United Oil & Gas expects production growth as Egyptian success continues

United Oil & Gas Plc (UOG) describes itself as a rapidly-growing full-cycle AIM-listed oil and gas company with the energy and capability to build on its track record of delivery.

The company is focused on low-risk production and development projects in Egypt, Italy, and the UK, and high-impact exploration in Jamaica.

In early 2020, the company acquired a 22% non-operating interest in the Abu Sennan asset. Located in the prolific hydrocarbon-producing Western Desert region of onshore Egypt, it comprises 7 development concessions.

United Oil & Gas PLC (AIM:UOG) told investors the Al Jahraa-13 development well (AJ-13), at the Abu Sennan licence, onshore Egypt, has been spud.

The well programme is expected to take 65 days as it aims for stacked Upper and Lower Bahariya reservoir targets.

The company said the well can rapidly be brought into production, generating revenue.

“Following the success of Al Jahraa-8, we are delighted to now be drilling the Al Jahraa-13 well, which can add immediate cash flow to the company,” said chief executive Brian Larkin.

() told investors that production has begun from the ASX-1X well in the Abu Sennan licence, onshore Egypt.

It follows exploration success and the declaration of ASX-1X as a new discovery, with the project operator sufficiently confident to move straight to production after the initial well result. It is the second exploration well of the current programme to be delivered straight to production.

United Oil & Gas PLC (AIM:UOG) said production averaged 2,022 barrels oil equivalent per day through the third quarter.

The Q3 production comprised 1,619 barrels of oil and 405 boepd of gas, the company noted.

Analysts at Optiva Securities say they are confident United Oil & Gas (LON:UOG) and its partners will be able to “mitigate” water-cut issues that have led to production declines at the ASH field onshore Egypt.

Calling the news “disappointing”, the broker’s oil team “tempered” its price target to 6.7p a share from 7.3p. That said, the valuation is still more than double the company’s share current share price.

“We remain confident that remedial action on ASH will serve to mitigate excessive production declines from the field and we highlight that our tempered assessment of United’s Egyptian assets still represents a significant uplift on the current share price,” Optiva said in a short note.

United Oil & Gas PLC (AIM:UOG, FRA:1UO)’s (LON:UOG) Brian Larkin talks to Proactive London’s Katie Pilbeam to discuss capitalizing on their ‘fantastic first six months of the year’ drilling three successful wells.

Working interest production averaged 2,730 barrels oil equivalent per day in the first half of 2021, this compared with 1,975 boepd during the comparative period of 2020, boosted by a continuation of successful wells at the 22% owned Abu Sennan permit.

Larkin highlights the three successful wells drilled on Abu Sennan and the company reached record working interest production of 2,730 boepd, delivering strong operational cashflow.