Commencement of Production from the ASD-2 well

RNS Number : 1558G

United Oil & Gas PLC

28 March 2022

 

United Oil & Gas PLC / Index: AIM / Epic: UOG / Sector: Oil & Gas

28 March 2022

United Oil and Gas Plc

("United" "the Group" or the "Company")

Commencement of Production from the ASD-2 well

United Oil & Gas PLC the growing oil and gas company with a portfolio of production, development, exploration and appraisal assets is pleased to announce an update on the ASD-2 development well in the Abu Sennan licence, onshore Egypt. United holds a 22% working interest in the licence, which is operated by Kuwait Energy Egypt .

Highlights

· The ASD-2 well has commenced production at an initial rate of c. 2,100 bopd gross (c.462 bopd net), significantly above pre-drill expectations

· An exceptionally short turnaround time of just six days from well completion to production and revenue generation for United

·     A rig has been mobilised to drill the second well in the 2022 drilling programme. This is the ASV-1X exploration well which is expected to spud in the coming days

· A fifth firm well has been added to the fully funded 2022 drilling campaign following completion of technical work and a sustained high-oil price

United's Chief Executive Officer, Brian Larkin commented:

"This is another fantastic drilling result, significantly  above our pre-drill expectations. The ASD-2 well is the eighth consecutive successful well at Abu Sennan since we acquired the licence in 2020.  The wells within Abu Sennan have an exceptionally short turnaround time between well completion and commencement of  production - typically a matter of days for development wells. With our production being leveraged to the current higher oil prices, this additional production rapidly generates revenue and cashflow for United.  We have had a great start to the year with the agreement on the Crown milestone payment followed by this impressive drilling result and we look forward to continuing our 2022 drilling programme with the ASV-1X exploration well, due to spud in the coming days. We are also pleased to have added a firm development well to the drilling programme. There remains vast potential in the Abu Sennan licence and against the backdrop of higher commodity prices it is great that the JV partners have the flexibility to optimise the  drilling programme to generate the best returns".

As previously announced, the ASD-2 development well was interpreted to have encountered at least 25.5 metres of net oil pay across the Abu Roash and Bahariya reservoirs.  Twenty metres of high quality net pay was interpreted in the Abu Roash-E (AR-E) reservoir, significantly above pre-drill expectations. The AR-E reservoir was tested with flow rates of 4,076 bopd and 3.1 mmscf/d gas (c. 4,703 boepd gross; 1,035 boepd net) achieved on a 48/64" choke and 2,299 bopd and 1.7 mmscf/d gas (c.2,646 boepd gross; 582 boepd net) achieved on a 32/64" choke.

The well has now been tied into the existing facilities and brought on stream at an initial rate of c. 2,100 bopd gross (462 bopd net) on a 28/64" choke. This is just six days from well completion to production, and this short turnaround time means revenue is rapidly generated for the Company.  The excellent rates achieved on test have demonstrated the potential of the AR-E reservoir at this location. The well will continue to be monitored, so that the long term production potential of the well can be assessed.

2022 Egypt Drilling Programme

Following the completion of the ASD-2 well, the first well in the in the 2022 Abu Sennan drilling campaign, the ECDC-6 rig has been released. The second well to be drilled will be the ASV-1X exploration well.  The Sino Tharwa-1 rig which will be used to drill the ASV-1X well has been mobilised. United estimate that the ASV-1X structure has the potential to hold over 2.5 million barrels gross mean recoverable resources. The well is expected to spud in the coming days.

In response to the sustained high oil-prices and the results of recently completed technical work, the fully funded 2022 drilling programme at Abu Sennan will now include a fifth firm well. The drilling programme had initially included four firm wells and one contingent well, which was dependent on the results of technical studies on the Al Jahraa field. These studies have now been completed, and have led to the Al Jahraa-14 development well (AJ-14) being approved by the Joint Venture partners. AJ-14 will target multiple Abu Roash reservoirs with the aim of accessing additional reserves and accelerating production. It replaces the AJSE-3 water injector that was initially proposed as a contingent well. The AJ-14 well is likely to be the third well of the 2022 campaign, followed by the ASH-5 development well at the ASH field.

United will be releasing its results for the full year ending 31 December 2021 on the 26 April 2022. In advance of this, the Company will provide its usual quarterly production update for Q1 2022.

**ENDS**

Glossary:

bopd - barrels of oil per day

boepd - barrels of oil equivalent per day

choke- device to control the flow of fluids produced from wells.

mmbbls - million barrels of oil

JV Partners- Joint Venture Partners

Jonathan Leather, an Executive Director of the Company, who has over 20 years of relevant experience in the oil and gas industry, has reviewed and approved the information contained in this announcement.  Dr Jonathan Leather is a qualified person as defined in the guidance note for Mining Oil & Gas Companies of the London Stock Exchange and is a member of the Petroleum Exploration Society of Great Britain and the Society of Petroleum Engineers.

This announcement contains inside information for the purposes of Article 7 of Regulation 2014/596/EU which is part of domestic UK law pursuant to the Market Abuse (Amendment) (EU Exit) regulations (SI 2019/310).

Enquiries
United Oil & Gas Plc (Company)
Brian Larkin, CEO	[e-mail]
Sharan Dhami, Head of IR & ESG	[e-mail]
Beaumont Cornish Limited (Nominated Adviser)
Roland Cornish | Felicity Geidt	[phone]
Optiva Securities Limited (Joint Broker)
Christian Dennis	[phone]
Tennyson Securities (Joint Broker)
Peter Krens	[phone]
Camarco (Financial PR)
Billy Clegg  |  James Crothers  | Tessa Gough-Allen	[phone]  | [e-mail]

Notes to Editors

United Oil & Gas is a high growth oil and gas company with a portfolio of low-risk, cash generative production, development, appraisal and exploration assets across Egypt, UK, Italy and a high impact exploration licence in Jamaica.

The business is led by an experienced management team with a strong track record of growing full cycle businesses, partnered with established industry players and is well positioned to deliver future growth through portfolio optimisation and targeted acquisitions.

United Oil & Gas is listed on the AIM market of the London Stock Exchange. For further information on United Oil and Gas please visit  www.uogplc.com  

 

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