AIM-listed United Oil & Gas, the full cycle oil and gas company with a portfolio of production, development, exploration and appraisal assets, has announced its unaudited financial and operating results for the half year ended 30 June 2023.
Brian Larkin, CEO commented:
'We are pleased to be able to report progress across our portfolio as we seek to explore further opportunities for growth to deliver greater value to our shareholders.
Looking at Egypt, we successfully drilled and brought 2 development wells onstream during the first half of 2023. Notably, we maintained our excellent safety record throughout these operations. Our active drilling programme continues with the drilling of a further near field exploration well planned for the fourth quarter of the year. Simultaneously, we continue to work with our JV partners to optimise production from our existing well stock through a comprehensive programme of workovers and well intervention activity. Whilst the macroeconomic situation In Egypt remains challenging, we do continue to be paid a portion of our receivables in US dollars.
In Jamaica we are engaged in discussions with the Government and with high-quality potential farm-in partners on our exciting high-impact exploration asset. Identifying a partner with the right skillset to complement our work is of paramount importance to advancing this project and we expect to move forward to commercial discussions with a preferred partner over the coming weeks.
Whilst Quattro have not yet completed their funding process and are likely to require a further extension to the long stop date on the sale agreement for licence P2519, we are hopeful that this transaction will complete over the coming weeks, given the renewed interest in the North Sea
We enter the last quarter of 2023 well placed, and will continue to work hard on delivering on our strategy in order to return value to our shareholders.'
1H 2023 Operational summary
- 1H 2023 Group net 22% working interest production averaged 1,051 bopd and 93 boepd gas with full year average net production forecast to be in the range of 930 to 1,030 boepd.
- In Egypt
- Active drilling programme continues with two wells drilled in 1H, and one additional exploration well planned for H2
- Successful ASH-8 development well brought onstream in March
- Successful ASD-3 development well brought onstream in May
- Zero - Lost Time Incident Frequency rate and Fatal Accident Frequency rate. No environmental spills, Restricted Work Incidents or Medical Treatment Incidents
- We continue to have a portion of our Egyptian receivable balance settled in USD
- In Jamaica, discussions continuing with the Ministry and with potential farm-in partners with commercial discussions with a preferred partner expected to commence in Q4.
- In the UK, whilst the current deadline for completion of the deal with Quattro has been extended to 30th September, this is likely to be extended further as Quattro have not yet completed their funding process.
1H 2023 Financial summary
- Group revenue for the first half of 2023 was $6.4m(1) (1H 2022:$9.8m)
- Realised oil price of $78.19/bbl (1H 2022:$105.5/bbl)
- Gross Profit (excluding Egypt tax gross up) $2.2m (1H 2022: $5.6m)
- Cash Operating Expenses of $10.65/boe (1H 2022: $8.40/boe)
- Profit After Tax of $0.6m (1H 2022: $2.4m)
- Cash collections in the six-month period of $7.0m (1H 2022: $8.7m)
- Repayments on BP Pre-payment facility of $1.2 (1H 2022: $1.6m)
- A 30% reduction in Corporate G&A to $830k (1H 2022: $1.2m) and on target to deliver the 15% full year reduction.
- Group cash balances at period end were $0.6m (1H 2022: $3.8m)
(1) 22% working interest net of Government Take
1H 2023 Corporate summary
- Jonathan Leather, Executive Director and Chief Operating Officer stepped down from the Board on 31 August 2023. Jonathan will continue to provide support to the company on the Jamaican farm out process on a consultancy basis.
Outlook
- In Egypt we look forward to drilling the ASD-S-1X near-field exploration well, which we expect to spud in October. This is an exciting exploration well located to the south of the prolific ASD Field. The well is targeting an estimated gross in-place mean volume of 10.1 million barrels of oil in multiple stacked reservoir targets across the productive Abu Roash and Bahariya reservoirs.
- The ASD-S-1X exploration well will be followed by additional development drilling on the Abu Sennan concession - likely targeting an undrained crestal area that has been identified on the ASH Field.
- In Jamaica, we continue discussions with high-quality potential partners and expect to commence commercial discussions with a preferred party over the coming weeks. We will provide further updates to the markets in due course.
- In the UK, we are looking to complete the transaction with Quattro on the P2519 licence containing the Maria discovery.
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Source: United Oil & Gas
