*Take Note! Before I start some wise words to those who read & follow: Lot of interest in emails/texts and private DMs over the last few months on why I’m not as prolethic writing/tweeting/tipping stocks every day on companies. There’s a good reason: The simple truth is this: Most of the time investing/trading is about not getting suckered into the horse-shit. It’s about protecting capital while biding ones time until a real opportunity comes along, then getting your research done. Usually it’s a company that I’ve been tracking on the watch-list for months if not years. If that company gets to a point in time where it’s a crock of shit then I write it up negatively, if there’s a real opportunity then I write it up positively. Hence UJO which I’ve been following since the Wressle discovery. The way to keep some semblance of integrity/credibility is to resist running with the known rampers/mug punters. Plough your own farrow and always remember that it’s not as these fookers say a ‘Game’ it’s deadly serious peoples liveleyhoods are at stake.
The majority of companies never get there. Because they’re life-style companies. The AIM is awash with them. If, like me, you’ve been around for an age and a day, you know that most companies burn up. Any blogger/market commentator or financial platform that consistently writes, posts, podcasts/tweets on a daily basis nothing but ‘positivity’ on super dooper oil, tech, mining stock plays etc. Is a ‘scatter-gun cowboy’. And should be treated with the utmost caution. No one can call 40/50 stocks in a year positively. That is a fact! If you can get 5/6 right then you’re doing extremely well.
Occasionally, along comes a company that manages to get to a point in its business cycle of ticking all the right boxes. It doesn’t happen often but when it does there’s potential for huge financial gains. Such is the time for Union Jack Oil (LON: UJO). It’s a small micro-cap oiler that’s mainly under the radar, trading at one tenth of a penny (0.10p). What marks them out, as of now, is that their asset base, which is onshore UK, has the potential in the coming months of transforming them into a genuine UK oil producing company. Not many of those around these days…..
UJO have an interest in a whole host of UK onshore licenses, but for the purposes of this blog I’m concentrating on three of the licenses that will cause a re-rate should they do what most expect them to do, strike oil and gas or be allowed to get the production going (Wressle).
1/West Newton Gas Discovery: (16.6%) West Newton A-1 gas discovery (Best Estimate Contingent Resource 189 Bcfe or 31.5 MMboe gross), the West Newton conventional appraisal well is planned to be drilled in Q1 2019.
2/Wressle: (27.5% ) Is an oil discovery that’s mired in ‘legals’. It’s a bread and butter asset that has flowed oil and gas. The estimates of oil are circa 2.1 million barrels. Wressle is expected to flow at 500bopd minimum but could hit 1,000 bopd that’s somewhere between 137-264bopd net to UJO. All going well this should be resolved in late 2019/20.
3/Biscathorpe: The mean Prospective Resource volume for the main reservoir objective, as calculated by Egdon Resources (35.8%) is circa 14 million barrels of oil. Additionally, there’s a potential for stratigraphic trapping at Biscathorpe, which, if present, could increase the expected gross Prospective Resources to 41 million barrels of oil. UJO Own 22%. Drilling late 2018.
Now here’s the nub. 22% of 14m barrels of oil is circa 3m barrels net to UJO. If it’s 41M barrels then it’s circa 9m barrels of oil net to the company, on The West Newton A-1 gas discovery the Best Estimate Contingent Resource 189 Bcfe or 31.5 MMboe gross, the West Newton conventional appraisal well is planned to be drilled in Q1 2019. That’s circa 5MMboe net to UJO. On Wressle which is a discovery and has already flowed there’s 2.1m barrels of oil, 27.5% net to UJO that’s 550,000 barrels.
In total (not including their small producing assets), over the next few months, at the top end of the numbers Union Jack Oil are involved in three licences in play for circa 75,000,000m – 47,500,000m barrels of oil or equivalent. That’s more oil and gas than any UK onshore company currently listed on the London Alternative Investment Market (AIM). There is NO company that comes close to them.
Their share of the oil and gas is bigger than two of the biggest over-hyped POS’s currently deluding investors with fantasy claims of billions of barrels of oil in the Weald. While producing zippo! (UKOG and Angus Energy).
The difference in the SP and the market capitalisation is astounding. As is the quality of the UJO licences which by far out-strips UKOG & Angus Energy’s. It is only a question of time before they come on the radar and out-perform, SP and oil production wise, the Liargas plays and what’s more UJO are a conventional oiler. No fracking, all environmental regulations are adhered too.
UJO have quietly manoeuvred themselves into a potential winning hand. What’s more their recent placing takes out the spectre of imminent dilution. They’re fully funded going forward. Debt free. It doesn’t get any better than this for a micro-cap play.
How high can they go? That’s the million-dollar question. On the run up to the Biscathorpe spud if investors get behind it they could double or triple in value. If they strike oil at Biscathorpe and bring in the West Newton discovery revenue will start to flood in, then 0.50p-1p isn’t hard to see. Could hit 2p we just don’t know.
One thing is certain the SP will rise the closer the drills get and interest starts to pick up. Get a slice of the pie while it’s cheap, because ‘campers’ when it’s 0.30p you’ll be cursing!
Nota Bene: I hold stock in UJO. Not that it’s any of your business!!!