Union Jack oil announced on Monday that “historic” net revenues of $4m (£3.04m) have been made from the development of Wressle Hydrocarbons, on the PEDL180 and PEDL182 licenses in north Lincolnshire, on the margin western Humber Basin.
The AIM-listed company holds a 40% economic interest in the development of hydrocarbon production.
He said the well continued to produce under natural flow, with no water shut off, while site improvements were underway.
As of March 25, the company’s cash balances and short-term receivables stood at over £6.6 million.
Early settlement of £2.08 million had been paid to Calmar LP for deferred consideration on the acquisition of 25% interests in PEDL180 and PEDL182.
The company said it is covered for all operating costs and capital expenditures, including any planned drilling, for the foreseeable future.
Union Jack said an operational update on Wressle would be issued in April, while its lawyers were engaged to advance legal work on a capital reduction exercise, to enable either a share buyback program, or a payment of dividends.
Finally, the company confirmed that it was debt free.
“Revenues from Wressle’s development have created a dramatic shift in the financial strength of Union Jack,” said executive chairman David Bramhill.
“We are still in the early stages of unlocking Wressle’s significant upside potential, which is continually improving as site upgrades take effect, future Ashover Reservoir natural gas monetization Grit and the substantial upside potential offered by the contingent resource present in the Penistone Flags reservoir which remains untapped.
“Given the future prospects of our major projects at Wressle, West Newton, Keddington and Biscathorpe, the Union Jack Board believes that the company is now on a significant growth trajectory which bodes well for the future. of the company and its shareholders.
At 11.56am BST, Union Jack Oil shares rose 6.43% to 29.8p.