United Oil & Gas PLC El Salmiya-5 Well Results (8303O)
June 03 2020 - 6:17AM
UK Regulatory
TIDMUOG
RNS Number : 8303O
United Oil & Gas PLC
03 June 2020
3 June 2020+BCL
United Oil & Gas PLC ("United" or the "Company")
El Salmiya-5 Well Results
Highlights
-- Total of over 120m net pay across four hydrocarbon-bearing
intervals encountered by El Salmiyah-5 well on Abu Sennan
concession - main target potentially materially larger than
previously believed
-- Flow rates of 4,100 bopd, with 18 mmscf/d gas (c. 8,700 boepd
in total) achieved from Kharita Reservoir during well-testing
-- United's net production from the Abu Sennan asset as a whole
likely to rise to over 2,500 boepd in the coming weeks
United Oil & Gas Plc (AIM: "UOG"), the AIM listed oil and
gas exploration, development and production company, is pleased to
provide the following update on the El Salmiyah-5 development well
('El Salmiyah-5' or the 'Well') on the Abu Sennan concession, Egypt
("Abu Sennan") in which UOG holds a 22% working interest. Early
analysis of logging and testing suggests that the Well
significantly exceeds pre - drill estimates, further building on
the success of the last 12 months which has seen UOG's share of
production increase significantly.
El Salmiyah-5
El Salmiyah-5 was spudded on 3 February 2020, and reached total
depth of 4,400m MD (3,911m TVDSS) on 17 April 2020. The Well was
targeting previously undrained reservoirs of the El Salmiyah Field,
with the primary focus being the Kharita Formation, and secondary
objectives in the Abu Roash C and Abu Roash E. After logging,
testing, and completion, the rig was released on 21 May 2020.
Net pay was encountered in all of the targeted intervals,
totalling in excess of 120m for the Well and exceeding pre-drill
expectations significantly. The main Kharita target interval was
encountered some 16m shallow to prognosis, indicating a larger than
expected undrained area updip of the existing wells in the field.
This was further supported by the encouraging well-test results,
which achieved flow rates of 4,100 bopd, with a further 18 mmscf/d
gas (c. 8,700 boepd in total).
W ith further testing planned, it would be premature to draw any
further conclusions on the oil volumes associated with the Well.
United's expectations are that although the Well may initially be
brought onstream close to the headline test rate, in the
longer-term, it is likely to be choked back to lower levels for
sustainable production through the existing facilities. Production
from El Salmiyah-5 is expected to generate solid operating margins
even at low oil price levels due to Abu Sennan's low operating
costs of around $6.5/bbl.
Brian Larkin CEO, United Oil & Gas Plc:
"As a development well into a known field, the El Salmiyah-5
well was always expected to encounter hydrocarbons. However, with a
headline figure of c. 8,700 boepd achieved on test from the primary
target in the Kharita, it is fair to say the results have
significantly exceeded our pre-drill expectations.
When coupled with the outstanding result from the ASH-2 well,
which was announced in January, and which is still producing at
over 3,000 bopd, from a production point of view, the timing of our
entry into the Abu Sennan licence could not have been better. The
Well result is a further realisation of the value we identified in
the licence, and is likely to lead to our net production levels
from the licence rising to over 2,500 boepd in the coming weeks - a
significant increase from January 2019, the effective date of the
purchase of the asset. Importantly, with operating costs of around
$6.5/bbl, this production is highly profitable at today's oil
prices.
We firmly believe there is significant additional potential
across the Abu Sennan licence - and with further development going
ahead to bring gas from the ASH field into production this year,
and with a deferred drilling programme ready to be re-instated
should market conditions improve, we are looking forward to further
activity and newsflow from the asset."
**ENDS**
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Qualified Person's Statement
Jonathan Leather, an Executive Director of the Company, who has
over 20 years of relevant experience in the oil and gas industry,
has approved the information contained in this announcement. Dr.
Jonathan Leather is a member of the Petroleum Exploration Society
of Great Britain and the Society of Petroleum Engineers.
Note: All references to flow rates set out above are gross
unless otherwise stated
Glossary: bopd - barrels of oil per day
boepd - barrels of oil equivalent per day
mmscf - million standard cubic feet per day
United Oil & Gas Plc (Company)
Brian Larkin, CEO brian.larkin@uogplc.com
Beaumont Cornish Limited (Nominated
Adviser)
Roland Cornish and Felicity Geidt +44 (0) 20 7628 3396
Optiva Securities Limited (Joint
Broker)
Christian Dennis +44 (0) 20 3137 1902
Cenkos Securities Plc (Joint
Broker)
Joe Nally (Corporate Broking) +44 (0) 20 7397 8900
Derrick Lee and Pete Lynch +44 (0) 131 220 6939
Murray (PR Advisor) +353 (0) 87 6909735
Joe Heron jheron@murrayconsultants.ie
St Brides Partners (Financial
PR/IR)
Frank Buhagiar +44 (0) 207 236 1177
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END
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