AIM-listed United Oil & Gas has issued a corporate update in relation to its Jamaica licence.
Highlights:
- Two-year extension of the Jamaican Walton Morant Licence to 31 January 2026.
- Large 22,400km(2) offshore exploration block situated to the south of the island of Jamaica.
- 2.4 billion bbl (1) of unrisked mean prospective resource potential audited by Gaffney Cline & Associates, including the initial drill ready Colibri prospect of 406 million barrels of unrisked mean prospective resources.
- Attractive fiscal terms and supportive host government.
- Potential NPV10 of c. $23 billion* to United at 100% working interest over the c. 25-year production life of the licence based on successful discovery and development of the 2.4 billion bbl of unrisked mean prospective resource potential.
- Success-case breakeven oil price of c. $25 per bbl*.
- Conventional exploration and potential development techniques, featuring the potential for a low carbon emissions oil development.
- Significant interest from potential industry partners with marketing to scale up considerably following confirmation of licence extension.
Jamaica Update
United Oil and Gas has announced that following the announcement made on 22 January 2024, the Jamaican Ministry of Science, Energy, Telecommunications and Transport ('MSETT') have signed an amendment to the Production Sharing Agreement ('PSA') therefore confirming the extension of the Walton Morant Licence to 31 January 2026.
During this extension, United will undertake additional technical studies including piston core sampling and seismic reprocessing, aimed at further de-risking the petroleum system and better defining the prospects and leads identified on the Licence. With the licence extension confirmed, United can now build confidently on the farmout process carried out to date and re-engage with the recent positive interest that has been shown by other parties in participating in this high impact exploration opportunity, in a region with immense potential.
The Company and its advisors, Energy Advisors Group (Houston, Texas) and Envoi (London, UK), will now continue in efforts to secure a partner, in a market that the Board believes holds renewed interest in exploration opportunities worldwide, driven by the strong future demand for oil and gas.
Outlook for 2024
Following the Company's exit from Egypt, in addition to the focus on the Walton Morant Licence, the Company's strategy for 2024 will focus on the Waddock Cross oil field where the Company holds a 26.25% working interest in Licence PL090.
During 2020, Operator Egdon Resources coordinated the completion of reservoir modelling work on Waddock Cross. The Operator estimates that Waddock Cross contains a significant Stock Tank Oil Initially in Place (STOIIP) gross volume of 57 mmbbls, and that a new horizontal well could yield commercial gross oil production of 500-800 bopd and c. 1 mmbbls recovery per well.
As of 31 October 2023, the Operator Egdon advises that they are progressing plans for restarting production at Waddock Cross and we expect to be able to provide an update to the market in due course.
United Chief Executive Officer, Brian Larkin commented:
'This two-year license extension in Jamaica is a significant next step in our strategy alongside our onshore operations in the UK. The Walton-Morant Licence is a vast exploration area of 22,400km2 that United holds 100% a working interest containing potentially over 2.4 billion barrels of unrisked mean prospective resources including the promising Colibri prospect, which could be worth a potential c. $23 billion* NPV10 to United at 100% working interest on an unrisked success basis. This licence extension enables us to confidently continue our farm-out campaign, seeking a strategic partner to unlock the immense potential in this region.
The Government of Jamaica remains supportive of hydrocarbon exploration and achieving the potential of this Licence. Against the global backdrop of geopolitical instability, exploration and development success on the Licence could be transformational for the nation delivering long-term energy security, generating significant revenue and creating economic opportunities for the nation in line with Jamaica's National Energy Policy.
We will continue to focus on the recent positive interest that has been shown by several parties, and with the extended licence, this is a significant opportunity for the benefit of all stakeholders. I would like to thank the Government of Jamaica for their support and efforts to bring us to this point and we will continue our work programme in 2024.'
(1) 2.4 Bn bbls is UOG's arithmetic sum of the unrisked mean prospective resources for each prospect/lead audited by GCA
(2) NPV10 based on an oil price assumption of US$80 per barrel inflating at 2% annually.
*United management internal figures not externally verified
Source: United Oil & Gas
