United Oil and Gas PLC (LON:UOG) have told the market that they are pleased with their prospect of their new investment in Egypt.
The firm said that the testing performance of a soon to be acquired well in Egypt has justified the investment.
Just before Christmas, United Oil and Gas outlined their intentions to acquire Rockhopper Egypt Ltd from Rockhopper Exploration PLC (LON:RKH).
United updated the market by saying that they had conditionally raised $6.3 million to part fund their purchase.
United Oil and Gas undertook a conditional equity offer, raising $6.3 million gross through the issue of 159.0 million new shares at 3 pence per share.
Additionally, 150.6 million were conditionally places by brokers Optiva Securities and Cenkos Securities PLC (LON:CNKS).
Today, United have updated the market about the prospect of their new acquisition.
The ASH-2 well on Abu Sennan came on stream on January 2, and has “consistently” been producing at over 3,000 barrels of oil per day, equating to 660 barrels net to Rockhopper.
The firm also said that gross production from the entire Abu Sennan licence since ASH-2 came online has been 8,000 barrels of oil equivalent per day on average, of which 1,760 barrels is net to Rockhopper.
Brian Larkin CEO, United Oil and Gas PLC:
“As the test results to date on the ASH-2 well demonstrate, Abu Sennan is a producing asset with considerable upside potential. At the effective date of the Acquisition (1st January 2019), production attributable to Rockhopper’s 22% interest in Abu Sennan was c. 800 boepd. Today it stands at c.1,760 boepd. While the interpretation of the data is continuing, it is clear that the intersected reservoirs have excellent production capacity. With this in mind, we are looking forward to completing this transformational Acquisition and working with our soon-to-be joint venture partners to optimise the field development plan for Abu Sennan. This includes a multi-well infill drill programme that is expected to commence shortly with the El Salmiya 5 well.
“I would like to thank our existing shareholders, the incoming investors and BP who continue to support what will be a transformational deal for our company. Together with receipt of environmental approval for the development of the Selva Gas field in Italy and the extension of the Tullow-operated Production Sharing Agreement on the Walton Morant Licence offshore Jamaica, 2020 has got off to an excellent start. I look forward to providing further updates on our progress in the weeks and months ahead. ”
United agree deal with Tullow
United Oil and Gas last week also agreed an extended deal with Tullow Oil (LON:TLW) for operations in Jamaica.
The two parties have furthered talks for the Walton Morant offshore asset in Jamaica.
United holds a 20% interest in Walton, and said that the initial exploration period with
Tullow has been extended to July 31 as it was due to expire at the end of this month.
Tullow on the other hand hold the remaining 80% stake, and have the ultimatum as to whether they would “drill or drop” the asset.
At the Colibiri project, United Oil have expressed interest that the joint venture will bring an additional partner to drill in 2021.
Shareholders of United should remain confident for when operations do commence in Egypt and from today’s update there could be a lot more to come.
Shares in United Oil and Gas trade at 3p (+5.32%). 22/1/20 12:31BST.