Broker target8 Dec 2020 10:51
Please find attached Optiva’s latest update note on United Oil & Gas, commenting on the Walton Morant licence update.
United has announced the results of an independent evaluation of prospective resources by Gaffney Cline & Associates (Gaffney Cline) covering the Walton Morant licence offshore Jamaica in which United holds a 100% interest. In summary, the licence is now estimated to hold gross unrisked mean prospective resources of over 2.4 billion barrels across a portfolio of 11 prospects and leads. Of particular interest is that the primary prospect on the acreage, Colibri has now been ascribed gross unrisked prospective resources of 406 mmbbls, representing an exciting 77% increase on the previous independent estimate.
We note that the current share price is more than covered by our valuation of United’s 22% interest in the Abu Sennan producing asset in Egypt which is currently performing strongly. However, with the benefit of the new CPR data for Walton-Morant, we have increased our risked assessment for the primary Colibri prospect and our refreshed assessment of Walton-Morant increases our core valuation for United from 20.5p to 25.1p per share with the prospect of substantial further upside represented by the balance of the wider Jamaican portfolio of prospects and leads.
At time of sending, UOG is trading at a mid-price of 2.95p.