interest in Wressle that
will continue to deliver significant revenues for at least the next decade.
The Board looks forward to the remainder of 2024 and beyond with enthusiasm,
where the Company expects to crystalise the additional value of this primary
operation.
WEST NEWTON DEVELOPMENT
PEDL183 (16.665%)
PEDL183 is located onshore UK, north of the River Humber, encompassing the
town of Beverley, East Yorkshire. The licence area is within the western
sector of the Southern Zechstein Basin.
Union Jack entered into a farm-in during 2018 with Rathlin Energy (UK) Limited
("Rathlin") as the Operator, and since that time the West Newton A-2 ("WNA-2")
and West Newton B-1Z ("WNB-1Z") drilling programmes have yielded substantial
hydrocarbon discoveries within the Kirkham Abbey formation.
The table below notes the West Newton gross unrisked technically recoverable
sales volumes as calculated by independent engineers RPS Group Limited ("RPS")
in late 2022.
Category Gross Technically Recoverable
Gas (bcf) Liquids (mbbl)
1C 99.7 299.4
2C 197.6 593.0
3C 393.0 1,178.9
Throughout 2022 and 2023, data collected during drilling operations and well
testing, which included core, oil and gas samples, wireline log and well test
records, were analysed by independent laboratories CoreLab, Applied Petroleum
Technology ("APT") and RPS. The results of these analyses, in conjunction with
internal evaluations, have been invaluable in informing the upcoming programme
of work and future drilling plans.
Laboratory reports confirm that the hydrocarbon-bearing Kirkham Abbey
reservoir is extremely sensitive to aqueous fluids and that previous drilling
of the West Newton wells with water-based mud had created near well-bore
damage through the creation of very fine rock fragments, affecting the natural
porosity and permeability of the formation, which in turn had a detrimental
effect on its ability to flow. Further analyses have concluded that the use of
dilute water-based acids during well testing would have also affected the flow
characteristics of the Kirkham Abbey reservoir.
These tests indicate that by drilling the Kirkham Abbey reservoir with an
oil-based drilling fluid, damage to the oil and gas reservoir should be
minimised.
A feasibility study is being undertaken by independent energy consultants CNG
Services Limited on a single well development and gas export plan. The scope
of the West Newton feasibility study is to determine the technical and
economic viability of a single well development, with production processed
from a modular plant and a 3.5 kilometre pipeline from the WNA site to the
National Transmission System at an existing above-ground installation.
Commercial gas production could be brought to market within months of a
successful production test, resulting in a materially reduced capital
investment which provides significant early cash flow whilst additional
activity is carried out on the further development of the West Newton project.
GaffneyCline Associates, an international petroleum consultancy, is currently
compiling a Carbon Intensity Study in respect of the gas resource at West
Newton. Union Jack believes that, in these environmentally aware times,
investors will only wish to commit investments in companies and projects that
support a transition to a low-carbon economy. As part of our ongoing strategy
in respect of the environment going forward, we commit to be totally
transparent in respect of our projects and on how our Carbon Management
Practice is implemented.
The joint venture partners continue to plan the most efficient and economic
method to convert the impressive West Newton Contingent Resource into a viable
hydrocarbon development within an acceptable time frame.
A future West Newton development will benefit from being located in an area
that provides access to substantial local infrastructure and could deliver
significant volumes of onshore low carbon sales gas into the UK's energy
market.
KEDDINGTON
PEDL005(R) (55%)
The Keddington oilfield is located along the highly prospective East Barkwith
Ridge, an east-west structural high on the southern margin of the Humber
Basin.
A technical review by the Operator has confirmed that there remains an
undrained oil resource located on the eastern side of the Keddington field.
Planning consent for further drilling is already in place, presenting an
opportunity to increase production via a development side-track from one of
the existing wells.
To facilitate confirmation of the target definition and well design planning,
re-processing of legacy 3D seismic data has been completed.
Modelling indicates that infill drilling is forecast to improve recovery from
the Keddington field by between 113,000 to 183,000 barrels of oil, depending
on the reservoir permeability model selected and the combination of infill
targets.
The sub-surface location of a step-out well has been finalised and it is
planned to drill the well, where planning consent is already granted, when the
Operator deems appropriate.
There are plans to upgrade the production equipment at Keddington during 2024,
the result of which is expected to increase efficiency and production rates.
BISCATHORPE
PEDL253 (45%)
PEDL253 is situated within the proven hydrocarbon fairway of the South Humber
Basin and is on-trend with the Keddington oilfield and the Saltfleetby
gasfield.
While drilling the Biscathorpe-2 well, there were hydrocarbon shows, elevated
gas readings and sample fluorescence observed over the entire interval from
the top of the Dinantian to the total depth of the well, with 68 metres being
interpreted as being oil-bearing.
Independent consultants APT also conducted analyses, confirming a hydrocarbon
column of 33-34 API gravity oil, comparable with the oil produced at the
nearby Keddington oilfield.
Further evaluation of the results of the Biscathorpe-2 well, together with the
reprocessing of 264 square kilometres of 3D seismic, indicate a potentially
material and commercial hydrocarbon resource that remains to be appraised.
A side-track well is planned, targeting the Dinantian Carbonate where the
Operator has assessed, in accordance with the PRMS Standard, a gross Mean
Prospective Resource of 2.55 mmbbl. The overlying Basal Westphalian Sandstone
has the potential to add gross Mean Prospective Resources of 3.95 mmbbl.
Economic modelling demonstrates that the Westphalian target is economically
robust, especially in the current oil price environment. Commercial screening
indicates break-even full cycle economics to be US$18.07 per barrel.
During November 2023, the Planning Inspectorate upheld the appeal against the
refusal of planning permission by Lincolnshire County Council for a side-track
drilling operation, associated testing and long-term oil production at the
Biscathorpe-2 wellsite.
Union Jack's technical team believe that Biscathorpe remains one of the
largest unappraised conventional onshore discoveries within the UK.
NORTH KELSEY
PEDL241 (50%)
North Kelsey is a conventional oil exploration prospect on trend with, and
analogous to, the Wressle oilfield which lies approximately 15 kilometres to
the northwest. The prospect has been mapped from 3D seismic data and has the
potential for oil in four stacked Upper Carboniferous reservoir targets.
The Operator estimates that gross Prospective Resources range from 4.66 (P90)
to 8.47 (P10) mmbbl.
The Operator has submitted an appeal on behalf of the Joint Venture, against
the refusal of an extension of time to the existing planning permission by
Lincolnshire County Council to enable the drilling and testing of a
conventional exploration well at the North Kelsey site.
OTHER LICENCE INTERESTS
Union Jack has interests in a number of other non-core projects, namely
PEDL118 (Dukes Wood), PEDL203 (Kirklington), PEDL201 (Widmerpool Gulf) and
PEDL209 (Laughton).
These licence interests have all been fully impaired and are at various stages
of relinquishment with the exception of Dukes Wood where the geothermal upside
potential is being investigated.
Fiskerton Airfield (EXL294) is currently shut in. Longer term potential for
the site is to manage produced water through the existing water injection well
on site and also for potential geothermal repurposing.
During the year, PEDL181 was relinquished at no cost to the company.
UNITED STATES OF AMERICA STRATEGIC GROWTH AND EXPANSION PLAN
During December 2023, for numerous reasons, including the punitive Energy
Profit Levy of 35% imposed on profits generated within the UK, the Board
commenced the execution of a plan to seek growth opportunities in regimes with
sympathetic views towards the hydrocarbon industry, without compromising
global environmental objectives and the aim of achieving net zero by 2050.
To this end, Union Jack has, in just the period of a few months, assembled an
attractive and growing portfolio of cash generating Mineral Royalties, located
in the Permian Basin and Eagle Ford Shale, Texas and Bakken Shale, North
Dakota, USA. These are operated by major producers.
The Company has entered into farm-in agreements with Reach to drill two wells,
one of which, the Andrews 1-17, has already been drilled and declared a
commercial discovery. The other well, the Diana-1, designed to test a Wilzetta
Fault play, will be drilled during Q3 2024.
A further agreement was signed to conduct a 3D seismic survey over certain
areas of the Wilzetta Fault, in Oklahoma, one of the largest hydrocarbon
producing states in the USA.
Union Jack's strategic partnership with Reach offers the opportunity to access
a wider inventory of drill-ready prospects in Oklahoma.
As a result of the initial success of Andrews 1-17, a follow-up well location
is currently in the planning phase in readiness for early drilling.
MINERAL ROYALTIES
During late 2023 and early 2024, Union Jack acquired six quality Mineral
Royalty packages, all brokered by the Company's Oklahoma based agent and
adviser, Reach.
The attractions of USA Mineral Royalties include:
• Exposure to active and productive basins and some of the largest
operators in the USA
• Monthly income with no development or operating costs
• Owned in perpetuity, with no forward liabilities or obligations
• Royalties are estimated to have a long economic life, in some cases
more than 26 years and an Internal Rate of Return in excess of 20%
The Mineral Royalties portfolio assembled to date is summarised below:
• Cronus Unit, containing a 25 well package in the Permian Basin,
Midland County, Texas, (effective date December 2023); the property is
comprised of nine Chevron and 16 XTO (a subsidiary of Exxon) operated wells
• COG Operating LLC (a subsidiary of ConocoPhillips) operated Powell
Ranch Unit, consisting of 15 wells in the Permian Basin, Upton County, Texas
(effective date November 2023); the property is comprised of seven horizontal
and eight vertical wells
• Occidental operated Palm Springs Unit, containing 10 horizontal
wells in the Permian Basin, Howard County, Texas (effective date January 2024)
• Bakken Shale, a diversified 96 well interest package, located in
Dunn, McKenzie and Williams Counties, North Dakota. Quality Operators include
Burlington Resources, Continental and Hess (effective date March 2024)
• Permian Basin, an eight well producing unit, located in Howard and
Borden Counties, Texas. Operated by Vital Energy Inc, a quoted, Permian Basin
focused entity, based in Tulsa, Oklahoma (effective date March 2024)
• Eagle Ford Shale, a nine producing horizontal well package, located
in DeWitt County, Texas, operated by ROCC Operating (effective date March
2024)
The Mineral Royalties also provide additional upside as new wells are
completed and drilled on the properties at no cost to Union Jack. Chevron, one
of the operators, has publicly stated their commitment to expanding activities
in the Permian Basin.
The operators associated with the Royalties are all major producers, ranking
highly in the S&P Global (formerly Standard & Poor's), Fitch, and
Moody credit ratings.
The Company's intent is to expand its Mineral Royalty portfolio as and when
appropriate acquisition opportunities arise.
WEST BOWLEGS PROSPECT AND ANDREWS 1-17 WELL OKLAHOMA (45%)
During January 2024, the Company signed a farm-in agreement with Reach, to
acquire a 45% interest in the West Bowlegs Prospect, located in Seminole
County, Oklahoma, where the Andrews 1-17 well was subsequently spudded in late
March 2024, and drilled to a depth of 4,600 feet.
The primary objective for the Andrews 1-17 well was the Hunton Limestone, a
prolific, producing hydrocarbon reservoir in Oklahoma. The Hunton Limestone is
unconformably overlain by the main oil-prone source rock, the Woodford Shale,
and is in an excellent position for the migration of oil.
The Andrews 1-17 well confirmed the presence of the main objective, the Hunton
Limestone, showing high porosity with elevated gas readings, with good
reservoir qualities being interpreted on the wireline logs.
The well was completed and placed on production and is currently cleaning up.
Oil produced has been sold and permanent oil and gas production facilities are
being assembled on site. I look forward to commenting further on productivity
in due course.
Reach and its drilling team conducted activities with precision, below budget
and, of key importance, safely and incident free.
The West Bowlegs drilling met our criteria of acquiring material interests in
near-term drilling projects and being capable of quickly adding cash-flow.
The Company's first drilling venture in the USA is a commercial success and an
excellent start for Union Jack in its initial enterprise with Reach.
WILZETTA FAULT PLAY AND DRILLING IN OKLAHOMA (75%)
During February 2024, the Company signed a farm-in agreement with Reach to
acquire a 75% interest in a high-impact well, Diana-1, planned to be drilled
in Q3 2024, to test the Footwall Fold Prospect in the Wilzetta Fault play, a
proven oil producing location and in an area of associated interest.
The prolific Wilzetta Fault plays are the sites of numerous oilfields across
Central Oklahoma which include:
• North-East Shawnee field, three miles south of the Prospect, which
has produced more than 5,800,000 barrels of oil to date
• West Bellmont field, adjacent to the Prospect, which has produced
more than 580,000 barrels of oil to date
• Arlington Field, ten miles north-east of the Prospect, which has
produced more than 1,800,000 barrels of oil to date
Typical wells drilled in the Wilzetta Fault can produce approximately 250
barrels of oil per day providing pay-back within three months.
The initial Wilzetta well will be drilled to a depth of 6,000 feet where the
prospect integrity is supported by recently reprocessed 3D seismic data.
CORPORATE AND FINANCIAL
The 12-month period under review, even with a reduced oil price and an adverse
exchange rate has, for the second consecutive year, seen Union Jack remain a
cash generating and profitable entity. The Company retains a strong Balance
Sheet and a clear focus on the development of its flagship assets both in the
UK and the opportunity charged USA, where a balanced portfolio of Mineral
Royalties along with production and exploration assets has already been
assembled.
The expectation that Union Jack's USA ventures, guided by both Reach's and
Union Jack's very able technical teams, have already been confirmed by the
success of the Andrews 1-17 discovery.
Ray Godson has made the decision to step down from the Board of Union Jack at
the forthcoming AGM. Ray, since the conception of the Company, has been an
exemplary director and we all wish Ray an enjoyable retirement. Craig Howie
has joined the team at Union Jack as an independent non-executive director.
Craig, appointed on 22 April 2024, has over 20 years of City and advisory
experience, especially within the oil industry and is well known within his
peer group in respect of his knowledge of oil enterprises, both junior and
major. The Board of Union Jack look forward to working with Craig and welcome
him to the team.
Revenues from oil sales of £5,065,679 (2022: £8,507,050) reported for the
period continued to have had a positive effect on the Income Statement,
resulting in the Company being able to report a gross profit of £3,298,844
(2022: £5,100,479), and net profit of £859,089 (2022: £3,606,624).
Basic Earnings per share of 0.79 pence were reported (2022: 3.2 pence).
Since the commencement of our dividend policy and share buy-back programme,
approximately £3,000,000 has been returned to shareholders.
The Company retains its policy of returning cash to shareholders when deemed
appropriate, taking into consideration its financial requirements going
forward.
In view of our sound financial position and the additional income received
since the year end from the Mineral Royalties, on 14 May 2024 the Board
declared a dividend of 0.25 pence per ordinary share to be paid to qualifying
shareholders on Friday 26 July 2024.
The Company holds 6,300,000 ordinary shares in Treasury which increase the
Earnings Per Share, hold no voting rights and are not entitled to a dividend
payment.
I take this opportunity to thank our shareholders for their continued support,
as well as my co-directors and advisers, all of whom continue to contribute
towards the development and growth of the Company.
OUTLOOK
The Board's confidence has once again been supported by the Company's solid
2023 financial results, confirming its resilience, both financially and
operationally.
In the UK, Union Jack will remain focused on the development of its flagship
project, Wressle, where the Operator and joint venture partners have ambitious
near-term appraisal and development programmes planned. The Board is of the
opinion that, within the Wressle development, there remains significant
material upside which will support the Company with revenues for at least
another decade.
I also look forward to progress at West Newton. Encouragingly, the results
from this key project to date signal a potentially highly valuable onshore
project with resources comparable to those usually reported offshore. A
significant onshore domestic gas resource, as indicated at West Newton, has
the potential to become an important transition fuel in helping the UK achieve
its 2050 Net Zero target.
Union Jack's initial successes in the USA, in just a few months, highlight the
ease of entry and ability to execute business in that country, justifying the
Board's decision to seek further growth opportunities internationally to
bolster its flagship production and appraisal assets in the United Kingdom.
Following the Company's USA entry, involving both the Andrews 1-17 discovery
well and the financial attractions of Union Jack's expanding Mineral Royalties
portfolio, I believe that the Board's optimism and our further expansion in
the USA, executed alongside a proactive drilling campaign, will deliver
material rewards in due course.
Our appetite for additional growth opportunities has been whetted by our
recent positive experience in the USA and discussions are at an advanced stage
with Reach in respect of materially expanding our activities over the coming
months and beyond.
I am confident that the significant increase in drilling, appraisal and
development activity now planned in the pursuit of growth from our balanced UK
and USA portfolios has the potential for significant value creation for
shareholders. We believe our heightened activity and the expected additional
news-flow generated, combined with effective investor engagement on both sides
of the Atlantic, will continue to attract the ongoing support of our existing
shareholders and the attention of new investors, broadening the appeal of the
Company to a wider audience.
Overall, Union Jack is in sound financial health with a robust Balance Sheet
and continues to be debt free.
The future of Union Jack remains bright.
David Bramhill
Executive Chairman
17 May 2024
STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2023
BUSINESS REVIEW
Union Jack Oil plc is a UK registered company, focused on the exploration and
future development of the hydrocarbon project interests held by the Company
within the UK and the USA.
A review of the Company's operations during the year ended 31 December 2023
and subsequent to the date of this report is contained in the Chairman's
Statement and this Strategic Report.
The gross profit for the year amounted to £3,298,844 (2022: £5,100,479),
The net profit for the year amounted to £859,089 (2022: £3,606,624).
The profit for the year includes impairments to Property, Plant and Equipment
of which total costs are £56,829 (2022: £478,584). These impairments are in
relation to PEDL118, -£8,639 (2022: £33,718), PEDL203, -£11,160 (2022:
£28,260) and EXL294, £76,628 (2022: £416,606).
The profit for the year includes no impairments to Intangible Assets (2022:
-£3,028).
Administrative expenses, excluding impairment costs, amounted to £2,057,506
(2022: £1,665,174).
Cash and cash equivalents at year end amounted to £5,198,303 (2022:
£7,155,100).
Total Assets at year end amounted to £24,176,606 (2022: £26,361,337).
Non-current assets at year end amounted to £17,431,036 (2022: £17,157,286).
Intangible Assets totalled £10,905,630 (2022: £9,134,006).
Tangible assets totalled £5,888,456 (2022: £5,666,212).
Of the asset figures above, the net effect is a reduction in capital due to a
dividend payment and share buybacks through the year.
The Company's Income Statement reports revenues of £5,065,679 (2022:
£8,507,050) in respect of production income from Wressle and the Keddington
Oilfield.
Post balance sheet date on 14 May 2024, the Board declared a dividend of 0.25
pence per ordinary share to be paid to qualifying shareholders on Friday 26
July 2024.
In May 2023, the Company announced the disposal of its 2.5% interest in the
Claymore Area Royalty Agreement. Union Jack is pleased with the consideration
price and terms of the sale, which generated an above average return on the
Company's original investment.
During May 2023, a dividend of 0.3 pence per ordinary share was declared and
paid in July 2023.
In August 2023, operations commenced on the Wressle-1 well to install a
downhole jet pump and associated surface facilities as part of the planning to
optimise future production.
During September 2023, the Company was informed that the Environment Agency
had issued a variation of permit for the West Newton B wellsite which allows
for the use of oil-based fluids within the Permian formations during drilling
and testing operations.
In November 2023, the Planning Inspectorate upheld the appeal against the
refusal of planning permission by Lincoln County Council for a side-track
drilling operation, associated testing and long-term oil production at the
Biscathorpe-2 wellsite.
Production resumed at Wressle-1 and the sale of oil recommenced during
November 2023, following the completion of site upgrades.
During December 2023, the Company received a CPR, prepared by ERCE in respect
of Wressle, the highlights of which were a 263% increase in the 2P Reserves
compared to the 2016 CPR, a reclassification of 1,883 mboe in Penistone Flags
Contingent Resources to 2P Reserves and a 59% upgrade to the Ashover Grit and
Wingfield Flags Estimated Ultimate Recoverable.
At the year end, the Company had purchased, as a function of an approved share
buy-back plan, 6,300,000 ordinary shares which are in Treasury. These shares
do not hold any voting rights, nor do they qualify for any dividend payments.
A detailed Business Review can be found within the Chairman's Statement of the
Annual Report and Financial Statements.
FUTURE DEVELOPMENTS
The directors intend to continue with the Company's stated strategy, reviewing
the licence interests held in respect of future viability, any potential
impairment indicators that may arise during the year and adjusting as soon as
possible to any changes that may be required in the operation of the licence
interests held.
In the UK the Company holds a number of key, quality project interests,
namely, Wressle, West Newton, Biscathorpe, Keddington and North Kelsey, where
development, appraisal and exploration plans are in place for the future
benefit of stakeholders and the Company.
The initial success as a result of the drilling of the Andrews 1-17 well is
encouraging and further drilling in the USA is planned throughout 2024.
KEY PERFORMANCE INDICATORS
The Financial Statements for the year end 31 December 2023 show production
from Wressle and Keddington.
The Board is extremely pleased with the business performance of the Company
and note the significant positive financial figures reported within the KPI
table.
During the year, the Company has also remained profitable, paid a dividend and
continued a share buy-back programme.
Further events which took place after the Balance Sheet date are described in
the Directors' Report and note 23 of the Annual Report and Financial
Statements.
Table of Key Performance Indicators
Key Performance Indicators For the Year Ending For the Year Ending
31 December 2023
31 December 2022
£
£
Revenues 5,065,679 8,507,050
Total Comprehensive Income 733,687 3,777,124
Cash and Cash Equivalents 5,198,303 7,155,100
Net Current Assets 6,356,047 8,425,761
Total Equity 21,896,746 23,005,231
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Notes 31.12.23 31.12.22
£
£
Revenue 5,065,679 8,507,050
Cost of sales - operating costs (1,118,794) (1,143,967)
Cost of sales - depreciation (463,782) (2,125,425)
Cost of sales - Net Profit Interest payment (184,259) (137,179)
Gross profit 3,298,844 5,100,479
Administrative expenses (excluding impairment charge) (2,057,506) (1,665,174)
Impairment (56,829) (475,556)
Total administrative expenses (2,114,335) (2,140,730)
Operating profit 1,184,509 2,959,749
Finance income 141,672 86,586
Royalty income 35,142 42,444
Profit before taxation 1,361,323 3,088,779
Taxation (502,234) 517,845
Profit for the financial year 859,089 3,606,624
Attributable to: 859,089 3,606,624
Equity shareholders of the Company
Earnings per share 2 - -
0.79
3.20
Basic (pence)
Diluted (pence) 2 0.79 3.16
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
31.12.23 31.12.22
£
£
Profit for the financial year 859,089 3,606,624
Items which will not be reclassified subsequently
to profit
Other comprehensive profit
Profit on investment revaluation 44,984 170,500
Taxation (170,386) -
Total comprehensive profit for the financial year 733,687 3,777,124
BALANCE SHEET
AS AT 31 DECEMBER 2023
Notes 31.12.23 31.12.22
£
£
Assets 10,905,630 9,134,006
Non-current assets
4
Exploration and evaluation assets
Property, plant and equipment 5 5,888,456 5,666,212
Investments 530,112 552,043
Deferred tax asset 106,838 1,805,025
17,431,036 17,157,286
Current assets
Inventories 21,313 28,038
Trade and other receivables 1,525,954 2,020,913
Cash and cash equivalents 5,198,303 7,155,100
6,745,570 9,204,051
Total assets 24,176,606 26,361,337
Liabilities
Current liabilities
Trade and other payables 389,523 778,290
Non-current Liabilities 1,890,337 1,700,069
Provisions
Deferred tax liability - 877,747
1,890,337 2,577,816
Total liabilities 2,279,860 3,356,106
Net assets 21,896,746 23,005,231
Capital and reserves attributable to the Company's equity shareholders
Share capital 6 7,514,576 7,514,576
Share-based payments reserve 712,634 712,634
Treasury reserve (1,736,700) (214,227)
Accumulated profit 15,406,236 14,992,248
Total equity 21,896,746 23,005,231
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share Share Share-based payment Treasury Accumulated profit Total
capital
premium
reserve
reserve
£
£
£
£
£
£
Balance at 1 January 2023 7,514,576 - 712,634 (214,227) 14,992,248 23,005,231
Profit for the financial year - - - - 859,089 859,089
Other comprehensive profit - - - - 44,984 44,984
Taxation - - - - (170,386) (170,386)
Total comprehensive profit - - - - 733,687 733,687
for the year
Contributions by and
distributions to owners
Dividends - - - - (319,699) (319,699)
Treasury shares - - - (1,522,473) - (1,522,473)
Total contributions by and - - - (1,522,473) (319,699) (1,842,172)
distributions to owners
Balance at 31 December 2023 7,514,576 - 712,634 (1,736,700) 15,406,236 21,896,746
Balance at 1 January 2022 7,507,076 21,528,077 638,586 - (9,468,392) 20,205,347
Profit for the financial year - - - - 3,606,624 3,606,624
Other comprehensive profit - - - - 170,500 170,500
Total comprehensive profit - - - - 3,777,124 3,777,124
for the year
Contributions by and
distributions to owners
Exercise of share options
7,500 25,500 (19,368) - 19,368 33,000
Capital reduction - (21,553,577) - - 21,553,577 -
Dividends - - - - (900,527) (900,527)
Expiry of warrants - - (11,098) - 11,098 -
Treasury shares - - - (214,227) - (214,227)
Share-based payments - - 104,514 - - 104,514
Total contributions by and 7,500 (21,528,077) 74,048 (214,227) 20,683,516 (977,240)
distributions to owners
Balance at 31 December 2022 7,514,576 - 712,624 (214,227) 14,992,248 23,005,231
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
31.12.23 31.12.22
£
£
Cash flow from operating activities 1,984,019 5,811,734
Cash flow from investing activities (1,814,716) (712,935)
Purchase of intangible assets
Purchase of property, plant and equipment (766,424) (2,852,254)
Disposal of assets 227,272 -
Fixed term deposit - (1,000,000)
Loan advanced - (1,000,000)
Loan repaid - 2,000,000
Purchase of Investments (770,173) (100,000)
Sale of investments 883,725 6,772
Interest received 141,672 105,996
Net cash used in investing activities (2,098,644) (3,552,421)
Cash flow from financing activities
Proceeds on issue of new shares - 33,000
Dividends paid (319,699) (900,527)
Treasury shares (1,522,473) (214,227)
Net cash used in financing activities (1,842,172) (1,081,754)
Net (decrease) / increase in cash and cash equivalents (1,956,797) 1,177,559
Cash and cash equivalents at beginning of financial year 7,155,100 5,977,541
Cash and cash equivalents at end of financial year 5,198,303 7,155,100
Notes to the Financial Statements
for the year ended 31 December 2023
1 ACCOUNTING POLICIES
Basis of Preparation
This financial information does not constitute full statutory financial
statements but is derived from accounts for the year ended 31 December 2023
which are audited. This announcement is prepared on the same basis as set out
in the statutory financial statements for the year ended 31 December 2023.
While the financial information included in this announcement has been
prepared in accordance with the recognition and measurement criteria of UK
adopted international accounting standards (IFRS), this announcement does not
in itself contain sufficient information to comply with IFRS.
The Auditor's Report for the year ended 31 December 2023 was unqualified.
The full Annual Report along with a Notice of Annual General Meeting ("AGM")
will be distributed to shareholders on, or around, 27 May 2024 and is now
available on the Company's website www.unionjackoil.com
(http://www.unionjackoil.com) .
Going Concern
The Company's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chairman's
Statement and the Strategic Report. The directors' forecasts demonstrate that
the Company will meet its day-to-day working capital and share of estimated
drilling costs over the forecast period being at least 12 months from the
sign-off of these financial statements.
There are a number of risks to the Company's working capital position, which
have been identified by the directors and its independent advisor, OGA,
namely: (i) timing of incurred costs; (iii) scope of work programmes
undertaken; and (iii) realised oil price.
The impact of those risks on the Company's working capital position has been
assessed under a range of differing scenarios, with the most adverse, given
the current operating environment and stage of development that the Company's
assets are at, being identified as being the basis for evaluating the impact
for the Going Concern assessment using the worst case "stress test."
The Company has sufficient funding to meet planned expenditures and a level of
contingency. Taking account of the risks, the stress test shows that the
Company is able to operate within the level of funds currently held at the
date of approval of these financial statements.
The directors have a reasonable expectation that the Company has adequate
resources to continue in operational existence for the foreseeable future.
Thus, they continue to adopt the going concern basis of accounting in
preparing the financial statements.
2 EARNINGS Per Share
The Company has issued options over ordinary shares which could potentially
dilute the basic earnings per share in the future.
Basic earnings per share is calculated by dividing the profit attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year.
These options have been taken into account when calculating the diluted
earnings per share.
Earnings per share 2023 2022
Pence
Pence
Profit per share from continuing operations 0.79 3.20
- Basic
- Diluted 0.79 3.16
The profit and weighted average number of ordinary shares used in the
calculation of profit per share are as follows:
2023 2022
£
£
Profit used in the calculation of total basic and diluted profit per share 859,089 3,606,624
Number of shares 2023 2022
Weighted average number of ordinary shares for the purposes of basic 108,268,772 112,706,307
and diluted profit per share
- Basic
- Diluted 108,531,272 114,132,334
The Company has 831,680,400 (2022: 831,680,400) deferred shares. These have
not been included within the calculations of basic shares above on the basis
that IAS 33 defines an ordinary share as an equity instrument that is
subordinate to all other classes of equity instruments. Any residual interest
in the assets of the Company would not currently, on liquidation, go to the
deferred shareholders, hence they are not currently considered subordinate.
These deferred shares have not been taken into account when calculating the
diluted loss per share as their impact was anti-dilutive.
3 RECONCILIATION OF Profit TO CASH GENERATED FROM OPERATIONS
31.12.23 31.12.22
£
£
Profit for the year 1,361,323 3,088,779
Depletion of producing assets 463,782 2,111,614
Accretion 97,751 13,811
Impairment of intangibles 56,829 475,556
Share-based payments - 104,514
Amortisation / depreciation 34,541 20,248
Loss on disposal of assets 18,299 3,203
Finance income (141,672) (86,586)
Royalty income (35,142) (42,444)
1,855,711 5,688,695
Decrease / (increase) in inventories 6,725 (19,209)
Decrease in trade and other receivables 373,029 96,043
Increase in trade and other payables 10,167 46,205
Cash generated from operations 2,245,632 5,811,734
Income taxes paid (261,613) -
Net cash flows from operating activities 1,984,019 5,811,734
4 INTANGIBLE assets
31.12.23 31.12.23 31.12.23 31.12.22
Exploration and evaluation
Royalties
Total
Total
£
£
£
£
Cost
At 1 January 9,066,566 93,610 9,160,176 8,544,070
Costs incurred in the year 1,162,834 681,727 1,844,561 616,106
Disposals - (93,610) (93,610) -
At 31 December 10,229,400 681,727 10,911,127 9,160,176
Depreciation and impairment
At 1 January 3,312 22,858 26,170 18,697
Amortisation charge for the year - 2,185 2,185 10,501
Disposals - (22,858) (22,858) -
Costs impaired - - - (3,028)
At 31 December 3,312 2,185 5,497 26,170
Net book value
At 31 December 10,226,088 679,542 10,905,630 9,134,006
At 1 January 9,063,254 70,752 9,134,006 8,525,373
Additions to exploration and evaluation costs represent exploration and
appraisal costs incurred in the year in respect of unproven properties and
provisions recognised for decommissioning and restoration liabilities.
The directors have reviewed whether there were any potential indicators for
impairment evidence for each of the assets. If an indicator was identified,
the directors considered the potential value of the projects and licences. The
directors have also considered the likely opportunities for realising the
value of licences and have concluded that the likely value of each exploration
area is individually in excess of its carrying amount. There was no impairment
for 2023.
Included in the above intangible asset additions during the year are amounts
arising in relation to changes in decommissioning and restoration provisions.
Intangible assets (less any impairment and provisions) comprise amounts
capitalised as follows:
31.12.23 31.12.22
£
£
West Newton PEDL183 6,137,178 5,689,647
Biscathorpe PEDL253 3,666,898 3,045,506
North Kelsey PEDL241 422,012 328,101
UK Royalties - 70,752
US Royalties 679,542 -
10,905,630 9,134,006
5 PROPERTY, PLANT AND
EQUIPMENT
31.12.23 31.12.23 31.12.23 31.12.22
Development and production
Equipment
Total
Total
£
£
£
£
Cost
At 1 January 9,295,607 116,539 9,412,146 8,707,703
Additions 709,416 95,038 804,454 704,443
Disposals - (38,990) (38,990) -
At 31 December 10,005,023 172,587 10,177,610 9,412,146
Depreciation and impairment
At 1 January 3,736,187 9,747 3,745,934 1,132,178
Depreciation charge for the year 463,782 32,356 496,138 2,135,172
Disposals - (9,747) (9,747) -
Costs impaired 56,829 - 56,829 478,584
At 31 December 4,256,798 32,356 4,289,154 3,745,934
Net book value
At 31 December 5,748,225 140,231 5,888,456 5,666,212
At 1 January 5,559,420 106,792 5,666,212 7,575,525
Development and Production assets comprise amounts capitalised as follows:
31.12.23 31.12.22
£
£
Wressle PEDL180/182 4,844,894 4,695,402
Keddington PEDL005(R) 903,331 864,018
5,748,225 5,559,420
The Board has assessed the Development and Production assets as at 31 December
2023 and has identified indicators of impairment as set out in IAS36
Impairment of assets in respect of PEDL118 Dukes Wood, PEDL203 Kirklington and
EXL294 Fiskerton Airfield, respectively. This impairment amounts to a total of
£56,829 (2022: £478,584). These three licences have a carrying value of nil
(2022: nil) and the impairment shown here represents a movement in the
abandonment provision.
There were no indicators for impairment on any other assets.
6 SHARE CAPITAL
Allotted and issued: Class Nominal 31.12.23 31.12.22
Number
value
£
£
112,865,896 Ordinary 5p 5,643,295 5,643,295
(31 December 2022: 112,865,896)
831,680,400 Deferred 0.225p 1,871,281 1,871,281
(31 December 2022: 831,680,400)
Total 7,514,576 7,514,576
Ordinary shares hold voting rights and are entitled to any distributions made
on winding up. Deferred shares do not hold voting or dividend rights and are
not entitled to distributions made on winding up.
Treasury Shares
2023 2022
Number £ Number £
Ordinary shares held in treasury 6,300,000 1,749,810 700,000 214,227
by the Company
7 EVENTS AFTER THE BALANCE SHEET DATE
The following events have taken place after the year end:
During January 2024, the results of a CPR by ERCE were published in respect of
the Reserves and Resources at the Wressle development contained within PEDL180
and PEDL182. The highlights of the CPR, include a 263% increase in 2P
Reserves, the reclassification of 1,883 mbo in Penistone Flags Contingent
Resources to 2P Reserves and a 59% upgrade to the Ashover Grit and Wingfield
Flags Estimated Ultimate Recoverable. In addition, a 23% upgrade was
attributed to the Broughton North Prospective 2U Resources.
During January 2024, the Company announced details of its expansion into the
United States of America ("USA"), with the purchase of three Mineral Royalty
packages ("Royalties") all located in the Permian Basin, Texas, brokered by
its Oklahoma based, agent and adviser, Reach Oil & Gas Company Inc
("Reach"). The Royalties comprise the Cronus, Powell Ranch and Palm Spring
Units operated by Chevron, COG Operating LLC (a subsidiary of ConnocoPhillips)
and Occidental, respectively. The Royalties are estimated to have an economic
life of more than 26 years and a current Internal Rate of Return in excess of
20%. The total amount spent on royalties to date is £813,600.
During February 2024, Union Jack announced details of a farm-in agreement with
Reach to acquire a 45% working interest in a well planned to be drilled on the
West Bowlegs Prospect and an area of associated interest, located in Seminole
County, Oklahoma, USA. The total amount spent on the asset to date is
£714,476.
During February 2024, Union Jack announced details of two further farm-in
agreements with Reach. The first agreement was to acquire a 75% working
interest in a well planned to be drilled to test the Footwall Fold Prospect in
the Wilzetta Fault play and in an area of associated interest. The second
agreement was to acquire a 37.5% working interest in a 2D and 3D seismic
acquisition programme to identify additional drillable prospects along the
Wilzetta Fault. The total amount spent on the asset to date is £357,147.
During March 2024, the Company announced details of the acquisition of a
further three Mineral Royalty packages in the United States of America. The
royalties comprise the Bakken Shale, Permian Basin and Eagle Ford Shale,
located in North Dakota and Texas, respectively, and the amount spent is
included in the total royalty spend above.
In March 2024, permission was granted to trade the Ordinary Shares of the
Company on the OTCQB Venture Market on the New York Stock Exchange.
In April 2024, Craig Howie was appointed as an independent non-executive
director to the Board of the Company.
In May 2024, a dividend of 0.25 pence per ordinary share was declared by the
Board, to be paid in July 2024 to qualifying shareholders.
8 COPIES OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS
The 2023 Annual Report and Financial Statements will be posted to shareholders
on or around 27 May 2024 and are now available on the Company's website
www.unionjackoil.com (https://www.unionjackoil.com/) .
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