United Oil reports rise in reserves at Abu Sennan
United Oil & Gas updated the market on reserves at Abu Sennan as well as its production on Wednesday, reporting gross average production of 13,900 barrels of oil equivalent per day from the concession in the first half of June.
The AIM-traded firm said its net working interest of that was 3,060 barrels of oil equivalent per day, adding that it was a 69% increase compared to average April production.
Total production during the period had benefited from the ongoing testing of the El Salmiya-5 Well, with around 4,000 barrels of oil per day and more than 16 million square cubic feet of gas, or 7,200 barrels of oil equivalent, contribution from the El Salmiya Field per day.
Independent reserves report by Gaffney Cline frim from the end of 2019 indicated an increase in reserves and contingent resources at Abu Sennan, with the company reporting a 12.5% rise in gross 2P reserves to 13.5 million barrels of oil equivalent, with 15% of that being gas, compared to 12 million barrels of oil equivalent per day at the beginning of 2019, representing a 190% reserves replacement ratio.
Gross 1P reserves were up by 76% to 4.2 million barrels of oil equivalent per day, while gross 3P reserves rose by 46% to 28.6 million barrels of oil equivalent.
United reported a gross 2C contingent resource add of 0.73 million barrels of oil equivalent, adding that the reserves upgrade did not include the recent drilling success at the El Salmiya-5 Well.
“It is really pleasing to see the Abu Sennan assets continuing to perform so strongly and the potential that we recognised in the assets being realised. Much as we expect the production at the El Salmiya-5 well to be choked back from the current levels, it is fair to say that net production of over 3,000 barrels of oil equivalent per day at this stage has surpassed even our own high expectations for the licence,” said chief operating officer Jonathan Leather.
“We remain highly confident that the Licence has more to offer.
“Further development at the field is expected to deliver additional gas before the end of the year, further enhancing production and cashflow.”
Leather said the company also saw a “substantial exploration opportunity” on the licence, and was working towards optimising targets for further exploration drilling in due course.
“This independent review of reserves should send a clear message about the strength of the company's Egyptian assets and, together with our booked reserves at the Selva field in Italy, serves to highlight the considerable asset value behind United - a notable discrepancy when compared to our current market capitalisation.”
At 1116 BST, shares in United Oil & Gas were up 6.06% at 2.89p.