TIDMUOG
RNS Number : 8561Q
United Oil & Gas PLC
24 June 2020
24 June 2020
United Oil & Gas PLC ("United" or the "Company")
Abu Sennan Reserves Upgrade, Production Update, and Details of
Investor Call
Highlights
-- 13,900 boepd gross (3,060 boepd net working interest) average
production from the Abu Sennan concession for the first half of
June - a 69% increase compared to average April production (1,810
boepd net)
-- Total production during that period has benefited from the
ongoing testing of the El Salmiya-5 Well, with c. 4,000 bopd and in
excess of 16 MMscf/d (7,200 boepd) contribution from the El Salmiya
Field
-- Independent reserves report by Gaffney Cline & Associates
("Independent Reserves Report") from the end of 2019 indicates an
increase in reserves and contingent resources at Abu Sennan:
o 12.5% increase in Abu Sennan Gross 2P Reserves to 13.5 MMboe
(15% gas) compared to 12 MMboe at the beginning of 2019,
representing a 190% reserves replacement ratio
o Gross 1P reserves up by 76% to 4.2 MMboe and gross 3P reserves
up by 46% to 28.6 MMboe (from 2.4 MMboe and 19.6 MMboe respectively
at the beginning of 2019)
o Gross 2C contingent resource add of 0.73 MMboe
o Reserves upgrade does not include the recent drilling success
at the El Salmiya-5 Well
-- The Company will hold an investor call at 11:00am on Thursday
25 June 2020, the details of which are provided below
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 Abu Sennan concession, Egypt
("Abu Sennan") in which UOG holds a 22% working interest. This
includes a production update covering the first half of June and
the results of an Independent Reserves Report which estimates gross
2P reserves at Abu Sennan increased to 13.5 MMboe from 12 MMboe
over the course of 2019 following drilling success.
Production
Production from the Abu Sennan concession has continued to
outperform the Company's pre-completion expectations, with
production from the first half of June averaging 13,900 boepd gross
(3,060 boepd net). This has been underpinned by strong production
from the El Salmiya-5 well-testing (c. 4,000 bopd and over 16
MMscf/d gross (c. 7,200 boepd) from the El Salmiya Field since the
beginning of June), and continuing consistent production from the
ASH-2 well, which was successfully drilled and brought online in
January 2020. Although it is still early days on the El Salmiya-5
well, and United expect the well to be choked back in order to
optimise ultimate recovery, the results to date have clearly
demonstrated the capacity of the well to deliver high production
rates. Production at Abu Sennan continues to benefit from low
operating costs of c. $6.50/bbl.
Reserves
The results of an Independent Reserves Report that was completed
on the Abu Sennan concession at the end of 2019 by Gaffney, Cline
& Associates, using PRMS definitions for Reserves and
Resources, has now become available to United. The results are
summarised in Table 1, below. The report indicates that gross 2P
reserves have increased to 13.5 MMboe (15% gas) compared to 12
MMboe at the end of 2018. This is an annual increase of 12.5%, and
given that nearly 1.7 MMboe was produced from the Abu Sennan assets
during 2018, indicates a reserves replacement ratio for 2019 of
190%. Gross 1P and 3P reserves have also increased, with 1P
reserves up by 76% to 4.2 MMboe and 3P reserves up by 46% to 28.6
MMboe (from 2.4 MMboe and 19.6 MMboe respectively at the beginning
of 2019).
Applying United's 22% working interest to the gross 2P reserves
at the end of 2019 gives 2.97 MMboe, up from 2.64 MMboe at the end
of 2018.
It is worth noting that although the Independent Reserves Report
included an uplift for the results of the ASH-2 well and the Al
Jahraa gas that was brought onstream in March 2020, it was
completed prior to the results of the El Salmiya-5 well. Similarly,
as the report also predates the approval of the plans to bring the
gas from the ASH field onstream, this gas is only included as
contingent resources, with 2C estimates of 0.73 MMboe gross. These
two developments would almost certainly have a further positive
uplift on reserves.
Table 1. Reconciliation of Abu Sennan Reserves as at 31(st)
December 2019 with Reserves as at 31(st) December 2018
Gross Field Reserves (Mboe)
End 2018 Exploration 2019 Production Revisions End 2019
Adds
---------- ------------- ----------------- ----------- ----------
Proved 2,373 259 -1,647 3,191 4,179
---------- ------------- ----------------- ----------- ----------
Proved + Probable 12,004 702 -1,647 2,463 13,526
---------- ------------- ----------------- ----------- ----------
Proved + Probable
+ Possible 19,624 2,213 -1,647 8,395 28,859
---------- ------------- ----------------- ----------- ----------
Notes:
1. Revisions are due to production performance in 2019, the
results of wells drilled in 2019, and the maturation of the gas
development for Al Jahraa; exploration adds include the AS-Z
discovery and the AR-E, AR-G, Upper Bahariya and Lower Bahariya II
pools discovered by Al Jahraa-7
2. 2019 production is estimated based on actual production to end October 2019
3. Totals may not exactly equal the sum of the individual entries due to rounding
4. United holds a 22% net working interest in the Abu Sennan concession
Jonathan Leather, COO, United Oil & Gas Plc:
"It is really pleasing to see the Abu Sennan assets continuing
to perform so strongly and the potential that we recognised in the
assets being realised. Much as we expect the production at the El
Salmiya-5 well to be choked back from the current levels, it is
fair to say that net production of over 3,000 boepd at this stage
has surpassed even our own high expectations for the Licence.
"We remain highly confident that the Licence has more to offer.
Further development at the ASH field is expected to deliver
additional gas before the end of the year, further enhancing
production and cashflow. We also see substantial exploration
opportunity on the licence and are working towards optimising
targets for further exploration drilling in due course.
"This independent review of reserves should send a clear message
about the strength of the Company's Egyptian assets and, together
with our booked reserves at the Selva field in Italy, serves to
highlight the considerable asset value behind United - a notable
discrepancy when compared to our current market capitalisation. We
look forward to working with our partners to maximise the value of
those reserves for our shareholders."
Investor Call
The Company also announces that, following recent audited
results for the year 2019 and prior to the AGM, which will be a
closed meeting, management will be hosting an investor conference
call at 11:00 a.m. on 25 June 2020. The leadership team will give
an update on the Company and run through a Corporate presentation
as well as answering those shareholder questions submitted prior to
the call. Please submit your questions in advance to email address
investor.relations@uogplc.com .
Should investors wish to participate in the event, please click
on this link to register https://bit.ly/3eusTiR .
Confirmation email with the details of the dialling in process
will be sent to your email address.
Corporate presentation will be made available tomorrow at 10:00
a.m. on www.uogplc.com .
**S**
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For more information please visit the Company's website at
www.uogplc.com or contact:
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
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: '1P' means Proved Reserves
'2P' means Proved plus Probable Reserves
'3P' means Proved plus Probable plus Possible Reserves
Bscf means Billion Cubic Feet
boe means Barrels of oil equivalent
bopd means barrels of oil per day
MMscf/d means million standard cubic feet per day
boepd means barrels of oil equivalent per day
bbl, bbls means barrel, barrels
bbl/d means barrels per day
CPR means competent person's report
M means thousand
MM means million
NPV means net present value
PRMS means the 2018 Petroleum Resource Management System
(SPE)
SPE means Society of Petroleum Engineers
'2C' or 'Contingent resources' means quantities of petroleum
estimated as of a given date, to be potentially recoverable from
known accumulations by application of development projects, but
which are not currently considered commercially recoverable due to
one or more contingencies
'Prospective Resources' means those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations by application of future development
projects. Prospective Resources have both an associated chance of
discovery and a chance of development. They are further subdivided
in accordance with the level of certainty associated with
recoverable estimates assuming their discovery and development and
may be sub-classified based on project maturity.
'Proved Reserves' means those quantities of petroleum which, by
analysis of geological and engineering data, can be estimated with
reasonable certainty to be commercially recoverable, from a given
date forward, from known reservoirs and under current economic
conditions, operating methods, and government regulation - Proved
reserves can be categorized as developed or undeveloped
'Probable Reserves' are those unproved reserves which analysis
of geological and engineering data suggests are more likely than
not to be recoverable. In this context, when probabilistic methods
are used, there should be at least a 50% probability that the
quantities actually recovered will equal or exceed the sum of
estimated proved plus probable reserves
'Possible Reserves' are those unproved reserves which analysis
of geological and engineering data suggests are less likely to be
recoverable than probable reserves. In this context, when
probabilistic methods are used, there should be at least a 10%
probability that the quantities actually recovered will equal or
exceed the sum of estimated proved plus probable plus possible
reserves
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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