UK Oil & Gas PLC (LON:UKOG) told investors that it expect production from the Horse Hill project to remain profitable for the company, at the current Brent oil price, as it has implemented material cost savings across its organisation.
It better positions the company to take full advantage of any post-pandemic oil price increase and related growth opportunities, UKOG said.
The company noted that it had negotiated a series of longer-term key equipment and services contracts at reduced rates.
According to UKOG, the Horse Hill operation has an operating cost of US$12 per barrel, though including tanker, sales and marketing costs increase the price to US$17.
Horse Hill production is currently 300 barrels of dry oil per day, UKOG said.
UKOG raised £1.27mln with the issue of 637.5mln new shares priced at 0.2p in a share placing arranged by WH Ireland.