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Wednesday, September 30, 2020
United Oil and Gas (UOG) reports that at its Abu Sennan Concession in Egypt, gross production increased to 12,347 barrels of oil equivalent per day (boepd). The company said in its H1 results that the performance of Abu Sennan has been exceptional since the beginning of 2020, clearly demonstrating the significant upside potential identified by its team’s technical assessment.
On March 1, gross production levels were at 7,770 boepd (1,709 boepd net). These increased to 12,347 boepd (2,716 boepd net) at the end of June, having reached a high of 14,282 boepd (3,142 boepd net) in early June during the testing of the ES-5 Well. Gas is sold under a fixed price contract and comprises c. 25% of the production totals.
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.”
The company added that net the production has reached to 1,709 boepd in the first of March and jumped to a high of 3,142 boepd in early June during the testing of El Salmiyah-5 (ES-5) well.
UOG noted that after completion of ES-5 well’s testing program, the well was producing 2,900 barrels of oil per day (bbl/d) and 9 million standard cubic feet (mmscf/d) on a controlled rate at the end of June. Regarding ASH 2 well, its net production reached 660 bpd.
In addition, the Independent reserves report by Gaffney Cline and Associates had shown a significant reserves increase, stating that Abu Sennan 2P reserves increased 12.5% to 13.5 million barrels of oil equivalent (mmboe) (15% gas) versus 12 mmboe at the end of 2019. It also said that the gross 1P reserves rose by 76% to 4.2 mmboe and gross 3P reserves increased by 46% to 28.6 mmboe from 2.4 mmboe and 19.6 mmboe respectively at the beginning of 2019, in addition to 0.73 mmboe gross 2C contingent resource.
This reserve upgrade did not include the successful El Salmiyah- 5 well and the company expects additional reserves from this well in the 2020 report.
UOG will be developing the ASH-3 well in late 2020/early 2021, and says it expects a reduction in flaring after installing a gas pipeline at the ASH field which should deliver 1.5 mmscf/d of gas. The company added that it is in discussions with Abu Sennan joint venture partners for further development and exploration planning.
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