Press

United Oil & Gas AGM Statement

Posted by OilVoice Press - OilVoice

25-Jun-2018


United Oil & Gas Plc (‘United' or 'the Company'), the London Stock Exchange listed oil and gas exploration and development company, is holding its Annual General Meeting (‘AGM') later today.  At the meeting, Chief Executive Officer Brian Larkin will make the following statement:

“When we release an RNS, a table is often included at the end of the announcement detailing the licences in which United has an interest.  Today this table can be found at the beginning, as it neatly encapsulates both the strategy that has been put in place and progress that has been made since the Company was readmitted to the London Stock Exchange's Main Market as United Oil & Gas on 31 July 2017.

Country

Licence

Operator

United Interest

Italy

Podere Gallina Licence

Po Valley Energy Limited

20%

United Kingdom

Waddock Cross Field

Egdon Resources UK Limited

26.25%

United Kingdom

PL090 Exploration

Egdon Resources UK Limited

18.95%

United Kingdom

P1918

Corallian Energy Limited

10%

United Kingdom

PEDL 330

Corallian Energy Limited

10%

United Kingdom

PEDL 345

Corallian Energy Limited

10%

Jamaica

Walton-Morant

Tullow Jamaica Ltd

20%

“Twelve months ago, this table comprised just two rows: the Waddock Cross Field and the PL090 Licence.  As the table shows, we have been highly active during the intervening period, adding five more licences, all of which support our objective of building a multi-stage portfolio of low-risk development and appraisal assets in Europe, and high-impact exploration licences in Latin America, the Caribbean and Africa. Shortly, the table will also include our two new licences awarded in UK Licencing Round 30, including the Crown Discovery.   The common thread that connects all of our licences is that they each have a clear line of sight towards near-term, high-impact activity centred on unlocking untapped value. 

“Our focus is to expose our shareholders to multiple opportunities with significant re-rating potential. Already, our portfolio has benefited from one such opportunity at the Podere Gallina licence in the Po Valley, Italy.  United's farm-in to a 20% interest in the licence only became unconditional on our readmission in July 2017.  Less than six months later, we participated in the drilling of a successful well which encountered 41m of net gas pay.  Strong gas flows in testing subsequently confirmed a significant commercial discovery had been made.  With mid-case gross recoverable volumes estimated at 525MScm (~18Bcf / 3mmboe), we, along with our partners, are keen to monetise this discovery as soon as possible and, in line with this, we recently announced that development planning for a facility capable of producing up to 150,000 cubic metres of gas per day is underway and that an application for an Exploitation Licence has been submitted to the Italian authorities.  In line with this, a 3D seismic programme is proposed for late 2018 / 2019 to progress additional targets within the licence, potentially exposing our shareholders to further significant upside. This exploration potential is what initially attracted us to this licence.

“Activity to unlock near-term value is not confined to Italy.  Later this year, in the UK, a well is planned to be drilled targeting the Colter Discovery in the Wessex Basin.  Colter is a fault-block immediately to the south of Wytch Farm, Europe's largest onshore oil field which has, to date, produced in excess of 450mmbbls. Colter was discovered by Well 98/11-3 in 1986 and has been assigned gross unrisked mid-case oil Contingent Resources of 4.1mmbbls.  However, the new well will be drilled in an area updip of the existing Sherwood Sandstone discovery, targeting the rest of the structure extending to the west which has been assigned gross unrisked mean-case oil Prospective Resources of 15mmbbls.

“Elsewhere in the UK, work continues at the Waddock Cross Field with a view to drilling a well in H1 2019.  Waddock Cross is a shallow field, comprising a ~600m subsurface with a large in-place volume of oil (29 million barrels gross) and unrisked net 2C resources of 320,000bbls.  The field was brought into production in 2013 however, due to a higher than anticipated water-cut, the field was shut-in.  Seismic data has since provided greater confidence on the structural mapping, and modelling suggests drilling into the crest of the structure could deliver a gross flow rate of over 200bopd.

“While our licences in the UK and Italy tick the development and appraisal box, our 20% interest in the Tullow Oil-operated Walton Morant licence, offshore Jamaica, provides us with exposure to high risk and high reward exploration with huge re-rating potential.  Covering an area of 32,000km2, the licence holds multiple plays and prospects in three separate basins, including the high-grade 200mmbbls Colibri prospect.  Despite this being an underexplored region, out of the 11 wells that have been drilled to date on and offshore Jamaica, and despite challenges with well placement due to a lack of seismic control, 10 encountered hydrocarbon shows.  Together with the identification of oil-prone source rocks in the Eocene and in the Cretaceous, and the presence of migrant oil in onshore seeps, wells, and outcrop samples, there is clear evidence that all the elements required for a working petroleum system are in place.  We are keen to prove this up and, following the acquisition of 2,250km2 3D seismic data over an area of the licence that covers Colibri in May 2018, the acquired data is currently being processed and interpreted ahead of a drill-or-drop decision in 2019. 

“Five new licences acquired.  One well drilled in Italy resulting in a significant commercial gas discovery.  3D seismic acquired over a 200mmbbl prospect offshore Jamaica.  Two highly prospective blocks in the Central North Sea, including the Crown Discovery which could contain up to 16 million barrels of recoverable oil, provisionally awarded. The last twelve months have been a highly active, successful and rewarding period for United.

“Shareholders can expect more of the same in the year ahead, as we work with our partners to bring the commercial gas discovery in Italy into production; drill at least one well in the UK; and de-risk the company-making prospectivity, offshore Jamaica.  In tandem with this, we continue to evaluate new opportunities which match our investment criteria as we look to deliver on our objective to expose our shareholders to a growing pipeline of near-term opportunities with significant re-rating potential.

“I would like to thank shareholders for their support and I along with the rest of the team, look forward to further delivering on the potential we have created.”



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