Member Info for jpsherwin

Can you share a link please J.

Plausible that we receive news on UOG is in the process of recovering outstanding receivables from its former Egyptian operations, and or advancing its exploration activities in Jamaica with planned piston core sampling, and seeking a joint venture partner to support its exploration efforts in the region.

Thank you.

Jono,

Can you share your source where this is quoted, based on the latest publicly available information, I haven’t seen UOG officially confirm that figure in any RNS or recent updates.

What we do know is that UOG has outlined their piston core sampling survey for 2024, estimated to cost $0.6–0.7 million, which will be funded from existing cash reserves and receivables. Beyond this, they are focused on securing a farm-out partner for Walton-Morant, which could cover larger costs for exploration in 2025, like drilling a well (estimated at $30–35 million).

If you’re referring to the overall exploration budget for 2025, it’s possible this includes preparatory activities, but nothing official has been stated to confirm a $3 million cost.

Https://www.uogplc.com/wp-content/uploads/2024/07/240705_UOG-Jamaican-groove.pdf

Costs of the piston survey and cash-to-date estimates do not include the receivables from Egypt.

Receivables from Egypt:

• UOG has a crude oil receivables position with EGPC totalling US$0.5m (adjusted to current Egyptian Pound exchange rates).

• The receivables are expected to be collected over the coming months, as indicated by the prior partial payment of US$1m in April.

• These receivables are not included in the current cash position.

Cash position without Egypt receivables:

• UOG’s estimated cash on hand at the PLC level is US$1.5m, explicitly stated as excluding the US$0.5m receivables from Egypt.

Piston survey funding:

• The US$0.6–0.7m cost for the piston coring survey will be funded out of existing cash resources (the US$1.5m cash position) and does not rely on the Egyptian receivables.

Cash runway calculation:

• The runway through the end of 2024 also excludes the Egyptian receivables, as explicitly mentioned.

Https://www.uogplc.com/wp-content/uploads/2024/07/240705_UOG-Jamaican-groove.pdf

1. Jamaica Exploration Survey:

• UOG plans to conduct a piston coring survey on the Walton-Morant licence in Q3/Q4 2024.

• This survey will cost approximately $0.6–0.7 million and aims to identify hydrocarbons at 40 seabed sampling locations around the Colibri prospect and other areas covered by 3D seismic data.

• If successful, the survey could improve the Chance of Success (CoS) for the Colibri prospect from 19% to 25%, significantly de-risking the project for potential farm-in partners.

BT/ Jonno,

Apologies, You’re right that the field faced issues back then, with production shut in due to high water cuts. However, a lot has happened since then that’s worth highlighting.

April 2024, the North Sea Transition Authority extended the PL090 licence, which includes Waddock Cross, for another five years until March 31, 2029. This extension provides the operator, Egdon Resources, and partners like UOG the opportunity to redevelop the field using modern techniques.

Egdon now estimates the field contains around 57 million barrels of Stock Tank Oil Initially in Place (STOIIP). They’ve outlined a plan to drill a horizontal well, which is expected to significantly improve production efficiency. If successful, projected production rates are between 500 and 800 barrels of oil per day—a considerable step up compared to earlier efforts.

The redevelopment strategy is specifically designed to overcome the challenges seen in 2014 by leveraging modern tools and approaches.

https://www.optivasecurities.com/latest-news/2024/04/02/united-oil-gas-license-update-waddock-cross-licence-extension

Morning BT,

I appreciate your point about modern techniques, but just to clarify—there wasn’t any drilling in 2014. That year, Tullow focused on a 3,000-kilometer offshore 2D seismic survey as part of a Production Sharing Agreement with Jamaica. The goal was to better understand the subsurface geology and identify leads and prospects, which they successfully did.

Tullow's work later revealed ‘live’ oil offshore Jamaica, reported in 2016, confirming the presence of an active petroleum system. However, no wells were drilled during that period—it was all about seismic data and interpretation to set the stage for future drilling.

https://jis.gov.jm/jamaica-moves-ahead-with-oil-and-gas-exploration

https://jamaica-gleaner.com/article/business/20170210/tullow-finds-live-oil-offshore-jamaica#google_vignette

https://www.jamaicaobserver.com/2014/11/28/the-long-stubborn-search-for-oil

Evening Jono,

If I’m not mistaken, the 1982 drill being referred to is Arawak-1, offshore Jamaica. While it was plugged and abandoned after showing wet gas, it’s worth noting that it provided evidence of a working petroleum system in the area.

What’s exciting is how much things have progressed since then. Back in the 80s, the tools and data available were far more limited than today. The modern 3D seismic data from 2018, for example, has completely transformed the understanding of the Walton-Morant block, identifying significant resource potential. It’s a great example of how exploration can evolve, even in areas with challenging histories.

For me, my research, albeit in the early stages, helps me make more informed decisions. I’ve learned from rushing in blindly in the past, and I’d strongly advise anyone investing to take the time to do the same.

For more context, here are links to reference documents that provide additional insights into the historical drilling activities and advancements in exploration techniques:

United Oil & Gas Jamaica Update (Nov 2017) - https://www.uogplc.com/wp-content/uploads/2022/05/United-Oil-Gas-Jamaica-update-Nov-2017.pdf - https://www.offshore-technology.com/projects/colibri-prospect-development

May 2024, worth another look.

https://www.youtube.com/watch?v=lj3ciby5jgo

"One is over a decade old in an area that has never produced oil before":

Agreed, the Walton-Morant block in Jamaica has no production history. However, it holds 7 billion barrels of mean prospective resources, offering substantial economic potential. Modern 3D seismic data acquired in 2018 and indicators such as oil seeps and seismic evidence for hydrocarbon migration suggest a strong working petroleum system. While the lack of production history is a factor, it doesn’t negate the block’s resource potential—modern technology and data have unlocked significant discoveries in similar frontier areas, like Guyana’s Stabroek block.

________________________________________

"The other was first drilled in 1982 and had to be shut in 10 years ago because it was producing almost nothing but water":

This license isn’t addressed explicitly in the slides, but UOG is taking steps to de-risk its assets. Initiatives like piston coring surveys and seismic reprocessing leverage modern techniques to improve subsurface understanding and reduce risk. Failures in older operations often stem from outdated practices, which newer technologies can overcome.

________________________________________

Walton-Morant Overview:

The Walton-Morant block spans 22,400 km² with 7 billion barrels of mean prospective resources identified. Modern 3D seismic data and planned activities, such as piston coring and seismic reprocessing, significantly enhance subsurface understanding and reduce geological risks. These efforts are a game-changer compared to past exploration.

On top of this, the block benefits from supportive government policies and favourable fiscal terms, making it highly attractive for investment. Comparisons to Guyana’s Stabroek block highlight the scale and development potential, with over 1 million barrels per day possible on success.

________________________________________

A company’s broader asset base isn’t just about output; it’s about the potential for strategic value creation. UOG’s focus on leveraging modern data and technologies gives it a strong chance to unlock significant value in its frontier assets.

May 2024, worth another look.

https://www.youtube.com/watch?v=lj3ciby5jgo

Your experience in the industry adds a valuable perspective. A few points for consideration:

1. Standard DD: While due diligence is a routine process, it can uncover hidden liabilities or complexities, but UOG’s relatively small size and narrowed focus post-Egypt could make the process manageable. If the risks are properly quantified, it might actually present an attractive opportunity for a strategic investor.

2. UOG’s Asset Portfolio: With UOG’s withdrawal from Egypt for a cash consideration of £650,000, the focus shifts to its Jamaican license. While this narrows its portfolio, it also streamlines the business, potentially making it easier for a buyer or investor to focus resources and strategy on one high-potential asset.

3. Jamaican Government Relationship: While it’s true that a major oil company could be more appealing to the Jamaican government, it’s important to note that UOG has likely built valuable groundwork, including regulatory compliance and local partnerships. These efforts reduce the setup time for future operators or investors and might offer a more seamless transition for any new entrant.

4. Impecuniosity: While UOG’s financial position is a challenge, it also creates a potential opportunity for investors to capitalise on its distressed valuation. For an investor with the resources to unlock the value of the Jamaican license, this could provide significant upside potential.

Access to Frontier Exploration Potential:

• Majors often look for high-potential assets in frontier regions. With 2.4 billion barrels of mean prospective resources, Jamaica offers a significant upside.

2. Partnership Benefits:

• UOG’s local knowledge and groundwork (licence extensions, stakeholder engagement) reduce the major’s initial investment in time and effort.

3. Risk Management:

• Sharing costs with UOG is more attractive than taking on 100% of the financial and operational risks associated with a frontier area.

4. Portfolio Strategy:

• Farming in allows the major to balance its global portfolio without fully committing capital until the asset is further de-risked

Lower Upfront Investment:

• Farming into the Walton Morant Licence allows a major to gain access to the asset without taking on the full financial or operational risk of owning UOG.

• Focused Opportunity:

• A farm-in deal typically allows a major to acquire a significant interest in the licence without needing to manage UOG’s entire business, making the transaction more streamlined and strategic.

• Risk Sharing:

• Farming in enables cost-sharing with UOG on exploration, drilling, and development, reducing the major’s exposure to high-risk frontier exploration activities.

• Acquisition Complexity:

• Acquiring UOG outright involves regulatory approvals, shareholder buyouts, and potential integration of unrelated assets. A farm-in avoids these hurdles.

Oily,

While the surface-level comparison between the company’s market cap and the cost of acquiring a license is intriguing, several critical factors must be considered:

1. Debt and Liabilities: Acquiring a company means assuming all its existing debts and liabilities. UOG’s financial statements would need thorough examination to assess any outstanding obligations that could affect the overall cost of acquisition.

2. Asset Portfolio: This could be advantageous or burdensome, depending on the acquiring party’s strategic objectives.

3. Operational Commitments: Ownership of UOG would also mean taking on its operational commitments, including ongoing projects, staffing, and associated costs. These factors could significantly influence the desirability and financial implications of a full company acquisition.

4. Regulatory and Approval Processes: Acquiring a publicly traded company involves complex regulatory approvals and due diligence processes, which can be time-consuming and costly. In contrast, negotiating for a specific license might be more straightforward, depending on the circumstances.

Strategic Alignment

The decision between acquiring a specific asset (with associated back costs and carry) versus purchasing the entire company hinges on the strategic goals of the interested party. If the primary interest lies in a particular license, and the rest of UOG’s assets do not align with the acquirer’s objectives, it might be more practical to negotiate terms for that specific asset. Conversely, if UOG’s broader asset base offers synergistic value, a full acquisition could be justified.

However, the decision to pay back costs and a carry for a license versus acquiring the entire company involves a multifaceted analysis of financial, operational, and strategic factors. Potential acquirers must conduct comprehensive due diligence to determine the most advantageous approach.

no argument there, though can you shed any light on:

very little volume, buys outweigh sells and for example we are 7% down, today buys outweigh sells and nothing.

Small trades of little value, are?

Let's see what happens in the coming weeks.

Averaging down , let's see if it turns anytime soon. Volume today, Buys outweigh Sells and yet not a flicker.

Vol Sold 251,860
Vol Bought 266,933