United Oil & Gas Plc (LON:UOG) said in a statement after Wednesday’s close that it has extended the deadline to complete its acquisition of a 10% stake in Corallian Energy’s interests in southern UK oil and gas assets.
The AIM-quoted group’s option extends to May 31.
Exploration drilling in southern England is seen as a key upcoming catalyst for United Oil & Gas.
READ: United Oil & Gas looking forward to upcoming UK exploration well
In a recent note, broker Optiva Securities indicated that United’s shares could more than double in value if an upcoming English exploration well is successful.
Corallian’s Colter exploration well is due to be drilled in the second quarter of this year.
Optiva analyst, Barney Gray, reckons a discovery could be worth US$40mln or 8.8p per share to United.
Gray’s overall valuation puts the company’s worth at around US$61.7mln which equates to 15p per share (undiluted) - which compares to a current share price of 4.52p.
Colter could be a mini-Wytch Farm
Off the south coast, the Colter well will target an exploration prospect in the vicinity of the Wytch Farm field, Britain’s largest oil operation outside of the North Sea, and ahead of drilling the expectation is that Colter could be similar.
“We’re really excited about it because it could be potentially a mini Wytch Farm,” United chief executive Brian Larkin said recently.
He added: “I think it is a nice exposure for our shareholders. We like the risk profile, it fits with our strategy of low risk, near term activity opportunities in Europe.”
“We’re really excited about it and we’re looking forward to it.”
Larkin explained that a success in the well would be significant for the group’s valuation. He highlighted a recent competent persons assessment of the project which saw the potential for 20mln of recoverable resources.
“It is certainly a material asset to us.”