Union Jack Oil PLC (LON:UJO) has been upgraded by house broker SP Angel after the WNB1Z conventional appraisal well at West Newton came in ahead of expectations.

Results were much better than the forecasts beforehand said the broker, with at least 63m of saturated net pay though operator Reabold estimated it as high as 118m.

The well is also some just 2.5km away from the previously drilled WNA-1 and WNA-2 discoveries, SP Angel noted, suggesting that the prolific Kirkham Abbey reservoir extends across the project area.

Drilling operations have now concluded and production casing has been run in preparation for testing of the Kirkham Abbey interval at this location.

That will involve Extended Well Test (EWT) of both the WNB1Z and WNA-2 appraisal wells alongside a complete analysis of the WNB1Z well data, including correlation of the A-1, A-2 and B1Z well results.

In addition, the Joint Venture (UJO 16.7% Reabold 56%) is considering a 3D seismic programme over other structures which have been highlighted within the licence area said the broker.

More immediately for UJO will be the Wressle field, also in Lincolnshire, which is expected to come on stream at a rate of 500 barrels per day (200net) in the first quarter of 2021.

Modelling has inferred a breakeven price of US$17.62/bbl, highlighting the compelling project economics on offer at the project in the current oil price environment said SP Angel.

Based on the West Newton outcome, the broker has raised its price target to 0.88p from 0.82p and retains a strong buy rating.

Shares rose 11% to 0.19p


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