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March 31, 2015

Union Jack Oil in a strong position thanks to Wressle success, broker says

City broker Shore Capital described the results from the Wressle discovery as “very satisfactory” and said it now looked forward to updates from the ongoing work to monetise the well.

In a note about Union Jack Oil (LON:UJO), owner of an 8.3% stake in Wressle, Shore Capital analyst Craig Howie said there was now an increasingly strong likelihood of commercial production from Wressle.

Howie believes UJO will see revenues from Wressle in the second half of this year, from production testing. He predicts the company will generate about £140,000 net from the tests.

The analyst said the Ashover Grit reservoir is likely to be the first in production. He predicts that the interval, which tested at 80 barrels per day, could flow up to 250 bopd once additional production equipment has been installed.

Production revenues from Wressle can help UJO expand its portfolio, Howie explains.

“Union Jack’s financial position remains strong and we expect the company to participate in two further wells (at Biscathorpe and North Kelsey) in 2015,” he said.

“With an increasingly strong likelihood of commercial production from Wressle, we also see scope for potential additions to the portfolio and note continued industry interest in the UK shale opportunity.”

Howie reckons UJO’s shale interests – a portion within the PEDL 201 licence area - could be worth over US$200mln, though he currently discounts this asset down to 5% or 0.29p per share (risked). @MasterMetals MasterMetals Blog

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