United Oil & Gas PLC (LON:UOG) said it is now counting down to the start of drilling at the Abu Sennan project, in Egypt, as a rig contract is inked for the programme.
The EDC-50 rig has been contracted to the programme which kicks off with the ASH-3 development well, slated ‘in the coming weeks’.
It is expected that the programme will continue after ASH-3 with follow-on targets seen in a low-risk exploration well along with a further ASH development well.
United noted that its working interest production from the 22%-owned Abu Sennan asset is on-target to exceed prior guidance for the second half of 2020, which had been pitched at 2,300 barrels oil equivalent per day (boepd).
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Net production has averaged 2,370 boepd in the period to date (up to November 29), marking a 20% increase on the performance in the first six months of the year.
Moreover, United added, the completion of a gas pipeline is due to boost production volumes from the start of January.
United highlighted the pipeline as substantially increasing recovery rates and it will reduce the need to flare gas. It could potentially increase gross production rates by 1,000 boepd.
“We are delighted to be ready to re-commence drilling activities at the Abu Sennan licence, fully funded from our operating cashflow,” said Brian Larkin, United chief executive in a statement.
“We have worked closely with the operator, Kuwait Energy Egypt, over recent months to design a drilling campaign for 2021 and believe the scheduled wells can maintain the exceptional record of over 80% drilling success which has been achieved on the licence to date.”
“The Abu Sennan licence continues to perform strongly and deliver low-cost production growth.”
Larkin added: “With over 35 mapped prospects on the licence and following on from the outstanding success of the ASH-2 and ES-5 wells where drilling outcomes significantly exceeded pre-drill expectations it offers excellent potential to deliver even greater returns for the licence partners.
“We look forward to updating shareholders on the progress of the ASH 3 development well in the coming weeks and months.”