Last checked at 14 Apr 2021 07:00
United Oil & Gas PLC / Index: AIM / Epic: UOG / Sector: Oil & Gas
14 April 2021
United Oil and Gas plc
("United" or "the Company")
Independent Reserves Report Results - Material Upgrade to Abu Sennan Reserves
United Oil & Gas PLC (AIM: "UOG"), the growing oil and gas company with a portfolio of production, development, exploration and appraisal assets is pleased to provide the following reserves update on the Abu Sennan concession, onshore Egypt (the "Licence").
United holds a 22% working interest in the Licence, which is operated by Kuwait Energy Egypt.
Highlights:
· Independent reserves and resources report, relevant to end 2020, by Gaffney Cline & Associates ("Independent Reserves Report") indicates material increase in reserves at Abu Sennan:
o 24% increase in Abu Sennan Gross 2P Reserves to 16.8 MMboe (15% gas) from 13.5 MMboe at the beginning of 2020, representing a near 200% reserves replacement ratio, before the recent drilling success at the ASH-3 and ASD-1X wells
o Gross 1P reserves up by 59% to 6.7 MMboe and gross 3P reserves up by 21% to 34.7 MMboe (from 4.2 MMboe and 28.6 MMboe respectively at the beginning of 2020)
· Significant additional growth opportunities evaluated in the report, noting 21 exploration prospects, many with multiple reservoir targets
Reserves
The results of an Independent Reserves Report that was completed on the Abu Sennan concession at the end of 2020 by Gaffney, Cline & Associates, using PRMS definitions for Reserves and Resources, has now become available to United. The comparison with the last reported Reserves as at 31 December 2019 on a Gross Field basis are summarised in Table 1, below.
A summary of the reserves and resource volumes taken from the report is included in the Appendix, and the full Independent Reserves and Resources Report will be available on the Company's website at https://www.uogplc.com/investors/reports-presentations-and-meetings/
The report indicates that gross 2P reserves have increased to 16.8 MMboe (15% gas) compared to 13.5 MMboe at the end of 2019. This is an annual increase of 24%, and given that c. 3.3 MMboe was produced from the Abu Sennan assets during 2020, indicates a reserves replacement ratio for 2020 of 198%. Gross 1P and 3P reserves have also increased, and are up by 59% to 6.7 MMboe and 21% to 34.7 MMboe respectively (from 4.2 MMboe and 28.6 MMboe at the beginning of 2020).
Applying United's 22% working interest to the gross 2P reserves gives 3.7 MMboe, up from 2.97 MMboe at the end of 2019.
The Independent Reserves Report has an effective date of 31st December 2020, and has not incorporated the results of the successful ASH-3 and ASD-1X wells that were drilled since the start of 2021.
Table 1. Reconciliation of Abu Sennan Reserves as at 31st December 2020 with Reserves as at 31st December 2019 on a Gross Field basis
| Gross Field Reserves (MMboe) | ||||
End 2019 | Exploration Adds | 2020 Production | Revisions | End 2020 | |
Proved (1P) | 4.179 | 0 | -3.297 | 5.773 | 6.655 |
Proved + Probable (2P) | 13.526 | 0.134 | -3.297 | 6.391 | 16.754 |
Proved + Probable + Possible (3P) | 28.589 | 0.269 | -3.297 | 9.123 | 34.685 |
Notes:
1. Revisions are due to production performance in 2020, the results of wells drilled in late 2019 and 2020, notably ASH-2 and El Salmiya-5, and the maturation of the ASH gas development from Contingent Resources to Reserves.
2. The exploration add is the AR-G reservoir at El Salmiya; in the 1P case, all potentially recoverable volumes fall beyond the economic limit given the current development plan
3. Totals may not exactly equal the sum of the individual entries due to rounding
4. United holds a 22% net working interest in the Abu Sennan concession
Prospective Resources
The report also included an evaluation of 21 exploration prospects located within the Abu Sennan concession, of which the largest has gross best estimate Prospective Resources of 5 MMboe and a 35% chance of success.
United's Chief Executive Officer, Brian Larkin commented:
"It is really pleasing to see the Abu Sennan assets continuing to perform so strongly, and so consistently, with a reserves replacement ratio of over 190% for the second year in a row.
"We remain confident that the Licence has much more to offer, and indeed, these upgraded reserve numbers take no account of the successes already achieved so far during the 2021 drilling campaign. This report significantly increases our understanding of the potential of this asset, pointing to 21 potential exploration targets. With further development drilling due to commence shortly at Al Jahraa, and further development and exploration targets identified across the licence, we are looking forward to further news flow and growth from Abu Sennan, both in the coming months and in the longer-term."
Broker update
The Company is pleased to confirm that Optiva Securities Limited now continues as the Company's sole Broker.
**ENDS**
Jonathan Leather, an Executive Director of the Company, who has over 20 years of relevant experience in the oil and gas industry, has reviewed and approved the information contained in this announcement. Dr Jonathan Leather is a qualified person as defined in the guidance note for Mining Oil & Gas Companies of the London Stock Exchange and is a member of the Petroleum Exploration Society of Great Britain and the Society of Petroleum Engineers.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").
Glossary: '1P' means Proved Reserves
'2P' means Proved plus Probable Reserves
'3P' means Proved plus Probable plus Possible Reserves
Bscf means Billion Cubic Feet
boe means Barrels of oil equivalent
bbl, bbls means barrel, barrels
bbl/d means barrels per day
M means thousand
MM means million
NPV means net present value
PRMS means the 2018 Petroleum Resource Management System (SPE)
SPE means Society of Petroleum Engineers
'Prospective Resources' means those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have both an associated chance of discovery and a chance of development. They are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub-classified based on project maturity.
'Proved Reserves' means those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods, and government regulation - Proved reserves can be categorized as developed or undeveloped
'Probable Reserves' are those unproved reserves which analysis of geological and engineering data suggests are more likely than not to be recoverable. In this context, when probabilistic methods are used, there should be at least a 50% probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable reserves
'Possible Reserves' are those unproved reserves which analysis of geological and engineering data suggests are less likely to be recoverable than probable reserves. In this context, when probabilistic methods are used, there should be at least a 10% probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable plus possible reserves
United Oil & Gas Plc (Company) |
|
Brian Larkin, CEO | brian.larkin@uogplc.com |
Beaumont Cornish Limited (Nominated Adviser) |
|
Roland Cornish and Felicity Geidt | +44 (0) 20 7628 3396 |
Optiva Securities Limited Broker |
|
Christian Dennis | +44 (0) 20 3137 1902 |
Murray (PR Advisor) |
|
Joe Heron | +353 (0) 87 6909735jheron@murrayconsultants.ie |
Camarco (Financial PR/IR) |
|
Billy Clegg James Crothers | +44 (0) 20 3757 4983 uog@camarco.co.uk |
Notes to Editors
United Oil & Gas is a high growth oil and gas company with a portfolio of low-risk, cash generative production and development assets across Egypt, UK, Italy and a high impact exploration licence in Jamaica.
Led by an experienced management team with a strong track record of growing full cycle businesses and partnered with established industry players, the Company is well positioned to deliver future growth through portfolio optimisation and targeted acquisitions.
United Oil & Gas is listed on the AIM market of the London Stock Exchange. For further information on United Oil and Gas please visit https://www.uogplc.com/
Appendix: Summary from Year End 2020 Reserves and Resources, Abu Sennan, Egypt, prepared for United Oil & Gas plc, April 2021
Note that United's policy is to quote working interest volumes, whereas GaffneyCline quotes net economic entitlement under the PSC that governs the asset.
Summary
The Abu Sennan concession is governed by a Production Sharing Contract (PSC). Seven development licences cover the eight fields that have already been discovered and put into production. An exploration licence covers the rest of the concession area. Oil and gas Reserves are attributed to six of the eight fields (two are no longer producing). Prospective Resources are attributed to a number of exploration Prospects that have been identified within the concession area. No Contingent Resources are currently identified.
Reserves Summary
The oil and gas Reserves attributable to UOG in Abu Sennan as at 31st December 2020 are shown in Table 1. The Reserves shown in Table 1 are expressed as a total in barrels of oil equivalent (boe) in Table 2. Gas volumes are converted to oil equivalent volumes using a conversion factor of 5.0 Mscf/boe (commensurate with the high calorific content of the gas).
Table 1: Summary of Reservesas at 31st December 2020
(a) Oil
Status | Gross Field(MBbl) | WI(%) | Net Entitlement(MBbl) | ||||
Proved | Proved +Probable | Proved + Probable+ Possible | Proved | Proved +Probable | Proved + Probable+ Possible | ||
Developed | 5,825 | 10,657 | 16,173 | 22.0 | 545 | 997 | 1,512 |
Undeveloped | 0 | 3,532 | 11,851 | 0 | 330 | 849 | |
Total | 5,825 | 14,189 | 28,023 | 545 | 1,328 | 2,361 | |
(b) Gas
Status | Gross Field(Bscf) | WI(%) | Net Entitlement(Bscf) | ||||
Proved | Proved +Probable | Proved + Probable+ Possible | Proved | Proved +Probable | Proved + Probable+ Possible | ||
Developed | 4.15 | 9.35 | 19.47 | 22.0 | 0.39 | 0.87 | 1.82 |
Undeveloped | 0.00 | 3.48 | 13.84 | 0.00 | 0.33 | 1.08 | |
Total | 4.15 | 12.83 | 33.31 | 0.39 | 1.20 | 2.90 | |
Notes:
1. Gross Field Reserves are 100% of the volumes estimated to be commercially recoverable from the asset under the intended development plan.
2. Net Entitlement Reserves are UOG's net economic entitlement under the PSC that governs this asset.
3. Totals may not exactly equal the sum of the individual entries due to rounding.
Table 2: Summary of Reserves as at 31st December 2020Expressed in Oil Equivalent Volumes (Mboe)
Status | Gross Field(Mboe) | WI(%) | Net Entitlement(Mboe) | ||||
Proved | Proved + Probable | Proved + Probable + Possible | Proved | Proved + Probable | Proved + Probable + Possible | ||
Developed | 6,655 | 12,527 | 20,066 | 22.0 | 623 | 1,172 | 1,876 |
Undeveloped | 0 | 4,227 | 14,618 | 0 | 396 | 1,065 | |
Total | 6,655 | 16,754 | 34,685 | 623 | 1,568 | 2,941 | |
Note:
1. The Reserves shown in this Table are the sum of the oil and gas Reserves shown separately in Table 1, gas volumes being converted to oil equivalent volumes using a conversion factor of 5.0 Mscf/boe.
2. Totals may not exactly equal the sum of the individual entries due to rounding.
A summary of changes in Gross Field Reserves (in boe) since 31st December 2019 is shown in Table 3.
Table 3: Reconciliation of Reserves as at 31st December 2020with Reserves as at 31st December 2019
Case | Gross Field Reserves(Mboe) | ||||
End 2019 | Exploration Adds | 2020 Production | Revisions | End 2020 | |
Proved | 4,179 | 0 | -3,297 | 5,773 | 6,655 |
Proved + Probable | 13,526 | 134 | -3,297 | 6,391 | 16,754 |
Proved + Probable + Possible | 28,589 | 269 | -3,297 | 9,123 | 34,685 |
Notes:
1. Revisions are due to production performance in 2020, the results of wells drilled in late 2019 and 2020, notably ASH-2 and El Salmiya-5, and the maturation of the ASH gas development from Contingent Resources to Reserves.
2. The exploration add is the AR-G reservoir at El Salmiya; in the 1P case, all potentially recoverable volumes fall beyond the economic limits given the current development plan.
3. Totals may not exactly equal the sum of the individual entries due to rounding.
A breakdown of the Gross Field Reserves to the individual field and reservoir level is shown in Table 4.
Table 4: Field and Reservoir Level Breakdown of Reservesas at 31st December 2020
Field | Reservoir | Gross Field Oil Reserves(MBbl) | Gross Field Gas Reserves(Bscf) | ||||
Proved | Proved + Probable | Proved + Probable+ Possible | Proved | Proved + Probable | Proved + Probable+ Possible | ||
Al Jahraa2 | AR-C | 2,752 | 5,736 | 9,969 | 0.00 | 0.00 | 0.00 |
AR-D | 57 | 227 | 570 | 0.00 | 0.00 | 0.00 | |
AR-G | 71 | 205 | 1,145 | 0.00 | 0.00 | 0.00 | |
L Bahariya | 65 | 389 | 1,508 | 0.54 | 2.60 | 7.64 | |
AR-E (Jah-7) | 13 | 21 | 35 | 0.00 | 0.00 | 0.00 | |
U Bahariya | 18 | 61 | 203 | 0.00 | 0.00 | 0.00 | |
L Bahariya II | 10 | 33 | 135 | 0.00 | 0.00 | 0.00 | |
Sub-Total | 2,985 | 6,673 | 13,564 | 0.54 | 2.60 | 7.64 | |
El Salmiya | AR-C | 13 | 234 | 774 | 0.00 | 0.58 | 2.16 |
AR-E | 273 | 849 | 1,751 | 0.00 | 0.00 | 0.00 | |
AR-G | 0 | 134 | 261 | 0.00 | 0.00 | 0.00 | |
Kharita | 250 | 414 | 909 | 1.40 | 2.86 | 9.94 | |
Sub-Total | 536 | 1,632 | 3,695 | 1.40 | 3.44 | 12.10 | |
ASA | AR-C | 32 | 0 | 0 | 0.00 | 0.00 | 0.00 |
AR-E | 144 | 348 | 750 | 0.00 | 0.00 | 0.00 | |
Sub-Total | 175 | 348 | 750 | 0.00 | 0.00 | 0.00 | |
ASH | AEB | 1,830 | 5,116 | 9,162 | 2.20 | 6.78 | 13.56 |
ASZ | AR-C | 298 | 421 | 852 | 0.00 | 0.00 | 0.00 |
Total | 5,825 | 14,189 | 28,023 | 4.15 | 12.83 | 33.31 | |
Notes:
1. The Reserves shown here equate to the Reserves shown in Table 1.
2. Al Jahraa volumes shown here include Al Jahraa SE.
3. No Reserves are attributed to the ZZ and Al Ahmadi fields, or to reservoirs not listed here.
4. Totals may not exactly equal the sum of the individual entries due to rounding.
Prospective Resources Summary
The Prospective Resources attributable to UOG in Abu Sennan as at 31st December 2020 are shown in Table 5. Only the potential volumes estimated to lie within the Abu Sennan licence area are reported here. GaffneyCline has not examined the economics of any of these Prospects, some of which are very small.
Prospective Resources are shown both as gross volumes and net to UOG on a Working Interest basis, i.e. UOG's Working Interest fraction of the gross volumes. These do not represent UOG's actual Net Entitlement under the terms of the PSC that governs the asset, which would be lower. Net Working Interest is quoted here since the Prospective Resources are not yet sufficiently mature to estimate the associated production profiles and costs that are needed to calculate the Net Entitlement.
Table 5: Summary of Oil Prospective Resources (Prospects)as at 31st December 2020
(a) Outside the Existing Development Areas
Prospect | Gross (MBbl) | WI(%) | Net (WI Basis) (MBbl) | Pg(%) | |||||
1U | 2U | 3U | 1U | 2U | 3U | ||||
ASX3 | AR-C | 241 | 692 | 1,438 | 22 | 53 | 152 | 316 | 29 |
AR-E | 180 | 407 | 812 | 40 | 90 | 179 | 22 | ||
AR-G | 60 | 306 | 763 | 13 | 67 | 168 | 27 | ||
ASU | AR-G | 3 | 25 | 64 | 22 | 1 | 5 | 14 | 43 |
L Bahariya | 40 | 114 | 233 | 9 | 25 | 51 | 39 | ||
ARQ | AR-C | 87 | 217 | 439 | 22 | 19 | 48 | 97 | 45 |
AR-E | 57 | 202 | 454 | 12 | 44 | 100 | 34 | ||
AR-G | 109 | 316 | 666 | 24 | 69 | 146 | 28 | ||
L Bahariya | 55 | 195 | 455 | 12 | 43 | 100 | 34 | ||
ASG-I | AR-C | 68 | 151 | 287 | 22 | 15 | 33 | 63 | 34 |
AR-E | 26 | 88 | 193 | 6 | 19 | 43 | 25 | ||
AR-G | 53 | 111 | 198 | 12 | 24 | 44 | 21 | ||
L Bahariya | 20 | 37 | 66 | 4 | 8 | 15 | 25 | ||
ASG-II | AR-C | 44 | 93 | 172 | 22 | 10 | 20 | 38 | 34 |
AR-E | 51 | 102 | 184 | 11 | 22 | 41 | 25 | ||
AR-G | 41 | 83 | 141 | 9 | 18 | 31 | 21 | ||
L Bahariya | 14 | 30 | 56 | 3 | 7 | 12 | 25 | ||
ASF | AR-G | 212 | 872 | 2,027 | 22 | 47 | 192 | 446 | 30 |
Bahariya | 124 | 561 | 1,334 | 27 | 123 | 294 | 26 | ||
AEB | 48 | 166 | 375 | 11 | 37 | 83 | 34 | ||
ASK | AR-G | 148 | 346 | 681 | 22 | 32 | 76 | 150 | 20 |
Bahariya | 80 | 236 | 654 | 18 | 52 | 144 | 16 | ||
AEB | 86 | 205 | 417 | 19 | 45 | 92 | 20 | ||
Salmiya West | AR-C | 156 | 384 | 896 | 22 | 34 | 84 | 197 | 35 |
AR-E | 102 | 246 | 481 | 22 | 54 | 106 | 35 | ||
Bahariya | 192 | 363 | 615 | 42 | 80 | 135 | 42 | ||
Kharita | 904 | 1,506 | 2,373 | 199 | 331 | 522 | 36 | ||
SW Al Ahmadi | AR-C | 1,567 | 5,030 | 13,532 | 22 | 345 | 1,107 | 2,977 | 35 |
Bahariya | 1,349 | 3,543 | 7,193 | 297 | 779 | 1,583 | 24 | ||
Continued on next page
(a) Outside the Existing Development Areas (continued)
Prospect | Gross (MBbl) | WI(%) | Net (WI Basis) (MBbl) | Pg(%) | |||||||
1U | 2U | 3U | 1U | 2U | 3U | ||||||
South Al Jahraa 1 | ARC | 55 | 163 | 442 | 22 | 12 | 36 | 97 | 54 | ||
ARE | 30 | 74 | 167 | 7 | 16 | 37 | 36 | ||||
South Al Jahraa 2 | ARC | 83 | 175 | 335 | 22 | 18 | 38 | 74 | 54 | ||
ARE | 34 | 80 | 177 | 7 | 18 | 39 | 36 | ||||
South Al Jahraa 5 | ARC | 98 | 295 | 828 | 22 | 22 | 65 | 182 | 54 | ||
ARE | 43 | 150 | 498 | 9 | 33 | 110 | 36 | ||||
South Al Jahraa 6 | ARC | 48 | 91 | 153 | 22 | 11 | 20 | 34 | 54 | ||
ARE | 40 | 86 | 168 | 9 | 19 | 37 | 36 | ||||
NE Al Jahraa 7 | ARC | 289 | 609 | 1,150 | 22 | 64 | 134 | 253 | 58 | ||
ARE | 211 | 471 | 961 | 46 | 104 | 211 | 38 | ||||
ARG I | 164 | 284 | 463 | 36 | 63 | 102 | 36 | ||||
ARG II | 122 | 270 | 528 | 27 | 59 | 116 | 36 | ||||
NE Al Jahraa 8 | ARC | 328 | 651 | 1,170 | 22 | 72 | 143 | 257 | 54 | ||
ARE | 199 | 479 | 1,068 | 44 | 105 | 235 | 36 | ||||
ASH West II5 | AEB | 211 | 456 | 994 | 22 | 46 | 100 | 219 | 30 | ||
(b) Within the Existing Development Areas
Prospect | Gross (MBbl) | WI(%) | Net (WI Basis) (MBbl) | Pg(%) | |||||||
1U | 2U | 3U | 1U | 2U | 3U | ||||||
ASA | AR-C | 84 | 220 | 765 | 22 | 18 | 48 | 168 | 40 | ||
AR-E | 100 | 337 | 1,541 | 22 | 74 | 339 | 40 | ||||
Bahariya | 8 | 28 | 101 | 2 | 6 | 22 | 35 | ||||
Kharita | 229 | 837 | 1,848 | 50 | 184 | 407 | 42 | ||||
Al Jahraa4 | U Bahariya | 33 | 145 | 703 | 22 | 7 | 32 | 155 | 40 | ||
L Bahariya | 56 | 141 | 406 | 12 | 31 | 89 | 40 | ||||
Al Ahmadi-3 | AR-C | 110 | 270 | 630 | 22 | 24 | 59 | 139 | 32 | ||
AR-G | 96 | 190 | 372 | 21 | 42 | 82 | 32 | ||||
Bahariya | 153 | 291 | 496 | 34 | 64 | 109 | 22 | ||||
Kharita4 | 775 | 1,311 | 2,092 | 170 | 288 | 460 | 40 | ||||
ASH East4 | AEB | 252 | 546 | 1,147 | 22 | 56 | 120 | 252 | 60 | ||
ASH West4 | AEB | 270 | 565 | 1,164 | 22 | 59 | 124 | 256 | 40 | ||
Continued on next page
Notes:
1. Gross Prospective Resources are 100% of the volumes estimated to be recoverable from the Prospect, in the event that a discovery is made and subsequently developed.
2. UOG Net Prospective Resources in this table are UOG's Working Interest fraction of the Gross Prospective Resources; they do not represent UOG's actual Net Entitlement under the terms of the PSC that governs the asset, which would be lower.
3. Prospect ASX extends outside the licence area; only the volumes estimated to lie within the licence area are reported here.
4. Volumes shown for Al Jahraa, Al Ahmadi-3 Kharita, and ASH East, West and West II are combined oil and gas volumes in Mboe.
5. The Pg reported here represents an indicative estimate of the probability that drilling this Prospect would result in a discovery. This does not include any assessment of the risk that a discovery, if made, may not be developed.
6. The volumes reported here are "unrisked" in the sense that no adjustment has been made for the risk that no discovery will be made or that any discovery would not be developed.
7. Identification of Prospective Resources associated with a Prospect is not indicative of any certainty that the Prospect will be drilled, or will be drilled in a timely manner.
8. Prospective Resources should not be aggregated with each other, or with Reserves or Contingent Resources, because of the different levels of risk involved.
9. 1U = Low estimate, 2U = Best estimate, 3U = High estimate.
10. AR-C = Abu Roash C member, AR-E = Abu Roash E member, AR-G = Abu Roash G member, AEB = Alam El Bueib Formation.