The company with the biggest stake in the Wressle oil field has agreed a £1m loan from the site operator, Egdon Resources.

Union Jack Oil announced in a statement to investors this morning the loan would provide it with “additional working capital for general purposes”.

The statement said the loan was secured against Union Jack’s 40% stake in the Wressle licences, PEDL180 and PEDL182, in North Lincolnshire.

Union Jack has previously reported that it was debt free. At the time of writing, shares in the company had fallen 2.78%.

The Wressle well produced an average of 119 barrels of oil per day for Union Jack during 2025, according to annual accounts published last month. The average oil price at the time was US$68.2 per barrel.

Loan terms

Under the loan terms, Union Jack must pay 60% of its free cash flow generated from Wressle each month. This will first be applied to unpaid interest and then to reduce the loan principal.

If free cash flow from Wressle was insufficient, interest for that month would be capitalised and added to the loan balance.

The loan must be repaid in full after 24 months. The interest rate is 5% per year.

Restrictions

The agreement also requires Union Jack to support Egdon’s role as the Wressle operator. Union Jack cannot “vote or act to remove or replace the lender as operator (except in cases of gross misconduct”.

If Union Jack wants to sell its interest in the Wressle licences, Egdon now has the right of first refusal before any third parties are approached. This will last for 12 months after the repayment date.