United Oil & Gas PLC, the growing oil and gas company with a portfolio of production, development, exploration and appraisal assets is pleased to announce its unaudited financial and operating results for the half year ended 30th June 2020. A shareholder call will take place at 12.00 GMT today.
Brian Larkin, Chief Executive Officer commented:
"2020 has been successful for United, with integration of the Egypt assets which are delivering low cost, sustained production, material reserves growth and positive operating cash flow. Post period end we were also awarded operatorship and 100% ownership of the high impact Walton Morant exploration licence in Jamaica, we have strengthened the Board and we recently welcomed new institutional shareholders onto our register, all of which marks our arrival as a full cycle oil and gas company.
"Looking ahead our focus remains on managing United in a responsible way as we allocate capital prudently and efficiently to grow the business. We are well placed to manage the challenges the industry is experiencing and to take advantage of an improvement in market conditions."
Year to date highlights
Strategic - strengthening of the Board and shareholder base
- Rockhopper Egypt acquisition completed following Egyptian Government Approval including successful equity placing and re-admission of the enlarged Group to AIM
- Significant strengthening of the Board with the appointment of Ms Iman Hill as non-executive director post period end
- Establishment of Environmental, Social and Governance (ESG) Board Committee in September 2020 to drive forward our commitment to operating sustainably
- Successful placing of Rockhopper Exploration plc's 18.3% shareholding in United with new institutional investors post period end
Operational*- sustained, low cost production performance and reserves growth
- Group working interest 1H-2020 production averaged 1,975 boepd net*
- Success at the ASH-2 and ES-5 Wells in Egypt increased working interest production from 1,709 boepd on 1st March 2020 to 2,716 boepd on 30th June 2020
- Independent reserves report by Gaffney Cline & Associates from the end of 2019 indicates a 12.5% increase in Abu Sennan Gross 2P Reserves to 13.5 MMboe representing a 190% reserves replacement ratio
- 100% equity stake and operatorship of the Walton Morant licence in Jamaica along with 18-month extension secured
- Provisional award of Blocks 15/18e and 15/19c, containing the Maria and 15/18a-6 Discoveries, in the UK's 32nd offshore licensing round
*From the completion of Rockhopper Egypt acquisition to period end, 28th February 2020 to 30th June 2020.
Financial* - revenue growth delivering positive operating cashflow
- Group Revenue of $2.4m
- Gross Profit of $0.3m
- Fair Value Gain on Derivative Instrument $2.8 m
- Profit after Tax $1.8m
- Realised oil price of $28.26/bbl
- Cash collections in the four-month period of $3.6m
- Cash operating costs of $4.36/boe
- Repayments on BP Pre-payment facility $0.7m lower than projected due to hedge impact
- Group Cash balance of $1.2m
*From the completion of Rockhopper Egypt acquisition to period end, 28th February 2020 to 30th June 2020
Outlook - continued focus on capital discipline while progressing high quality asset base
- Re-engagement of drilling operations in Egypt, with the ASH-3 development well expected to spud in late 2020/early 2021
- Installation of a gas pipeline at the ASH field, Egypt, will commence shortly: this will reduce flaring, and on targeted completion in late 2020, will deliver up to 7 mmscf/d (1.5 mmscf/d net) of gas
- Discussions with the Abu Sennan Joint Venture Partners on further development drilling at the ASH field and the location for the 2021 exploration commitment well are ongoing.
- H2-2020 production guidance forecast by Operator of 2,300 boepd net to United
- Pricing discount improvements and reductions agreed with EGPC has potential to deliver between $600,000 to $800,000 uplift in revenues at current production levels on an annualised basis
- Work programme underway at the Walton Morant licence, Jamaica to further derisk the acreage, including the Colibri prospect, estimated to contain gross unrisked mean prospective resources of 229 MMstb
- CPR to be commissioned over at least 10 further targets in the Walton Morant Basin ahead of a farm-out process and drill decision in 2021.
- United, as a full cycle E&P company, is well positioned and continues to evaluate new venture opportunities emerging across the industry