United Oil & Gas PLC (AIM:UOG) told investors that full-year production for 2021 was slightly above guidance, whilst highlighted that new wells added in the year quickly added revenue to the company.
Production averaged 2,327 boepd in the year, versus a guidance range of 2,100 to 2,300 boepd, the company noted in an update ahead of financial results due in April.
Revenue for the year was approximately US$19mln, with the average sale price marked at US$68.90 per barrel (equating to a US$1.85 discount to Brent during the period). United said it collected some US$17.3mln of cash, had US$5.5mln of capital spending and as of January 3 had a US$1.2mln cash balance.
A total of five wells came online for production in the company’s 22% owned Abu Sennan asset, operated by Kuwait Energy, and United noted that all five are expected to achieve ‘pay back’ between three to twelve months of coming online.
"United and its JV partners had a 100% success rate for the five exploration and development wells in the 2021 drilling campaign in Egypt,” said chief executive Brian Larkin.
“Our fully funded 2022 Egypt drilling programme has commenced with the ASD-2 development well which has spud.
“The two exploration wells in the 2022 programme will be targeting a potential of more than 10mmbbls of gross mean recoverable resources, with the potential to provide a step up in production levels during a time of significantly increased commodity prices.”
Elsewhere in United’s portfolio, in Jamaica, an amendment to a Production Sharing Agreement has received final signature from government officials and will now be extended to January 2024.
The company has divested non-core assets in UK and Italy.
Larkin added: “We have a low-cost producing asset base significantly leveraged to the rising oil price and continue to evaluate new opportunities to grow the business in line with our strategy.
“We look forward to the coming year and growing the business via our existing portfolio and potential new acquisitions."