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REG - United Oil & Gas PLC - Half Year 2023 Trading and Operations update

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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 (mailto:brian.larkin@uogplc.com)
 Peter Dunne, CFO                                        Peter.dunne@uogplc.com (mailto: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 (http://www.uogplc.com)

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