UJO Jestors
Like every one else I liked the story pre Wressle1 & Burton on the Wolds drills coming from Union Jack oil & gas (LON: UJO). As time began to progress without any idea as to what was down there at Wressle1 my spider senses had begun tingling. The whole show has turned into a comic farce with the UJO jesters spinning us along with utter nonsense. I sold my Union Jack shares quite some time ago. As questions and doubts surfaced. Sadly I am now calling “Whiffy” on Union Jack Oil & the whole Wressle1 farce.
Here’s why.
The Burton on the Wolds-1 well was spudded on 18 October 2014. It reached total depth of 1086 metres on 28 October 2014. Two days later we had the confirmation that it was to be plugged & abandoned. We got confirmation that the well was a duster because on ALL drills once TD is reached then within a week or so those in charge of the drill have a good idea of what’s down there. Wold1 was declared a non-starter. No flow tests needed even though they had some hydrocarbon shows. Strange that isn’t it or is it?
Now take a good luck at Wressle1. The well was spudded on 18 July 2014 and on 23 August 2014 reached total depth (TD). Elevated mud gas readings were observed over large parts of the interval. Yet some 6 months after the drill spudded we are non the wiser as to exactly what is down there. No numbers on potential oil in place on any of the 3 intervals. In fact you’d be hard pressed to find a number on what they think is down there post TD. A UJO RNS pre spud in 2014 gave a figure, (according to the 21st July 2014 RNS) “The gross mean Prospective Resources at Wressle, as calculated by Egdon, are estimated to be 2.1 million barrels of oil.” Hardly a gusher even if it flows and as for it being commercial at $50 a barrel………… We don’t have the netback or at least I don’t have the netback. Maybe some one out there does. What are the lease operating expenses (LOE)? What does it cost to produce one barrel of oil from PEDL180? What’s the netback to UJO? As Egdon themselves stated in Nov 2013 “Exploration remains a key growth driver for the business and we are planning to commence the drilling of conventional exploration wells at Wressle and Burton on the Wolds around the turn of the year targeting 1.77 mmbls”. So we have 2 sets of numbers, one stating a Wressle1 at 2.1 million barrels another from the operator Egdon giving a combined 1.77mmbls for Wressle & Burton on the Wolds.
To extrapolate the UJO interest, according to the July 21st UJO RNS, Union Jacks’ 8.33% carries a gross mean Prospective Resource of 160,000 barrels of oil. Hardly earth shattering and in the present piss poor oil price crash a figure that would never send the UJO share price into the stratosphere. Investors are being sold a pup and spun lines. There are no gushers at Wressle1. It’s a bread ‘n’ butter onshore drill.
Maybe those who are pushing the case for UJO could explain what the delay is? Maybe some one could approach David ‘Brambles’ and ask him to give us all a guesstamate on how much oil UJO will bag? So what’s the hold up? It can’t be permissions because on 2nd Sept 2014 RNS UJO told us all that “Planning consent has already been received” <sic> for the sequential flow testing. 2nd Sept 2014. “The well is currently being completed with a 4 ½” liner to enable selective and sequential testing of these intervals as part of an extended well test, for which planning consent has already been received. These test operations, which will be designed to determine the flow rates, hydrocarbon type and hence commerciality of the Wressle-1 well, will be undertaken using a work-over rig and are expected to commence during October 2014. We are now in 2015.
On another point there’s a hefty number of warrants outstanding (335,652,548) 280,600,000 of those warrants will expire on 28 January 2015. So logic dictates that those that hold warrants; former placees, would like to see the SP well above the strike price (for their own personal financial gain). So tread carefully on the hullaballoo.
Hindsight is a wonderful thing. A story is being spun here which has allowed UJO to dilute and raise millions of pounds sterling on the back of what is in effect much ado about a very small onshore oil play that may or may not be commercial. Remember what Uncle Dan says. When companies prevaricate on releasing oil data on so called discoveries or oil shows and do so for months upon months after they’ve reached target depth, while raising millions upon millions in capital then you should be very wary. £1.4 via a 560,284,640 dilution 13th June 2014 and another £2 million via a 666,666,641 dilution 8th Sept’ 2014. They raised £650.000 via a 288,888,889 dilution in Feb 2014. Come to think of it UJO have in 2014 raised a grand total of £4,000,000 pounds sterling. The RNS’s, twitter posts and bloggers witterings remind me of that classic confusing comedy scene from that great film; The Jester starring Danny Kaye “The pellet with the poison is in the vessel with the pestle”
We have hydrocarbon shows in 3 intervals yet just like Mosman Oil & Gas (LON: MSMN)and all other faikrs we haven’t been given any data on the oil that may or may not be in the “intervals” or oil that may or may not flow commercially. That’s bollocks. The operator (Egdon) and all partners have a very good idea/knowledge of what is down there. It’s “Whiffy”
Viva!
Dan
