The Union Jack Oil PLC (LON: UJO) share price fell 8.63% after issuing an update about its Wressle oil field located in onshore UK. The company revealed that it had decided to install a downhole jet pump and associated surface facilities to optimise future production.
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Investors reacted negatively to the announcement, given that it would interrupt production at Wressle for a few weeks as the work was being done. The company expects to resume production in late September once the work is done.
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Union Jack Oil has a 40% economic interest in the Wressle development. The current project began with a slickline programme, which is now complete. The company acquired temperature gradients and downhole pressure during the initial part of the project.
The work programme includes re-completing the well for installing a downhole jet pump and the siting of associated surface equipment. The entire project is expected to take three weeks.
Data obtained from the project activities will be included in the ongoing work by ERC Equipoise Ltd. The expected beneficial impact on the production of the artificial lift from the jet pump will be included in Equipoise’s independent Competent Person`s Report (CPR). The company will release the CPR once the work is completed.
Union Jack shares have fallen 29.71% since the year started as investor sentiment towards the company turned negative as oil prices fell, reducing the massive profits earned by oil companies in the past year.
Today’s news extended the downtrend witnessed in UJO’s share price over the past few months despite oil prices recovering from the sideways trend that was in place from early May to late June, followed by a significant rally in oil prices.
David Bramhill, Union Jack’s Executive Chairman, commented: “Industry sources indicate that over 90% of oil wells employ artificial lift during their life-cycle. Therefore, the natural sequence of the installation of a jet pump on the Wressle-1 well offers a reliable method of ensuring the continued operation and the optimisation of its future production performance.”
The Union Jack Oil (UJO) share price.
The Union Jack Oil (UJO) share price fell 8.63% to trade at 18.73p from Wednesday’s closing price of 20.50p.
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