TIDMUOG
RNS Number : 3690G
United Oil & Gas PLC
26 July 2021
United Oil & Gas PLC / Index: AIM / Epic: UOG / Sector: Oil
& Gas
26 July 2021
United Oil and Gas plc
("United" or "the Company")
H1 2021 Trading Statement and Operational Update
United Oil & Gas PLC (AIM: "UOG"), the growing oil and gas
company with a portfolio of production, development, exploration
and appraisal assets, issues the following trading and operational
update in respect of the half year to the end of June 2021. This is
in advance of the Group's Interim Results which are expected to be
released in early September 2021. The information contained herein
has not been audited and may be subject to further review and
amendment.
United Chief Executive Officer, Brian Larkin commented:
"Through execution of our planned work programme, the first half
of 2021 has produced exceptional operational and financial success.
In addition, we have created significant new opportunities as well
as reinforced the balance sheet strength of the Company.
"In particular, our Egyptian assets continue to perform beyond
expectations, with production averaging 2,730 boepd; consistent
with full year guidance range of between 2,500 to 2,700 boepd.
Further, through our H1 drilling programme, we have not only been
able to increase production, but also identify new growth
opportunities within the licence. Based on this success, we are
delighted to be drilling a further exploration well on the licence
shortly and are actively working with Joint Venture Partners to
agree the optimum long-term strategy for the development of the
licence's potential.
"The outlook for the business remains encouraging and we remain
well positioned for further success".
Operational Highlights:
-- Q2/21 Group working interest production averaged 2,937 boepd,
yielding a H1/21 average of 2,730 boepd, ahead of H1 guidance of
2,300 to 2,500 boepd and in line with full-year guidance of between
2,500 and 2,700 boepd
o This represents an uplift of 17% compared to H2 2020, when
production averaged 2,340 boepd, and has been driven by the
drilling and workover success on the ASH Field, as well as the
exploration success at ASD-1X
-- Highly successful H1 drilling campaign, with the Abu Sennan
Licence continually performing above the company's expectations
o ASH 3 - Significant success at the ASH-3 Development Well
which came onstream at a gross rate of over 4,000 boepd on 5th
March (880 boepd net to United)
o ASD1-X - Commercial discovery announced on 4th May, with gross
rates of over 1,200 bopd achieved on test. Development lease
approval and commencement of production occurred on 26(th) May,
with the well averaging over 600 bopd (132 bopd net to United) to
the end of June
o Al Jahraa 8 Development Well (post period end) encountered
over 40m of net oil pay across three different reservoir units.
Preliminary results indicate over 30m of net pay in the Upper and
Lower Bahariya reservoirs, significantly above pre-drill
expectations.
o ASH-1ST2 workover completed during May increased production
from the well from 200 bopd to over 1,200 bopd (256 bopd net to
United)
-- As previously noted, an additional fully funded exploration
well (ASX-1X) has now been added to the drilling schedule,
following the significant success of the 2021 drilling campaign
-- In Jamaica, our work on updating the regional source rock
story and quantifying the basin-wide potential was completed in Q1,
and the formal farm-out campaign for the Walton Morant licence
commenced in early April, with a number of companies currently
conducting evaluations
o The Walton Morant Licence contains over 2.4 billion barrels
unrisked mean prospective resources identified across the licence
area. The high-impact Colibri prospect alone contains mean
prospective resources of 406 mmbbls
-- In Italy, in early April the Government granted Environmental
approval for the development of the Selva natural gas field
concession - a key milestone on the road to achieving first gas
Financial Update
-- Revenue for the first half of 2021 is expected to be c. $10.3m-10.5* million,
-- Realised oil price of c. $63.10/bbl
-- Group Cash Balance of c. $2.0 million at 30 June 2021
-- Total Cash Collections of c. $8.2 million
-- Cash Capital Expenditure of c. $3.0million
o c. $2.2 million invested in the Abu Sennan drilling campaign
and workover activities
o c. $0.2 million invested in our Jamaican, Italian and UK
assets
* 22% working interest net of Government Take
2021 Guidance
-- Group working interest production in Egypt for the full year
is forecasted to average between 2,500 and 2,700 boepd, reflecting
the continued good performance from Abu Sennan and the drilling
successes that were achieved in H1 2021
-- Group Cash Capital Expenditure for the full year is
forecasted to be $7.2 million, fully funded from existing
operations
o c. $6.5 million to be invested in Egypt with four wells, five
workovers, and facilities upgrades
o c. $0.7 million to be invested in our Jamaican, Italian and UK
assets
-- Discussions are continuing with partners on the 2022 drilling
programme and the longer-term plans for accessing the significant
long term upside reserves and production potential of Abu
Sennan.
-- A milestone payment of $2.85m relating to the divestment of
licence P2366 containing the Crown discovery is due from Anasuria
Hibiscus UK Ltd ("AHUK"), within 7 days of approval of the Marigold
field development plan by the UK Oil and Gas Authority ("OGA")
o The OGA has requested that AHUK work with Ithaca Energy
Limited ("Ithaca"), holder of Licence P2158 Block 15/18b, which is
adjacent to the Marigold field and contains the Yeoman discovery,
to propose a common development solution for the resources found in
both licences. Ithaca and AHUK have agreed to jointly develop the
reserves in Marigold and Yeoman.
o A decision on the development concept is expected to be made
during the third quarter, at which point an update on the field
development plan submission and guidance on anticipated receipt of
the Crown disposal milestone payment will be provided.
Outlook:
-- As we continue to build on the success of the Abu Sennan
asset , we will work to progress the Jamaican farm out process
whilst optimising further value from the portfolio.
-- Our balance sheet and income remain strong, and we maintain a
disciplined approach to capital allocation, ensuring all ongoing
operations continue to be funded by operating cashflow.
Glossary:
bbl - barrel
boepd - barrels of oil equivalent per day
mmbbls - million barrels
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR") as it forms
part of UK Domestic Law by virtue of the European Union
(Withdrawal) Act 2018 ("UK MAR").
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
Murray (PR Advisor) +353 (0) 87 6909735
Joe Heron jheron@murrayconsultants.ie
Camarco (Financial PR/IR)
Billy Clegg +44 (0) 20 3757 4983
James Crothers uog@camarco.co.uk
Notes to Editors
United Oil & Gas is a high growth oil and gas company with a
portfolio of low-risk, cash generative production, development,
appraisal and exploration assets across Egypt, UK, Italy and a high
impact exploration licence in Jamaica.
The business is led by an experienced management team with a
strong track record of growing full cycle businesses, partnered
with established industry players and is well positioned to deliver
future growth through portfolio optimisation and targeted
acquisitions.
United Oil & Gas is listed on the AIM market of the London
Stock Exchange. For further information on United Oil and Gas
please visit https://www.uogplc.com/
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