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Crown and Waddock Cross add 6.4MMstb to United Oil & Gas’s portfolio (UOG)

United Oil & Gas (LSE:UOG) dipped 1.5pc to 4.5p on Friday morning despite unveiling robust oil resource estimates at two of its UK assets.

A maiden competent persons report (CPR) gave the business’s North Sea-based Crown oil discovery gross unrisked 2C oil resources of 6.35MMstb. Meanwhile, an updated CRP put gross unrisked 2C oil contingent resources at United’s Waddock Cross field in the Wessex Basin at 1.55MMstb. This is an improvement on previous figures.

Combined, the two fields provide United with net unrisked 2C oil contingent resources of 6.45MMstb. This takes the estimated value of the company’s risked portfolio to $80m. As it stands, the business has a market cap of c.£15.7m ($20.5m).

United added that it is currently finalising further CPRs for its Colibri prospect offshore Jamaica and the Selva gas field onshore Italy. They will be released ‘shortly’, the firm said.

United is currently undergoing a farm-out process at Crown with the aim of finding a partner to move the forward. The company said it has already enjoyed ‘considerable interest’ from the industry, which it expects to be enhanced by Friday’s CPR figures. The business is also developing a drilling plan at Waddock Cross alongside its partners. It plans to drill a well later this year.

Brian Larkin, chief executive at United, said the CPRs form part of the firm’s emphasis on unlocking the value of its asset base this year.

Independent verification, through CPRs on each asset, will form an important part of this process,’ he added.  ‘There will be an extensive operations programme, beginning imminently with the Colter drill and including further activity in Italy, moving to production in 2020. 

‘We will also seek to unlock value through farm downs in Jamaica and in our Crown discovery, the commerciality of which is supported by the CPR estimates reported here. With Company estimates of close to US$80m NPV of assets already in place, we look forward to growing awareness of the considerable strength of the United business.’

Author: Daniel Flynn

Disclaimer: The author does not own shares in the company mentioned in this article

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