(Sharecast News) - United Oil & Gas updated the market on the Waddock Cross oil field on Tuesday, in which it holds a 26.25% working interest, announcing the extension of the PL090 licence, the home of the Waddock Cross field, for an additional five years.
This AIM-traded company said the extension, facilitated by the North Sea Transition Authority (NSTA), effectively prolonged the licence's term until 31 March 2029.
In addition to the licence extension, recent reservoir modelling conducted by the licence's operator Egdon Resources unveiled promising prospects for Waddock Cross.
The analysis revealed a substantial stock tank oil initially in place (STOIIP) volume of 57 million barrels, further solidifying the field's potential value.
Moreover, the potential for redevelopment at Waddock Cross presented an opportunity, with United explaining that by introducing a new horizontal well, the field had the capacity to produce between 500 and 800 barrels of oil per day gross.
Furthermore, it was estimated that around one million barrels of gross recoverable oil could be extracted through the redevelopment initiative.
The forecast production enhancement demonstrated the considerable upside potential of the Waddock Cross field, and aligned with United's strategic objectives of maximising asset value and bolstering production capabilities.
Egdon Resources, as the operator, was actively advancing plans to redevelop Waddock Cross.
That included progressing the necessary steps for planning permissions and permit applications to facilitate the implementation of redevelopment initiatives.
"As a company our near-term focus is on advancing the Walton Morant Licence in Jamaica and the Waddock Cross oil field in the UK, where we hold a 26.25% working interest," said chief executive officer Brian Larkin.
"We are delighted to announce that the North Sea Transition Authority (NSTA) has signed a deed of variation extending the term of licence PL090, which contains the Waddock Cross oil field, for another 5 years through to 31 March 2029.
"This is a significant milestone for us, and we are excited about the low risk, high margin redevelopment opportunity it presents."
Larkin said the company believed that a new horizontal well at Waddock Cross could yield commercial oil production of 500 to 800 barrels per day gross, and around one million barrels gross recovery.
"We are looking forward to working with the Operator as plans to restart production at Waddock Cross are actively progressed."
At 1057 BST, shares in United Oil & Gas were down 5.04% at 0.18p.
Reporting by Josh White for Sharecast.com.
United Oil&gas (UOG)