WTI (June) $70.04 -83c, Brent (July) $74.17 -81c, Diff -$4.13 -15c.

USNG (June) $2.26 +7c, UKNG (June) 75.2p -4.41p, TTF (June) €32.005 -€2.22.

Oil price

The spiel from Friday hasnt changed, all the influences on the oil price are the same and whilst in the short term the downward ones remain on top they will not last and as the year continues the upwards pressure will take over.

IOG

IOG has provided a further update on drilling and production operations at the Blythe field.

·      The Blythe H2 well control event encountered from the Hauptdolomit has been successfully isolated without the requirement to sidetrack the well,

·      The 7″ liner was run and cemented to isolate the kick/loss zone.  

·      The 6″ hole section commenced from the 7″ liner shoe at 9,860ft measured depth (“MD”) as per revised plan.

·      The 6″ hole section continued to the Rotliegendes reservoir section which was encountered on Sunday 14th May at a depth of 11,660 ft MD which was within expectations. Drilling continues to an expected total depth of c.13,000 ft MD.

·      First gas from the Blythe H2 well is still expected to commence by the end of Q2

·      Production from the Blythe H2 well will be initially ramped up to safely and efficiently manage the production of the resident pipeline fluids into Bacton, then expected to build up to 30-40 mmscf/d rate post ramp up

·      The Blythe H1 well is initially planned to be shut in once the H2 well is fully onstream to reduce water production into the pipeline however the H1 well will remain available for production

Rupert Newall, CEO, commented:

“The IOG, Petrofac and Shelf teams have worked extremely hard to isolate the kick/loss zone safely and successfully on Blythe H2. I am pleased to say that the 6″ hole section has so far been drilled efficiently and it is encouraging that the top reservoir has been encountered within expectations. The teams are working tirelessly to ensure the remainder of the well as well as the hook up and commissioning of the new well into the Saturn Banks Pipeline system is delivered as efficiently as possible.”

This looks like very good news for IOG at last and as the CEO comments very encouraging about the ‘top reservoir being encountered’. Then the 30-40 mmscf will be much appreciated. 

Union Jack Oil

Union Jack has announced its audited results for the year ended
31 December 2022.

Operational Highlights

•      Approvals for the Wressle Field Development Plan and licences for the production phase through to 2039 received from the North Sea Transition Authority (“NSTA”)

•      Wressle is currently the second most productive conventional producing onshore oilfield in the UK

•      ERCE commissioned to review the reserve and resource potential of the Wressle field through a new Competent Person’s Report (“CPR”)

•      Planning for the drilling of additional wells at West Newton approved by the East Riding of Yorkshire Council (“ERYC”)

•      RPS delivered a positive revised CPR on West Newton, where a horizontal well is planned to be drilled during H2 2023

•      Biscathorpe appeal heard – awaiting decision from the Planning Inspectorate

•      North Kelsey appeal hearing set for June 2023

Financial Highlights

•      Maiden net profit of £3,606,624 post tax

•      Oil revenues increased by 340%

•      Basic earnings per share increased by over 485%

•      Cash balances and near-term receivables stand in excess of £9,750,000 as at
12 May 2023

•      Debt free

•      Funded for all operational, contracted and planned CAPEX costs, including budgeted drilling activities for at least the next 12 months

•      Capital Reduction granted for share buy-back programme and the payment of a 0.8 pence Maiden Special Dividend during December 2022

•      Post period end an Interim Dividend of 0.3 pence declared to be paid July 2023

David Bramhill, Executive Chairman, commented:

“The Company will remain focused on the development of its flagship projects, Wressle and West Newton, where the respective Operators and joint venture partners have ambitious appraisal and development programmes planned.

“I am confident that the news-flow emanating from our balanced portfolio which contains elements of production, development, appraisal and exploration, will continue to attract the attention of shareholders and investors and generate support for the Company in its pursuit of shareholder value.

“Union Jack is in sound financial health with a robust balance sheet, continues to be free of debt and has significant cash reserves with no requirement to raise capital for its planned operations for at least the next 12 months.

“The future of Union Jack remains bright.”

As I always say these are only historical backwards facing records of what happened last year but the position that UJO is in now is a good deal to do with last year’s performance. 

But the fight goes on and Wressle is still a money spinner and Union Jack has other projects in the portfolio that it can address. Clearly West Newton is the next cab off the blog and quite a cab, the CPR indicated plenty of hydrocarbons albeit in the Zechstein which is difficult to access, but investors and UJO are keen to drill it out, sometimes the others in the partnership seem to be holding back….

The figures were good, cash is flowing enough to maintain capital repayments to shareholders and the rating is mean, the upside for the shares is substantial, it pays back in income and capital growth. 

After the results Chairman David Bramhill sat down with me and we talked about Union Jack and its potential, the link is here.

Core Finance Chairman Interview: David Bramhill, Union Jack Oil

Angus Energy

Angus has announced that, as planned, the second compressor at Saltfleetby Field was successfully commissioned in dual compressor mode on 10th May and the 3 producing wells in the field, B2, A4 and the new B7T well, have been flowing gas to the National Grid at the combined average daily rate of 9.5 mmscfd since then. This represents more than a 75% increase in production over that achieved in the first quarter of this year. As expected, the new B7T well is producing between 4-5 mmscfd through the temporary flowline with stable flow as it continues to clean-up.

Angus CEO, Richard Herbert, commented:

“The achievement of our goal of putting 3 wells in production through the Saltfleetby facility is very satisfying and represents an important milestone for the Company as it positions for strong cash flow generation and growth in the future. I am very grateful to the Angus team for all their hard work to deliver this great progress.”

After all this work Salfleetby is producing and heading for the dividend’s much promised not that long ago. Job boxed as they say in all the right circles…

And finally…

The Prem yesterday was pretty brutal, after beating the Toffees with some ease Alfie and his mates sat down to watch the Gooners play catch up at The Emirates, unfortunately the Seagulls didn’t read the script and with the outside chance of the Champions League won 0-3. Game almost over.

The fight for the Champions League places is tough, tonight Liverpool are at the Foxes needing to win to still chase the Red Devils and the Bar Coders but of course should the Foxes win they would at a drop of a hatter go above the Toffees…

In the Championship play-offs the Black Cats beat the Hatters 2-1 and Covo and Boro drew 0-0. In League 1 the Posh beat the Owls 4-0 and Bolton and Barnsley drew 1-1. in L2 Salford City beat Stockport County 1-0 and Bradford beat Carlisle by the same score.