logo-loader
viewUnited Oil & Gas PLC

United Oil & Gas shares soar as Egypt asset delivers another significant new well

"With a headline figure of c. 8,700 boepd achieved on test from the primary target in the Kharita, it is fair to say the results have significantly exceeded our pre-drill expectations," chief executive Brian Larkin said

United Oil & Gas PLC - United Oil & Gas shares soar as Egypt asset delivers another significant new well

United Oil & Gas PLC (LON:UOG) shares shot up more than 30% on Wednesday as the group revealed the latest successful well result at the Abu Sennan concession in Egypt.

The El Salmiyah-5 well has encountered some 120 metres of net hydrocarbon pay across four intervals which, as United highlighted, makes the main target materially larger than was previously believed.

Testing of the Kharita Reservoir achieved a rate of 8,700 barrels oil equivalent per day, comprising 4,100 barrels of oil equivalent per day (boepd) plus 18mln cubic feet of gas per day, the company said in a statement.

READ: United’s Egypt deal is “gift that keeps on giving”

It is another significant boost to United’s production profile following the recent ASH-2 well success, also at Abu Sennan, and it further amplifies the pay-off from last year’s transformational acquisition of the Rockhopper Egypt business.

United told investors it now expects that its net production from 22% owned Abu Sennan will increase to over 2,500 boepd in the coming weeks, from around 1,700 boepd.

"As a development well into a known field, the El Salmiyah-5 well was always expected to encounter hydrocarbons,” said Brian Larkin, United chief executive.

“However, with a headline figure of c. 8,700 boepd achieved on test from the primary target in the Kharita, it is fair to say the results have significantly exceeded our pre-drill expectations.”

“When coupled with the outstanding result from the ASH-2 well, which was announced in January, and which is still producing at over 3,000 bopd, from a production point of view, the timing of our entry into the Abu Sennan licence could not have been better.”

Larkin added: “Importantly, with operating costs of around US$6.5/bbl, this production is highly profitable at today's oil prices.”

The United boss also said the company believes that Abu Sennan retains “significant additional potential”.

On AIM, United shares surged 0.77p or 36% higher following the well result to trade at 2.9p per share.

United acquired Rockhopper’s Egypt subsidiary in 2019 for US$16mln and by December it was boosted significantly by the ASH-2 well result.

In a recent note, Cenkos analyst James McCormack noted that the deal has transformed the company into a full-cycle E&P, by adding low-cost production.

Quick facts: United Oil & Gas PLC

Price: 2.7 GBX

AIM:UOG
Market: AIM
Market Cap: £16.72 m
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of United Oil & Gas PLC named herein, including the promotion by the Company of United Oil & Gas PLC in any Content on the Site, the Company...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

United Oil & Gas PLC's Brian Larkin reports back on 'big successes' in Egypt

United Oil & Gas PLC's (LON:UOG) Brian Larkin caught up with Proactive London's Andrew Scott after revealing the latest successful well result at the Abu Sennan concession in Egypt. The El Salmiyah-5 well encountered some 120 metres of net hydrocarbon pay across four intervals which...

on 4/6/20

2 min read