United Chief Executive Officer, Brian Larkin commented: “Following an intense period of planning, we are delighted to be ready to re-commence drilling activities at the Abu Sennan licence, fully funded from our operating cash flow.
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. 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.”
Operational Update – Egypt
· EDC-50 rig has been contracted to commence a drilling programme on the Abu Sennan concession
· Drilling will start with the ASH-3 development well, which is planned to commence in the coming weeks
· Expected follow-on targets include a low-risk exploration well, and a further development well on the ASH structure
· Working interest production from Abu Sennan on target to exceed previous guidance of 2,300 boepd for H2 2020
· ASH gas pipeline to boost production from start of 2021
United Oil & Gas PLC (AIM: “UOG”), the growing oil and gas company with a portfolio of production, development, exploration and appraisal assets offers an update on the Abu Sennan Licence in Egypt (United 22% working interest), including the signing of the rig contract for the ASH-3 well.
The EDC-50 rig has a history of successful drilling in the Western Desert. It has been contracted for a drilling programme, starting with the ASH-3 development well, with low-cost rig-rates linked to oil-price. The campaign will be funded from operating cashflow. Subject to EGPC approvals, the rig is due to come on site before the end of the year, with drilling starting shortly after this. It is anticipated that the ASH-3 well will take up to 60 days to drill and test.
The ASH-3 well will target the producing Alam El Bueib (AEB) reservoirs in an area of the ASH Field updip of the ASH-2 production well, which came onstream at the beginning of the year, and which to date has produced in excess of 1 million barrels.
The ASH-3 development will be the first well due to be drilled by the EDC-50 rig in the 2021 campaign. United expect the second well in the drilling schedule to be an exploration well, targeting the Abu Roash reservoirs in the 4-way dip-closed Prospect D structure in the north of the Abu Sennan licence, close to the producing Al Jahraa field. This is a low risk well, located close to existing infrastructure, capable of being brought into production quickly.
Average production rates on the Abu Sennan Licence for the second half of 2020 to 29 November are c. 2,370 boepd net to United’s working interest. This is a 20% increase to the average H1 production achieved after United’s entry to the licence at the end of February. Average H2 production is likely to exceed the previous guidance of 2,300 boepd net.
In the near term, production is due to benefit from the completion of the ASH-2 gas pipeline, expected to be brought onstream at the start of 2021. When completed, the pipeline will substantially increase recovery rates and reduce the need to flare gas, improving the environmental performance of the licence. This pipeline has the potential to add up to 1,000 boepd of gross production.
In order to give greater visibility to shareholders, United will, from January, report production levels on a quarterly basis.
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”)
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