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United Oil & Gas confirms production and reserves growth in Egypt

The latest impressive well at Abu Sennan is yielding 3,060 boepd net to United, in testing.

United Oil & Gas PLC - United Oil & Gas confirms production and reserves growth in Egypt

United Oil & Gas PLC (LON:UOG) has confirmed production growth in the Abu Sennan asset in Egypt, which yielded 13,900 barrels oil equivalent per day (boepd) in the first half of June.

That gives 3,060 boepd net to United and marks a 69% improvement of 69% compared to April’s output.

It comes as the El Salmiya-5 contributed via test production, with the El Salmiya field output at around 4,000 boepd.

"It is really pleasing to see the Abu Sennan assets continuing to perform so strongly and the potential that we recognised in the assets being realised,” said Jonathan Leather, United chief operating officer.

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“Much as we expect the production at the El Salmiya-5 well to be choked back from the current levels, it is fair to say that net production of over 3,000 boepd at this stage has surpassed even our own high expectations for the licence.”

United also noted that an independent reserves report, authored by Gaffney Cline & Associates, from the end of 2019, indicates an increase in reserves and contingent resources at Abu Sennan.

Proved and probable (2P) reserves increase by 12.5% to 13.5mln barrels – and within that there’s a 76% increase in proved (1P) reserves to 4.2mln barrels – and including ‘possible’ barrels the 3P reserve amounted to 28.85mln barrels.

The company noted that the report includes some uplift for the standout ASH-2 well result and the Al Jahraa gas, which came online in March, it pre-dates the success in the El Salmiya-5 well.

Subsequent developments would almost certainly have a further positive uplift, the company added.

"We remain highly confident that the licence has more to offer,” Leather said.

“Further development at the ASH field is expected to deliver additional gas before the end of the year, further enhancing production and cashflow.

“We also see substantial exploration opportunity on the licence and are working towards optimising targets for further exploration drilling in due course.”

He added: “This independent review of reserves should send a clear message about the strength of the Company's Egyptian assets and, together with our booked reserves at the Selva field in Italy, serves to highlight the considerable asset value behind United - a notable discrepancy when compared to our current market capitalisation.”

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Price: 2.7401 GBX

AIM:UOG
Market: AIM
Market Cap: £17.13 m
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