Oil price, Union Jack, Wentworth, Sterling Energy. And finally…

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WTI $60.52 -62c, Brent $63.93 -41c, Diff -$3.41 +21c, NG $3.08 -14c, UKNG 44.49p +1.99p


Oil price


A number of factors unravelling in the last 24 hours have meant that it looks like oil at $61 and $65 respectively is probably enough, at least for the time being. The fact that it seems right has nothing to do with it, a squeeze is on and longer term it will go higher.


But not for now, as oil rallied yesterday it ran into a few sellers some of whom had just seen the weather forecast from the Texas area where a thaw is expected over the weekend. Nothing on the ground has changed yet, oil and natural gas is still in shortage as is refined product and as a result gasoline prices are all over the place.


Another factor is the attitude of the US towards the Middle East where President Biden has confirmed his anti-Saudi stance and that he is ‘ready to resume talks with Iran’. With Iran pressing for abolition of sanctions and a quota from Opec+ they continue to process uranium against the wishes of the inspectors.


Union Jack Oil


Union Jack has announced a share consolidation of 200 for 1 as directors believe that the existing share capital structure is no longer appropriate, as the high number of shares in issue combined with the relatively low price per share is thought to result in excess volatility, reduced liquidity and a widening in the market bid and ask share price spread in the Company’s shares.


‘The Board believes that the Company is now in an excellent financial and operating position given the significant progress made in recent years on its three key projects at West Newton, Wressle and Biscathorpe and that now is an appropriate time to implement the Consolidation and are proposing consolidating the Existing Ordinary Shares in issue so that every 200 Existing Ordinary Shares will be consolidated into one Consolidated Ordinary Share’.


‘The Company’s predominantly retail investor shareholder base has been an essential part of the Company’s growth since its AIM Admission and IPO in July 2013 and remains the case. Their ongoing support has been important to the Company building its balanced portfolio of projects.


As the company point out the portfolio is in a balanced, strong and attractive position, the active appraisal of the major discovery at West Newton following successful wells at WN 1-A, WN A-2 and WN B-1Z that is in the final stages of preparing to undertake long term production testing of WN B1-Z followed by WN A-2 and where the proposed WN B-2 appraisal well is currently planned to be drilled in H2 2021


Production from the recent development at Wressle where high-quality oil is currently free flowing during its initial test and production clean up period and the Biscathorpe discovery where plans are advanced for drilling the B-2Z appraisal well also during H2 2021; as well as material interests in two producing oilfields at Keddington and Fiskerton Airfield.


This is a sensible and practical move by UJO who are in a very good operating position and the consolidation ensures a more professional, convenient way of trading the shares.


Wentworth Resources


Wentworth Resources, has announced its membership to the United Nations Global Compact, a voluntary initiative to promote the development, implementation and disclosure of responsible business practices.


Launched in 2000, the UN Global Compact is the world’s largest corporate sustainability initiative, with more than 12,000 companies based in over 160 countries, and 70 local networks. The initiative calls upon companies to operate responsibly by aligning its strategies and operations with the UN’s Ten Principles on human rights, labour, environment and anti-corruption, and to take strategic action to support the Sustainable Development Goals (SDGs).


As a leading domestic natural gas producer in Tanzania, Wentworth plays a critical role in ensuring low carbon, affordable and reliable energy access to the people of Tanzania. Energy access rates are currently at 37% and with a 2030 universal energy access target set by the Government of Tanzania and aligned with the UN Sustainable Development Goals, Wentworth has an important role to play in scaling up access during the next decade.


Katherine Roe, CEO, commented:


“As a leading domestic natural producer that is contributing 50% of all the natural gas that powers the Tanzanian grid, working hand-in-hand with hydropower to ensure reliable and affordable access and displacing the need for HFO and diesel, we are playing a pivotal role in shaping Tanzania’s sustainable future.


Joining the UN Global Compact underlines our existing commitment to deliver these outcomes responsibly and collaboratively with all of our stakeholders, from employees and communities to Government, to capture the most impact for local stakeholders and to support Tanzania’s ongoing socio-economic growth.


Throughout the last year, a priority for our business has been to bolster our ESG performance and disclosure. Joining the UN Global Compact is an important milestone in this journey to ensure we uphold international best practice in our values and behaviour and we look forward to working collaboratively with other network members to accelerate responsible business action to create a more sustainable world.”


Sterling Energy


Sterling Energy has announced that the Company has been informed that that Waterford Finance & Investment Limited and Mistyvale Limited have agreed to sell their shareholdings in the Company (representing 29.23% and 15.66% of the issued share capital respectively) via a placing with institutions and High Net Worth Investors.


The Company also confirm that it has provisionally agreed to appoint Paul McDade, the former CEO of Tullow Oil PLC, and Ian Cloke, the former EVP at Tullow Oil plc, as executive directors of the Company. Paul and Ian have extensive experience and knowledge of identifying and developing oil and gas assets in West Africa and intend to refocus the Company’s strategy on producing assets in this region.


I have had an opportunity to have a chat with Paul McDade this morning and he is understandably excited about Sterling as a vehicle for a substantial acquisition programme in coming months and years. His and Ian’s knowledge of the area mean that assets coming available from majors shedding unwanted parts of the portfolio can be assessed swiftly.


I would expect to see them looking at mature producing assets with potential to scale-up and able to be financed with a mixture of debt or equity. It seems that the existing major holders and those involved in the placing have signed up to this policy. Sterling is a clean operation with only the Odewayne Block in Somaliland remaining, itself fully carried by Genel.


This is early days for the new Sterling but I am sure that it has every chance of being a success, to almost quote one of the investors it is a properly grown-up opportunity and can consider itself a fair chance in the Bucket list.


And finally…


It is the Australian Open Tennis Final weekend and after all the Covid problems the Ladies final is between Osaka and Brady and Djokovic and Medvedev.


Last night in the Boropa Cup their were wins for the Red Devils, Spurs and the Gers and draws for the Gooners and the Foxes.


This weekend tonight in the Prem Wolves host Leeds, tomorrow the Saints host Chelski, the Baggies visit Burnley, the Cottagers host the Blades and in a fascinating derby the Toffees entertain Liverpool. Sunday sees a huge London derby as Spurs go to the Hammers, Villa host the Foxes, the Gooners host the Noisy Neighbours and the Magpies go to the Theatre of Dreams.


Plenty of racing to make up for the bad weather recently and lack of Cheltenham preparations, tomorrow it’s Ascot, Wincanton and Haydock and Sunday sees Market Rasen and Uttoxeter.

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