United Oil & Gas PLC (AIM:UOG) shares fell 16% in Wednesday’s early deals after the company revealed disappointing results from its latest exploration well in Egypt, ASW-1X, which failed to find hydrocarbons.
The company, in a statement, said the well, which was drilled down to 3,640 metres, encountered its targets but log data did not indicate the presence of hydrocarbons in this location. It noted that the drilling was completed 10 days ahead of schedule and was under budget.
United is now plugging and abandoning the ASW-1X well, before the rig drills the first well in United’s 2023 programme – the company said it will now provide further details of its drill plans later this month.
"Although the results of the ASW-1X well are disappointing, the JV partners are positive about the remaining prospectivity on the licence and will continue to deliver the maximum value from it,” said chief executive Brian Larkin.
“We are looking forward to the 2023 drilling campaign, which will initially focus on further development of the asset by the drilling of ASH-8 followed by the ASD-3 well.”
“These development wells are targeting the most prolific areas of the Abu Sennan licence, to maximise production before the drilling of at least one further exploration well in Abu Sennan later in the year.”
In London, United shares traded down to 0.93p in early deals, before recouping the worst of the losses and by 9:20am were close to 6% lower at 1.2p each.