United Oil & Gas expects to report a drop in revenues to $6.4 million for the first half of 2023, down from $9.8 million in the same period last year. The company attributed this to lower realized oil prices, which averaged around $78 per barrel versus $105 last year.
United Oil & Gas shares were down over 23% at the time of writing on Tuesday and have given up 36% of their value over the past year.
In terms of production, output from the Abu Sennan Licence in Egypt averaged 1,051 barrels of oil per day in H1 2023 (net to United’s 22% working interest), with an additional 93 barrels of oil equivalent per day of gas. Two new development wells came online in Q1 and Q2, helping boost output. However, the ASH-8 well has seen declining production after initial high rates.
Additional drilling is planned for H2 2023, including an exploration well in the ASM prospect. In the UK, United continues to progress plans for the Maria discovery and Waddock Cross field, with potential drilling in 2024. The company also seeks farm-in partners for exploration in Jamaica.
While revenues were down, United said cash collections remained strong at $7 million. However, repatriation of funds from Egypt has become more difficult and costly due to macroeconomic challenges and reduced USD liquidity. The company continues to manage its working capital position.
Brian Larkin, United Chief Executive Officer, commented:
“We have had a strong start to the first half of the year from our Egyptian drilling programme with two successful development wells coming onstream and positive results from our low cost workover programme. We are cognisant of the short term challenges in Egypt and with this in mind are delighted to continue drilling in the second half, initially targeting one exploration and one appraisal well In this highly prospective licence. We look forward to announcing further details in due course.
“In parallel, we remain focused on securing a partner in Jamaica for this potentially transformational licence and we are delighted to have multiple quality potential partners advancing their evaluation of the project. We look forward to the remainder of the year and updating our shareholders on our progress.”