United Oil & Gas upbeat as Selva Field given preliminary approval

(Sharecast News) - Exploration and development company United Oil & Gas announced on Tuesday that it has been advised by the operator, Po Valley Energy, that the production concession application to develop the Selva Gas Field, onshore Italy, has been granted preliminary approval by the Italian government.The London-listed firm said Selva, which is located less than one kilometre from the Italian National Gas Grid, included the Podere Maiar-1d appraisal and redevelopment well, where "strong" flow rates from testing operations confirmed a "significant" commercial gas discovery in January last year.United holds a 20% interest in Selva, which sits within the Podere Gallina Exploration Permit, located in the Po Valley region of Italy, which the company described as a proven hydrocarbon region where more than 5,000 wells had been drilled historically.The development plan would involve the installation of a fully-automated gas plant at the existing Selva/Podere Maiar-1d well site, and the running of a one-kilometre long pipeline to connect to the nearby Italian National Grid connection.United said the development was targeting production at a rate of up to 150,000 cubic metres per day gross from the C1 and C2 reservoirs in the Medium-Upper Pliocene sands of the Porto Garibaldi Formation.The thickest level C2 reported a peak flow rate of 148,136 scm/day on a 3/8 inch choke, and a pressure differential of 11 bar with no water production.It explained that the higher level C1 - net pay 15.5 m - also reported strong flow test results, with a peak flow rate of 129,658 scm/day on a 3/8 inch choke with good pressure recovery.Subject to successful 3D seismic results from the upcoming programme, additional wells would be drilled to target the additional prospectivity in the licence, including the Selva East, Selva South Flank, and Riccardina structures. "The preliminary award of the Selva production licence is a key regulatory milestone in advancing Selva towards production," said United Oil & Gas chief executive officer Brian Larkin."It is also a significant milestone for United as commercial gas production at Selva is expected to generate significant cash flow for the company from 2020 onward."As well as progressing with the development, we are also excited by the upcoming 3D seismic acquisition in the licence, which will focus on proving up the huge potential of the wider licence area."Larkin said that, subject to successful results from the acquisition programme, additional wells would be drilled, aiming to "significantly increase" the overall resource base within the Selva concession.He said the development kicked off an "exciting year" for 2019."In the first quarter , shareholders can expect the imminent spudding of the Colter well in the Wessex Basin as well as the near-term publication of a series of CPRs including updated volumetrics for our Crown Oil Discovery in the North Sea and the Waddock Cross Field in the Wessex Basin and also for both our large, high-impact, offshore Jamaican licence and Podere Gallina in Italy."With multiple value triggers due in the coming weeks and months, we look forward to updating shareholders as progress is made both at Selva and across our growing portfolio."