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United Oil & Gas boosted by Italian resource upgrade

It confirms 2P reserves, contingent and prospective resources at the Podere Gallina licence.
oil and gas operations
The Selva gas field is set to come online in 2020

United Oil & Gas PLC (LON:UOG) shares rose on Friday after the firm revealed what it described as a significant resource upgrade for its Italian gas project.

An independent consultant, commissioned by project operator Po Valley, has confirmed 13.3bn cubic feet of proved and probable gas reserves at the Podere Gallina licence.

Podere Gallina has now been estimated to host some 14.1bn cubic feet of contingent gas resources while the asset’s un-risked prospective resource has increased by 74% to 91.5bn cubic feet.

READ: United expands portfolio with ‘potentially transformational’ frontier exploration opportunity

The Selva gas field, which is part of the licence area, is on track for first production in 2020 and once up and running the project is expected to yield 150,000 cubic metres of gas per day.

"This latest CPR provides further confirmation of the significant upside on the Podere Gallina licence,” said Brian Larkin, United chief executive.

“This report goes beyond the scope of the recent CPR published by United Oil and Gas and in doing so, greatly enhances our position and our resource calculations.

"The upside identified in this report adds to that previously reported for the recently drilled 13.3bcf Selva Field. This is a low-cost, high-return project, which is continuing to be progressed towards production.”

Larkin highlighted that Selva will deliver significant cash flow which ‘fuel United’s potential for growth’ both in Italy – where the company also has interests in the neighbouring East Selva, Riccardina, and Fondo Perino prospects – and its other ‘low risk’ European assets as well as the ‘transformational’ frontier exploration in South America and Africa.

United O&G owns a 20% economic interest in the licence.

In a note to clients, analysts at SPAngel said: “Regardless of the final timing of the first gas, and we believe that it could also be as late as 2022, the Company's owners should be pleased with the fact that the Company has identified an opportunity and quickly brought it into production.”

In afternoon trading, shares in United O&G were 3% higher at 3.45p.

 -- Adds analyst comment, share price --

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