TIDMUJO TIDMUJOP
RNS Number : 8732I
Union Jack Oil PLC
05 September 2016
UNION JACK OIL PLC
(AIM: UJO)
Unaudited Results for the Six Months Ended 30 June 2016
Union Jack Oil plc ("Union Jack" or the "Company"), an onshore
oil and gas production company with a focus on drilling and
development opportunities in the United Kingdom hydrocarbon sector,
is pleased to announce its unaudited results for the half year
ended 30 June 2016.
Operational Highlights
-- Field Development Plan progressing to proceed with commercial production from the Wressle discovery expected to
commence in late Q4 2016
-- Acquisition of a 7.5% interest in PEDL143 containing the drill-ready Holmwood Prospect on trend with the Horse
Hill-1 discovery
-- Acquisition of an 8.33% interest in PEDL182 containing the Broughton North Prospect
Financial Highlights
-- Cash position in excess of GBP2 million as at 5 September 2016
-- Company remains debt free
-- Company is fully funded for current planned drill programme and Wressle development
David Bramhill, Executive Chairman, commented: "Union Jack is
well placed with a number of development, appraisal and drilling
projects underway that are fully funded from our available cash
resources.
We are not deviating from our strategy and we are continuing to
see an escalation of the rewards of that focus.
I am pleased to offer a positive Half Yearly Report to our
shareholders and I look forward to reporting on the progress of our
asset base during the remainder of 2016 and beyond."
For further information please contact the following:
Union Jack Oil plc +44 (0) 77871 60682
David Bramhill
Shore Capital +44 (0) 20 7408 4090
Nominated Adviser
Edward Mansfield
Anita Ghanekar
Corporate Broking
Jerry Keen
SP Angel +44 (0) 20 3470 0470
Joint Broker
Richard Hail
Yellow Jersey PR Limited +44 (0) 7768 537 739
Public Relations
Dominic Barretto
Aidan Stanley
CHAIRMAN'S STATEMENT
INTRODUCTION AND PROJECT REVIEW
I am pleased to present this Half Yearly Report for the six
months ended 30 June 2016 to the shareholders of Union Jack Oil plc
("Union Jack" or the "Company").
The past six months have proven to be highly satisfactory
operationally with the acquisition of three new licence interests,
namely PEDL143 (7.5%) from Europa Oil and Gas Limited ("Europa"),
incorporating the drill-ready Holmwold Prospect, PEDL209 (10%) from
Egdon Resources plc ("Egdon") containing the Laughton Prospect and
PEDL182 (8.33%) from Egdon containing the Broughton North Prospect.
Entry into these additional licences provides the Company with
additional exposure to potential production, development and
appraisal.
On the financial aspect, costs are well under control and at the
time of writing the Company holds cash in excess of GBP2 million
and remains debt free.
Since incorporation, Union Jack's strategy has been to focus on
low-cost UK onshore projects, initially in exploration and
appraisal drilling, and more recently production through the oil
and gas discovery at Wressle-1 where the operator, Egdon, is
progressing a Field Development Programme with a view to commencing
commercial production in Q4 2016, coupled with the acquisition of
an interest in the producing Keddington oilfield (PEDL005(R)). It
remains the Board's goal for Union Jack to become a cash generative
profitable entity in due course.
This time last year in respect of the Wressle-1 discovery within
PEDL180, I commented on the on-going testing. One year on Wressle
is expected, within months, to become a producer from the Ashover
Grit reservoir at a controlled rate of 500 barrels of oil gross per
day. Union Jack's income from this development is expected to have
a material impact on the Company's cash flow generation and to
contribute to financing the development of other projects within
the Company's portfolio.
In addition, a Competent Persons Report ("CPR") in respect of
Wressle is nearing completion and publication. The CPR will set out
2P oil and gas reserves held by the Company together with
significant contingent resources and the confirmation of the
viability of the project.
The Wressle-1 discovery has been mapped as extending into
PEDL182. As a result, under the terms of an agreement entered into
with Egdon in May 2013, the Company has acquired, at no extra cost,
an equivalent 8.33% interest in respect of the entire Wressle
discovery that extends into PEDL182.
In respect of logistics, it was deemed commercially prudent by
the Board that Union Jack obtain an equal interest in the remainder
of PEDL182 not covered by the Wressle discovery. Union Jack
acquired an 8.33% economic interest from Egdon in June 2016.
PEDL182 contains the Broughton North Prospect which could be
drilled from the existing Wressle well site. The prospect has been
mapped from the same high quality 3D seismic data set used to
define Wressle. The Wressle-1 discovery has significantly reduced
the geological risk over PEDL180 and PEDL182 and this transaction
will benefit the Company going forward in any "add on" development
decisions which may follow once Wressle-1 is in commercial
production.
In May 2016, Union Jack entered into an agreement with Europa to
acquire a 7.5% interest in PEDL143 containing the drill-ready
Holmwood Prospect. This is the first Weald Basin licence interest
to be introduced to the expanding Union Jack UK onshore
portfolio.
Holmwood is a conventional oil prospect first identified by BP
in 1988 and is estimated by the operator, Europa, to hold gross
mean unrisked prospective resources of 5.6 million barrels with a
geological chance of success ("COS") of 33% and located just 12
kilometres from, and on trend with, the Horse Hill-1 discovery. A
two year extension to PEDL143 was granted by the Oil and Gas
Authority ("OGA"), extending the licence term to October 2018.
Holmwood is currently expected to be drilled H1 2017.
In January 2016 the Company acquired a 10% interest in PEDL209,
containing the Laughton Prospect. In February 2016 the Laughton-1
well was spudded. The drilling of the Laughton-1 well satisfied the
work commitment for the licence's first term which allows it to
proceed into its second term. Analysis of the wireline log data
indicated that the hydrocarbon saturations associated with the
shows were not sufficiently encouraging to warrant testing. There
remain two further conventional prospects within PEDL209 to be
evaluated.
Other assets held by Union Jack include interests in the
producing Keddington oilfield PEDL005(R) (10%), Biscathorpe PEDL253
(12%), North Kelsey PEDL241 (20%), Burton on the Wolds PEDL201
(10%) and PEDL339 (10%) which contains an extension of the Louth
Prospect.
Union Jack owns an interest in Keddington, which provides a
modest income from our share of production. Within the licence area
a number of high quality prospects are present, including the Louth
Prospect, and the North Somercotes Prospect.
The Louth Prospect is estimated by the operator to contain Stock
Tank Oil Initially in Place ("STOIIP") of 5.5 million barrels and
gross mean Prospective Resources of 1.4 million barrels with an
attractive COS of 37%.
Biscathorpe is a drill-ready prospect with planning consent,
expected to be drilled during H1 2017, adding considerable risk
adjusted value. The Biscathorpe structure was initially drilled by
BP in 1987 with the Biscathorpe-1 well, which encountered a thin
oil-bearing sandstone. The sand unit is expected to thicken away
from the crest of the structure and the operatorÕs Best Estimate is
a gross Prospective Resource of 14 million barrels of oil with a
COS of 40%.
North Kelsey is a multi-target drill-ready prospect located
within the proven hydrocarbon fairway of the Humberside Platform
and is approximately 10 kilometres to the south of the Wressle-1
discovery.
The prospect is defined on 3D seismic data and has the potential
for four stacked sandstone reservoirs. The gross mean combined
Prospective Resources for these multiple objectives, as calculated
by Egdon, are estimated to be 6.7 million barrels of oil.
Post the period end, in July 2016 the OGA granted a one year
extension to both PEDL253 and PEDL241 until 30 June 2017.
Data from the Burton on the Wolds-1 well suggest significant
Bowland-Hodder unconventional shale potential may exist on PEDL201
where thermally rich, oil prone shales are expected to be
present.
During 2014, industry consultants Molten Limited completed a
report commissioned by Union Jack reviewing the shale potential
within PEDL201. Molten's review and summary concluded that the mean
deterministic unrisked in place volumes within that shale area
could be approximately 5.4 billion barrels of oil and in excess of
2.7 trillion standard cubic feet of gas gross.
A detailed review of Union Jack's asset base can be found in the
Review of Operations section within the Half Yearly Report and also
within a Corporate Presentation, both of which can be viewed on the
Company's website www.unionjackoil.com.
CORPORATE AND FINANCIAL
At the time of writing cash balances stand at in excess of GBP2
million, enough to cover the costs of our current planned drilling
and development programme.
The Board intend to continue with the same low salary commitment
going forward.
We apply strict financial and technical disciplines to our
activities and we pride ourselves on our low general and
administrative costs presented in the Income Statement within this
report.
A further reduction in the Supplementary Tax rate from 20% to
10% in the March 2016 budget is constructive and positively impacts
on the economics of onshore hydrocarbon projects. This would reduce
the effective tax rate from 50% to 40% going forward.
Our strategy of focusing on late-stage drill-ready projects
helps to manage the portfolio from a technical perspective and also
a financial scenario where costs are manageable and development of
any discovery can be achieved within a reasonable time frame.
We believe the full cycle costs associated with UK onshore
production, development and exploration remain highly attractive
even at current oil prices, of which, in the Board's opinion, the
nadir has been tested.
I take this opportunity, as always, to thank the rest of my
Board, Joe O'Farrell, Graham Bull and Ray Godson, for their
continuing solid advice, technical support and expert guidance in
respect of Company matters, and acknowledge the natural cohesion
between the Board and our advisers who all interact well, resulting
in a sound functional team.
SUMMARY
I am pleased to state that, as we enter a new corporate and
financial period, the growth of Union Jack continues without
financial concerns.
We work with sound operators and partners who have already
demonstrated their prowess in making discoveries and taking them
through from discovery to development.
Union Jack's strategy will continue as stated, and I look
forward to reporting on the progress of our projects during 2016
and beyond, in particular Wressle-1 where development is imminent
and the cash flow to Union Jack is expected be a major catalyst to
achieving our goals.
David Bramhill
Executive Chairman
5 September 2016
UNAUDITED INCOME STATEMENT
for the six months ended 30 June 2016
Notes Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
GBP GBP GBP
--------------------------------------------- ------ ----------- ----------- -------------
Revenue 8,152 - -
--------------------------------------------- ------ ----------- ----------- -------------
Administrative expenses (262,042) (259,512) (605,742)
--------------------------------------------- ------ ----------- ----------- -------------
Operating loss (253,890) (259,512) (605,742)
Other Income - - 12,713
Finance income 3,193 3,474 6,569
--------------------------------------------- ------ ----------- ----------- -------------
Loss before taxation (250,697) (256,038) (586,460)
Taxation 3 - - (841)
--------------------------------------------- ------ ----------- ----------- -------------
Loss for the period / year (250,697) (256,038) (587,301)
--------------------------------------------- ------ ----------- ----------- -------------
Attributable to:
Equity shareholders of the
Company (250,697) (256,038) (587,301)
--------------------------------------------- ------ ----------- ----------- -------------
Loss per share attributable
to equity shareholders
Basic and diluted loss per
share (pence) 2 (0.01) (0.01) (0.02)
--------------------------------------------- ------ ----------- ----------- -------------
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2016
Six months ended Six months Year ended
30 June 2016 ended 31 December
Unaudited 30 June 2015 2015
GBP Unaudited Audited
GBP GBP
------------------------- ----------------- -------------- -------------
Loss for the financial
period / year (250,697) (256,038) (587,301)
Other comprehensive
income - - -
------------------------- ----------------- -------------- -------------
Total comprehensive
loss for the period
/ year (250,697) (256,038) (587,301)
------------------------- ----------------- -------------- -------------
UNAUDITED BALANCE SHEET
as at 30 June 2016
As at As at As at
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
Notes GBP GBP GBP
----------------------------- ------ ------------ ------------ -------------
Assets
Non-current assets
Exploration and evaluation
assets 1,611,820 1,057,573 1,165,077
Investments 40,000 40,000 40,000
----------------------------- ------ ------------ ------------ -------------
1,651,820 1,097,573 1,205,077
Current assets
Trade and other receivables 55,575 62,852 27,232
Cash and cash equivalents 2,288,410 2,741,214 3,078,311
----------------------------- ------ ------------ ------------ -------------
2,343,985 2,804,066 3,105,543
----------------------------- ------ ------------ ------------ -------------
Total assets 3,995,805 3,901,639 4,310,620
----------------------------- ------ ------------ ------------ -------------
Liabilities
Current liabilities
Trade and other payables 21,531 58,993 85,649
Provisions 18,000 - 18,000
----------------------------- ------ ------------ ------------ -------------
Total liabilities 39,531 58,993 103,649
----------------------------- ------ ------------ ------------ -------------
Net assets 3,956,274 3,842,646 4,206,971
----------------------------- ------ ------------ ------------ -------------
Capital and reserves
attributable to the
CompanyÕs equity
shareholders
Share capital 4 2,593,458 2,475,811 2,593,458
Share premium 4,042,698 3,464,757 4,042,698
Share-based payment
reserve 167,924 167,924 167,924
Accumulated deficit (2,847,806) (2,265,846) (2,597,109)
----------------------------- ------ ------------ ------------ -------------
Total equity 3,956,274 3,842,646 4,206,971
----------------------------- ------ ------------ ------------ -------------
Unaudited Statement of Cash Flows
for the six months ended 30 June 2016
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Unaudited Unaudited Audited
GBP GBP GBP
------------------------------- ----------- ----------- -------------
Cash outflow from operating
activities (346,351) (301,254) (543,846)
-------------------------------- ----------- ----------- -------------
Cash flow from investing
activities
Purchase of intangible assets (446,743) (415,326) (534,320)
Purchase of investments - (20,000) (20,000)
Interest received 3,193 3,474 6,569
-------------------------------- ----------- ----------- -------------
Net cash used in investing
activities (443,550) (431,852) (547,751)
-------------------------------- ----------- ----------- -------------
Cash flow from financing
activities
Proceeds on issue of new
shares - - 800,000
Cost of issuing new shares - - (104,412)
-------------------------------- ----------- ----------- -------------
Net cash generated from
financing activities - - 695,588
-------------------------------- ----------- ----------- -------------
Net decrease in cash and
cash equivalents (789,901) (733,106) (396,009)
-------------------------------- ----------- ----------- -------------
Cash and cash equivalents
at beginning of period /
year 3,078,311 3,474,320 3,474,320
-------------------------------- ----------- ----------- -------------
Cash and cash equivalents
at end of period / year 2,288,410 2,741,214 3,078,311
-------------------------------- ----------- ----------- -------------
Notes to the Unaudited Financial Information
for the six months ended 30 June 2016
1 Accounting Policies
Basis of Preparation
These financial statements are for the six month period ended 30
June 2016.
The information for the year ended 31 December 2015 does not
constitute statutory financial statements as defined in section 434
of the Companies Act 2006.
A copy of the statutory financial statements for that period has
been delivered to the Registrar of Companies. The Auditor's Report
was not qualified, did not include a reference to any matters to
which the Auditor drew attention by way of emphasis without
qualifying the report and did not contain statements under section
498(2) or (3) of the Companies Act 2006.
The interim financial statements for the six months ended 30
June 2016 are unaudited.
The interim financial information in this report has been
prepared in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the European Union ("EU") applied
in accordance with the provisions of the Companies Act 2006.
The financial statements have been prepared under the historical
cost convention. The principal accounting policies have been
consistently applied to all periods presented.
Significant Accounting Policies
The accounting policies and methods of computation followed in
the interim financial statements are consistent with those as
published in the Company's Annual Report and Financial Statements
for the
year ended 31 December 2015.
The Annual Report and Financial Statements are available from
the Company Secretary at the Company's registered office, 6
Charlotte Street, Bath BA1 2NE or on the Company's website
www.unionjackoil.com.
Going Concern
The Directors have, at the time of approving the interim
financial statements, 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.
2 Loss per Share Attributable to the Equity Shareholders of the Company
Basic loss per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Given the Company's reported loss for the period, warrants are
not taken into account when determining
the weighted average of ordinary shares in issue during the
period and therefore the basic and diluted earnings per share are
the same.
Basic loss per share Six months Six months Year
ended ended ended
30 June 2016 30 June 2015 31 December 2015
pence pence pence
------------------------ -------------- -------------- ------------------
Loss per share from
continuing operations (0.01) (0.01) (0.02)
------------------------ -------------- -------------- ------------------
The earnings and weighted average number of ordinary shares used
in the calculation of basic earnings per share are as follows:
Six months Six months Year
ended ended ended
30 June 2016 30 June 2015 31 December 2015
GBP GBP GBP
--------------------- -------------- -------------- ------------------
Earnings used in
the calculation
of total
basic and diluted
earnings per share (250,697) (256,038) (587,301)
--------------------- -------------- -------------- ------------------
Number of Shares Six months Six months Year
ended ended ended
30 June 2016 30 June 2015 31 December 2015
--------------------- -------------- -------------- ------------------
Weighted average
number of ordinary
shares for the
purposes of basic
and
diluted earnings
per share 2,888,708,805 2,418,120,570 2,492,898,974
--------------------- -------------- -------------- ------------------
3 Taxation
There was no tax charge for the half yearly period due to the
loss incurred. A deferred tax asset in respect of trading losses
and share-based payments has not been recognised due to the
uncertainty of timing of future profits. The trading tax losses are
recoverable against suitable future trading profits.
4 Share Capital
At 30 June 2016, there were 2,888,708,805 ordinary shares of a
nominal value of 0.025 pence in issue.
At 30 June 2016, there were 831,680,400 deferred shares of 0.225
pence nominal value in issue.
At 30 June 2016, there were 55,052,548 warrants outstanding and
exercisable.
5 Events after the Balance Sheet Date
There are no events after the balance sheet date to report.
6 Related Party Transactions
Charnia Resources (UK) Limited, an unincorporated entity, owned
by Graham Bull, non-executive director, received from the Company
the sum of GBP19,200 during the period under review in respect of
consulting fees.
Jayne Bramhill, spouse of David Bramhill, received from the
Company the sum of GBP3,000 during the period under review in
respect of IT maintenance and administration costs.
7 Copies of the Half Yearly Report
A copy of the Half Yearly Report will shortly be posted to
shareholders, and is now available on the Company's website
www.unionjackoil.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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September 05, 2016 02:00 ET (06:00 GMT)