AIM-listed United Oil & Gas, the oil and gas company with a high impact exploration asset in Jamaica and a development asset in the UK has announced its audited results for the year ended 31 December 2023.
Brian Larkin, CEO, commented:
'2023 was a transitional year for United, starting with the conditional sale of Quattro in January 2023 which ultimately was terminated in November 2023 due to the inability of Quattro to raise the funds to finalise the deal and the licence expiring at the end of November 2023.
Egypt delivered steady production throughout the year with several wells successfully drilled and brought into production. We maintained the record of zero LTI's, TRIR's and only a minor environmental incident.
Due to the declining economic situation in Egypt and the outbreak war in Gaza and the ongoing issues in repatriating USD dollars, the company made the strategic decision to divest from Egypt in late 2023. The company was in advanced discussions with the operator regarding the potential sale of our 22% interest in the Abu Sennan concession. However, the discussions were aborted with the operator following legal advice, notwithstanding attempts to agree a mutual acceptable sale and purchase agreement. In January 2024, we received a default notice for unpaid cashcall of $3.8m from the operator which we did not remedy. This has started a process which will lead to the Company withdrawing from the Abu Sennan Concession.
As we move into 2024, the company was granted a two-year extension to the Jamaican licence which extends it out to 31 January 2026. We appointed a Jamaican country manager in February 2024 to support the current work programme, further strengthening our team focused on Jamaica, Iman Hill was appointed as a consultant in April 2024 to support the progress of the Jamaican project and particularly the farmout of the licence.
The successful £1 million equity placing will allow the United to move with the farmout programme for Jamaica and advance the work programme.
At the start of April 2024, we were granted a five-year extension to the Waddock Cross licence in which we hold 26.25% interest, which allows us to move towards the preparation of drilling a well during 2025.
United is well placed to capitalise on emerging opportunities within the oil and gas market and advance our 2024 work programme aim at delivering long term value to our shareholders aligned with securing a farm out partner in Jamaica and potential acquisition of growth assets.'
Operational summary
- Group full-year 2023 production averaged 1,015 boepd net in line with guidance
- 2023 Egypt work programme completed, consisting of two development wells, two exploration wells, and several workovers
- Safety and the environment: Zero lost time incident frequency rate. A minor environmental spills, no restricted work incidents or medical treatment incidents
- In Jamaica, the completion of additional technical studies that were agreed as part of the licence extension have provided additional positive support to the farm-out process
- Post year end, we received a default notice from the operator for unpaid cash call of $3.8m, which was not remedied and we are in the process of withdrawing from the concession.
Financial summary
- Group revenue (discontinued operations) for full year 2023 was $11.6m(1) (2022 : $15.8m)
- The average realised oil price per barrel from Egypt achieved was approx. $81.38/bbl (2022 : $96.10/bbl)
- Gross profit (discontinued operations) $6.2m (2022: $12.9m)
- Loss after tax ($20.4m) (2022: Profit $2.3m)
- Group Cash balances as at 31 December 2023 were $2.0m with Net cash $0.8m (2022 Cash balances $1.4m : Net Debt $1.5m)
- Cash capital expenditure was $6.2m (2022 : $8.6m)
- Receivables of $2m (2022 : $4.4m) ($50k was received in January 2024 and $1m in April 2024)
(1)22% working interest net of Government Take
Corporate summary
- Resignation of Jonathan Leather as a Director of the Company effective 31 August 2023
- Termination of Quattro sale process, and hand back of Maria Licence to North Sea Transition Authority ('NSTA') November 2023
- Resignation of Peter Dunne from the Company on 31 December 2023 and from the Board and Company Secretary effective 15 December 2023
- Simon Brett appointed as Interim Chief Financial Officer November 2023 and Company Secretary effective 15 December 2023
- Two year licence extension for Walton Morant from the Jamaican Ministry of Science, Energy, Telecommunications and Transport ('MSETT') through to 2026.
- £1m equity raise in March 2024
- Appointment of Iman Hill as consultant for Jamaica & five year licence extension secured for Waddock Cross , onshore UK April 2024
- Settlement agreement terms reached with our Debt provider in May 2024
- The Company initiated a full review of its G&A expenditure in late 2023 and has commenced a programme to reduce these costs in 2024 compared to 2023
Outlook
- Farm-out campaign for the Walton Morant licence, Jamaica, continues to accelerate with the appointment of Iman Hill
- The work programme on Jamaica is being advance with the appointment of the Jamaican Country Manager
- Finalisation of withdrawal from the Abu Sennan Concession
- Continued evaluation of new opportunities in the Greater Mediterranean area, United Kingdom and North and West Africa regions to grow the business in line with the strategy
Source: United Oil & Gas
