UK Oil & Gas PLC (UKOG.L) WACC Analysis

As of May 27, 2025, UK Oil & Gas PLC (UKOG.L) carries a Weighted Average Cost of Capital (WACC) of 5.2%. WACC reflects the blended rate UK Oil & Gas PLC must pay to both equity and debt holders.

Within that, the cost of equity is 5.4%, the cost of debt is 5.0%, and the effective tax rate is 19.0%.

Breakdown of WACC Components

• Long-term bond rate: 4.0% – 4.5%
• Equity market risk premium: 6.0% – 7.0%
• Adjusted beta: 0.15 – 0.64
• Additional risk adjustment: 0.5% – 1.0%
• Debt-to-equity ratio: 2.2

What It Means for Investors

With a selected WACC of 5.2%, UK Oil & Gas PLC must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.