TIDMUOG
RNS Number : 2836G
United Oil & Gas PLC
18 July 2023
United Oil & Gas PLC / Index: AIM / Epic: UOG / Sector: Oil
& Gas
18 July 2023
United Oil & Gas plc
("United" or "the Company")
Half Year 2023 Trading and Operations update
United Oil & Gas Plc (AIM: "UOG"), the full-cycle oil and
gas company with a portfolio of production, development,
exploration and appraisal assets , issues the following trading and
operations update summarising recent operational activities,
providing trading guidance in respect of the half year to 30 June
2023. This is in advance of the Company's half year results which
will be released in September. The information contained herein has
not been audited and may be subject to further review and
amendment.
Egypt, Abu Sennan (22% non-operated working interest, operated
by Kuwait Energy Egypt)
H1 2023 Production
Oil production from the Abu Sennan Licence in H1 2023 averaged
1,051 bopd (net to United's 22% working interest) with an
additional 93 boepd net gas. The exit rate from the quarter was
1,011 bopd net, plus 111 boepd net gas.
2023 Work Programme
Two development wells, ASH-8 and ASD-3, were drilled in the
first half of the year. Both of these wells were successful and
came onstream in March and May respectively.
In parallel to the development drilling, a number of workovers
have also been completed, and have enhanced production from
existing wells through low-cost interventions. Further workovers
are planned as we continue through the second half of 2023.
After producing for a number of months at rates in excess of
2,800 bopd (616 bopd net), production from the ASH-8 well is now
declining. This is in line with expectations and the performance of
the other production wells in the ASH Field. Based on our previous
experience of the field, the impact of the decline is expected to
be partially mitigated by the installation of artificial lift in
the well during H2, and by continued production-enhancing workover
activity across the Abu Sennan Licence.
Additional drilling in H2 2023 has now been agreed by the JV
partners and is expected to commence in September. An exciting
exploration prospect, ASM, lying to the south of the prolific ASD
Field has been approved for exploration drilling, and following on
from the success of ASH-8, an additional target within the ASH
Field has been identified for further appraisal. Further details on
the timing and order of the H2 drilling programme will be announced
in due course.
UK Central North Sea, Maria Discovery, Licence P2519 (100%
working interest)
On 18 May United announced it had agreed to grant a further
extension of the long stop date of the Asset Purchase Agreement
(the "APA") with Quattro for the sale of the Company's interest in
the Maria licence to 31 July to provide sufficient time for Quattro
to meet the funding requirement under the APA. The parties have
agreed that a further extension may be required for all conditions
precedent to be met to allow completion of the sale, namely
regulatory approvals to enable the transfer of funds to United, and
the licence assignment to Quattro. The Company understands that
Quattro have appointed a Canadian broker, Research Capital
Corporation, and plan to conduct a marketing and accelerated book
build process in July, primarily targeting Canadian based
investors. Although there is no guarantee that the sale will
complete, United continues to believe that the sale to Quattro on
the current agreed terms remains the best option for United to
realise value for its shareholders.
UK Onshore, Licence PL090 (26.25% non-operated working interest,
operated by Egdon Resources UK Ltd)
Licence PL090 contains the shut-in Waddock Cross Field, situated
in the onshore Wessex Basin, UK. Work continues on securing
planning and permitting consents, finalising the site facilities
and well designs, ahead of a potential 2024 drilling campaign.
Although Waddock Cross remains non-core to United, there is clearly
value within this asset, and United will continue to evaluate all
the options for realising this potential, including the option of
participating in a well in 2024.
Jamaica, Walton Morant Licence (100% working interest)
The farm-out campaign remains a key focus for United, as we seek
to take this potentially transformational project forward into the
next phase of the Licence. In order to do so, a commitment to drill
a well will need to be made by end January 2024.
We have continued to engage with potential partners to
participate alongside us in drilling this exploration well, and
earlier in the year, a deadline for indicative offers had been set
for the end of H1. We are encouraged by the number and quality of
companies that are in the process of completing their evaluations,
and as they have requested additional time, we have agreed to
extend the deadline. Additional updates will be provided in due
course.
1H 2023 Financial Summary
Revenues for the first half of the year are expected to be $6.4m
(2022 H1 $9.8m), with the average realised oil price per barrel
from Egypt achieved of approximately $78 (2022 H1 $105). Our cash
balance as at 30 June was approximately $0.55m (2022: $3.8m) and
whilst cash collections in the period remained strong at $7m (2022
H1 $8.7m), the continued impact of the macro-economic challenges
affecting the Egyptian economy has resulted in increasing
difficulty and foreign exchange cost to repatriate funds from our
Egyptian operations. Although we have received USD payments in H1
and successfully repatriated funds directly, we have also incurred
significant additional foreign exchange costs when translating EGP
to USD for working capital needs. Notwithstanding these short-term
challenges due to reduced USD liquidity in Egypt, we continue to
manage our working capital position across the group.
United Chief Executive Officer, Brian Larkin commented:
" We have had a strong start to the first half of the year from
our Egyptian drilling programme with two successful development
wells coming onstream and positive results from our low cost
workover programme. We are cognisant of the short term challenges
in Egypt and with this in mind are delighted to continue drilling
in the second half, initially targeting one exploration and one
appraisal well In this highly prospective licence. We look forward
to announcing further details in due course.
"In parallel, we remain focused on securing a partner in Jamaica
for this potentially transformational licence and we are delighted
to have multiple quality potential partners advancing their
evaluation of the project. We look forward to the remainder of the
year and updating our shareholders on our progress."
END
Jonathan Leather, an Executive Director of the Company, who has
over 20 years of relevant experience in the oil and gas industry,
has reviewed and approved the information contained in this
announcement. Dr Jonathan Leather is a qualified person as defined
in the guidance note for Mining Oil & Gas Companies of the
London Stock Exchange and is a member of the Society of Petroleum
Engineers.
This announcement contains inside information for the purposes
of Article 7 of Regulation 2014/596/EU which is part of domestic UK
law pursuant to the Market Abuse (Amendment) (EU Exit) regulations
(SI 2019/310).
Glossary:
BOPD - barrels of oil per day
BOEPD - barrels of oil equivalent per day
EGP - Egyptian pound
JV - Joint Venture partners
H1- first half
USD - US Dollar
Enquiries
United Oil & Gas Plc (Company)
Brian Larkin, CEO brian.larkin@uogplc.com
Peter Dunne, CFO Peter.dunne@uogplc.com
Beaumont Cornish Limited (Nominated
Adviser)
Roland Cornish | Felicity Geidt
| Asia Szusciak +44 (0) 20 7628 3396
Tennyson Securities (Joint Broker)
Peter Krens +44 (0) 020 7186 9030
Optiva Securities Limited (Joint
Broker)
Christian Dennis +44 (0) 20 3137 1902
Camarco (Financial PR)
Georgia Edmonds | Emily Hall
| Sam Morris +44 (0) 20 3757 4983
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 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 www.uogplc.com
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END
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