United Oil & Gas PLC - New Prospective Resources report for Jamaica

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

7th December 2020

United Oil & Gas PLC

("United" or the "Company")

New Independent Report indicates over 2.4 billion barrel potential in Jamaican licence

United Oil & Gas Plc (AIM: "UOG"), the growing oil and gas company with a portfolio of production, development, exploration and appraisal assets, is pleased to announce the results of an independent evaluation of Prospective Resources that has been prepared by Gaffney Cline & Associates (Gaffney Cline) covering the Walton Morant licence, offshore Jamaica, which is now held 100% by United.

Highlights¹

·    New independent Prospective Resource report from Gaffney Cline deepens understanding of the world class potential of Walton Morant licence

·    Unrisked mean prospective resources of over 2.4 billion barrels assigned across 11 prospects and leads²

·    406 MMbbls gross unrisked mean Prospective Resource estimate for the Colibri Prospect, the prime exploration target on the licence - an uplift of 77% compared to previous independent report

·    First independent review of Morant Basin indicates major potential including Thunderball lead with mean unrisked recoverable prospective resources of 603 MMbbls

¹All resources figures referred to above are mean unrisked prospective resources stated both gross and net to United

² Summation made by UOG management based on the GaffneyCline analysis

Jonathan Leather, Chief Operating Officer, United Oil and Gas, commented:

"United has long held the view that the Walton Morant Basin is a highly prospective and exciting basin, with billion-barrel potential.  This is the second independent report on the licence and the first to explore prospects across the full basin.  The results are exceptionally positive and support our strong conviction that this is a transformational asset.

"While the 77% uplift in the unrisked mean Prospective Resource estimate for Colibri, our main target in the Walton Basin, is an excellent result, we are just as excited about seeing the multi-billion-barrel potential of the licence as a whole.  A successful outcome for Colibri now opens up even greater possibility in this region.

"Since concluding the agreement with the Jamaican Government to take on operatorship earlier this year, and informed by feedback from companies who have engaged with United and the previous licence operator in the data-room process, United has been making good progress on the committed work programme, and the CPR results here are another step towards reaching the Company's ultimate goal of being in position to drill the first exploration well offshore Jamaica for over 40 years. We are actively seeking partners to join us in making this happen - and unlocking the potential that is clearly present in Jamaica. This latest verification of potential will greatly help in that goal."

Walton Morant Licence

United is the 100% equity holder and operator of the Walton Morant licence offshore Jamaica. The licence covers 22,400km².   11 wells have been drilled to date (9 onshore, 2 offshore), and all bar one contained hydrocarbon shows.

United were granted a 100% stake in the licence in 2020 by the Jamaican Government. This included an 18-month extension to the Initial Exploration Period, with a drill-or-drop decision required by 31^st January 2022. As part of this agreement, the Company was mandated to carry out a low cost, geotechnical work programme, building on the $30m+ that has been invested to date.

United have made significant progress on the work programme items, including a re-interpretation of the Morant Basin. The update to the CPR was commissioned based on this new work. As well as a review of the drill-ready Colibri prospect, with an updated reservoir model based on the Pre-Stack Depth Migration (PSDM) 3D data-set that was acquired and processed in 2018-19, for the first time the CPR also included a review of the wider prospectivity across the basin.  In total, 11 prospects and leads were reviewed, and the results are shown in Table 1.  These highlight overall prospective resources of over 2.4 billion barrels.

Table 1. Gross Prospective Resource estimates for the Walton Morant Licence

Notes

1.     Gross Prospective Resources are 100% of the volumes estimated to be recoverable from the prospect(s)/lead(s) in the event that a discovery is made and subsequently developed.

2.     The Chance of Geologic Discovery (Pg) reported here represents an indicative estimate of the probability that drilling the prospect(s)/lead(s) would result in a discovery. This does not include any assessment of the risk that the discovery, if made, may not be developed (i.e., it does not include a Chance of Development (Pd)).

3.     The volumes reported here are "unrisked" in the sense that no adjustment has been made for the risk that no discovery will be made or that any discovery would not be developed.

4.     Prospective Resources in this table are UOG's working interest fraction of the gross Prospective Resources; they do not represent UOG's actual Net Entitlement under the terms of the PSA that governs the asset, which would be lower.

5.     Identification of Prospective Resources associated with a prospect is not indicative of any certainty that the Prospect will be drilled, or will be drilled in a timely manner.

6.     Prospective Resources should not be aggregated with each other, or with Reserves or Contingent Resources, because of the different levels of risk involved.

7.     U1 is the low (P90) estimate, U2 is the best (P50) estimate and U3 is high (P10) estimate.

8.     Figures reported in line with SPE PRMS guidelines

9.     Mean volumes are reported at the request of UOG management.

10.   UOG are 100% equity holders and operators of the Walton Morant Licence

At Colibri, the new reservoir model has led to unrisked mean prospective resources of 406 MMbbls being assigned to the primary drill candidate. This is an increase of 77% compared to the previous value of 229 MMbbls that was estimated in a CPR completed at the end of 2019. The fact that billion-barrel potential has been recognised in the Morant basin, away from the existing 3D seismic data, suggests there is significant follow-on potential should there be a basin-opening success at Colibri.

The new independent Prospective Resource report builds on the existing evaluation of the Licence and provides further encouragement on the potential that is held within the Walton Morant Basin. It will form part of the data-room that United is holding to attract farm-in partners in 2021.

The full Prospective Resources report is available for download on the Company's website www.uogplc.com

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. 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

ENDS

Glossary

bbl, bbls means barrel, barrels

CPR means competent person's report

M means thousand

MM means million

PRMS means the 2018 Petroleum Resource Management System (SPE)

SPE means Society of Petroleum Engineers

'Prospective Resources' means those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have both an associated chance of discovery and a chance of development. They are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub-classified based on project maturity.

Lead means a project associated with a potential accumulation that is currently poorly defined and requires more data acquisition and / or evaluation to be classified as a prospect

Prospect means a project associated with a potential accumulation that is sufficiently well defined to represent a viable drilling target

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

Notes to Editors

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

Led by an experienced management team with a strong track record of growing full cycle businesses and partnered with established industry players, the Company 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 https://www.uogplc.com/