I am writing this one-off article on AIM listed Union Jack Oil (AIM:UJO) to educate my fellow investors on just how undervalued the company is compared to other onshore UK oil companies. I also analyse the upcoming catalyst events which are set to be game-changing for the company.
There are not many oil & gas companies on the London market with low risk and high impact assets that could really bring value to investors in the short term. I identified Union Jack Oil a few months ago and saw a unique opportunity to make significant profits.
Union Jack Oil has two main giant transformational drills both of which are derisked appraisals Biscathorpe and Rathlin. Both will propel the stock many significant times as all my research is based on hard facts.
Biscathorpe1 was drilled by BP on the crest to find the Wytch Farm of the North which in 1987 made an oil discovery with light oil flowing. However further extended testing was never taken. The oil discovery was 1.2m full of oil rich sands with significant upside quoted in the operator’s full year presentation and it has been mentioned to me by senior management that, had oil not been $10 in 1987, it could have been commercial in today’s oil price environment.
Biscathorpe 2 has a 40% cos as a step out appraisal into the sweet spot within thicker sands down dip similar to nearby Reepham Oil discovery. The calibrated well data of Biscathorpe 1 and new 3D, rather than oil 2D, shows the oil kitchen calculated to be 14m gross rec to 42m gross rec based on UJO presentations of which the company has 22% interest spud in early January 2019. Within the planning permission report granted, I am pretty confident of a big find!
TheBiscathorpe oil discovery could be far bigger than the infamous Horse Hill which reported 11m OIP not recoverable, so considering UKOG £80m cap company while UJO is at only £9m cap at present time and it looks undervalued.
The company has a few bread and butter assets producing or ready to produce, however the market values these at zero including Wressle. Any movement in opening the cupboard door could double the company’s share price. However, these are not game changers, just bread and butter as I said.
The crown jewel is the Rathlin asset in the West Newton prospect with over 16% interest and drilling planned in Q1 2019. The asset WAS mostly discovered and flow tested in 2014. There has been some confusion in the market so I have taken advantage of buying stock. As for the size of Rathlin, it’s not 189bcf rec of gas, which is large.
The internal city presentations clearly states the high case scenario for West Newton A is 640bcf rec of derisked gas, plus high case of 146m rec oil exploration prospect underneath. This makes it the one biggest onshore well in UK history with 100% cos and 70% commercial cos.
Looking at the presentation, Newton B has an additional derisked 400bcf rec of gas, and if we add just those two licenses together, they make over 1TCF of recoverable gas: on par with total’s recent North Sea discovery but at vastly reduced capex costs, being onshore.
Time to research this company as the clock is now ticking. UJO is fully financed on both wells min of 10 bagger if only one derisked well hits, let alone the stated figures in my article on both derisked wells. One last point, in global uncertain times, I recall Edinburgh Oil & Gas when it discovered less in the North Sea, which went up 10 times in a very poor general market.
I was in it. So everything is to play for, I will continue to add to my TR1 5.93% position where possible.
