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United Oil & Gas PLC
26 January 2023

United Oil & Gas PLC / Index: AIM / Epic: UOG / Sector: Oil & Gas


26 January 2023

United Oil and Gas plc

("United" or "the Company")


FY 2022 Trading and operations update and guidance for 2023


United Oil & Gas Plc (AIM: "UOG"), the full-cycle oil and gas company with a portfolio of production, development, exploration and appraisal assets, issues the following trading and operations update summarising recent operational activities, providing trading guidance in respect of the financial year to 31 December 2022, and initial guidance for 2023. This is in advance of the Company's audited full year results which will be released in April 2023. The information contained herein has not been audited and may be subject to further review and amendment.


United Chief Executive Officer, Brian Larkin commented:

"Operationally 2022 was a very active year for the Company with an extensive work programme executed in Egypt, generating good operational cashflow despite mixed drill results. Over the three years that United has held Abu Sennan, the production base has generated material cashflows for the business. As the asset matures, it is transitioning to a phase in its development where operations are focused on maintaining and extending long term production rates to generate operational cashflows for many years to come. Egypt remains an integral part of our business providing operational cashflow which supports the wider asset portfolio of the Company and our strategy to grow through M&A.


"In Jamaica, the farm-out of our high impact exploration licence with 2.4 billion barrels of unrisked mean prospective oil resource is picking up pace with a timetable for receipt of indicative offers due in Q2 2023.  We continue to build on our excellent track record of active portfolio management, adding value to our assets and monetising them in excess of our investment, as seen most recently with the sale of the Maria discovery.


"In line, with our continued focus on good capital allocation and the recognition of the value disconnect between the business valuation and the share price, United intends to seek the requisite approvals from shareholders at our 2023 AGM to allow for a limited buyback programme, should this be the best use of capital at the time.


"I am excited about the potential for the Company as the fundamentals of the business remain solid, and we remain committed to our growth ambitions with the focus on new ventures in the Greater Mediterranean and North Africa regions."


2022 Operational summary

·      Group full-year 2022 production averaged 1,312 boepd net (1,137 bopd oil and 175 boepd gas) in line with revised 2022 guidance of 1,300-1,325 boepd

·      2022 Egypt work programme completed, consisting of three development wells, two exploration wells, and eight workovers

·      Safety and the environment - zero lost time incident frequency rate and fatal accident frequency rate. No environmental spills, restricted work incidents or medical treatment incidents

·      In Jamaica, as part of the licence extension that was granted, technical studies that have provided additional positive support to the farm-out process have been completed

·      In the UK, the completion of low-cost technical studies and a contingent resources report supported the negotiation of an increased transaction value on the conditional sale of the Maria discovery

2022 Financial summary 

·      Group revenue for full year 2022 is expected to be approx.$16m(1) (FY 2021 : $19.2m)

·      The average realised oil price per barrel from Egypt achieved was approx. $96/bbl (FY 2021 : $68.9/bbl)

·      Group Cash balances as at 31 December 2022 were approx. $1.4m with Net Debt approx. $1.5m (2021 Cash balances $0.4m : Net Debt $5.5m)

·      Cash capital expenditure was approx. $7m (FY 2021 : $5.5m)

·      Receivables of $4.2m (FY 2021 : $5.1m)

(1)22% working interest net of Government Take


Corporate summary

·      Amounts due from Anasuria Hibiscus UK Ltd for Crown disposal fully satisfied in the year ($2.5m)

·      A binding Asset Purchase Agreement signed for the conditional sale of UK Central North Sea Licence P2519 containing the Maria discovery for a maximum consideration of up to £5.7m 

·      United intends to seek the requisite shareholder approvals at this year's Annual General Meeting to approve a limited share buyback programme, which will be subject to completion of the Maria sale and market conditions

·      The Company initiated a full review of its G&A expenditure in Q4 2022 and has commenced a programme to reduce these costs by up to 15% in 2023 compared to 2022

2023 Outlook; production and capital expenditure guidance

·      1H 2023 production guidance from Abu Sennan is 700-900 bopd net. Note that this range comprises 100% oil production, as with the installation of pumps at the ASH Field and expected recompletions, the lower-value gas production in 1H 2023 is expected to be negligible. The upper end of the guidance includes risked contributions from the planned workovers and a pro-rated contribution from the recently spud ASH-8 development well, which is assumed will be brought onstream in May 2023

·      The development drilling planned in the first half of the year has the potential to have a positive impact on production levels in 2H 2023, and full year guidance will be provided once the results of the ASH-8 and ASD-3 wells are available

·      2023 Egypt work programme consists of two firm wells, and eight workovers, with the potential to add additional wells to the programme later in the year:

-       1H 2023 focus will be on development drilling and optimising production from existing wells through low-cost workovers

-       Two firm development wells are planned: ASH-8, which has now commenced drilling, and ASD-3, which is looking to build on the success achieved with ASD-2 in 2022

-       The potential for additional drilling in 2023, which is likely to focus on exploration, will be finalised with JV partners once the results of the ASH-8 and ASD-3 wells are available

·      Farm-out campaign for the Walton Morant licence, Jamaica, continues to accelerate with the appointment of Energy Advisors Group ("EAG"), a Houston-based M&A advisory group, targeting US companies and investment funds. Process is ongoing with indicative offers due Q2 2023

·      Group cash capital expenditure for the full year is forecasted to be approx. $4.4m, funded from existing operations, with circa $4m to be invested in Egypt and up to $0.4m across the other assets in the portfolio

·      ESG focus on evaluating emissions baseline in Egypt with operator and contributions to social investment programmes

·      Continued evaluation of new opportunities in the Greater Mediterranean area and North Africa regions to grow the business in line with the strategy





Operations Update


Egypt, Abu Sennan licence (22% working interest)

Full year 2022 production averaged 1,312 boepd net (1,137 bopd oil and 175 boepd gas), in line with revised production guidance of 1,300-1,325 boepd.

2022 Egypt work programme

The 2022 work programme consisted of three development wells, two exploration wells and eight workovers. The drilling programme achieved mixed results, with production added from ASD-2 and ASH-4, but with disappointing results from the two exploration wells. Q4 2022 production averaged 942 boepd net (884 bopd oil and 58 boepd gas), reflecting the expected decline from the existing wells, a proportionally higher decline in the lower-value gas volumes, and the fact that a number of wells were shut in pending workovers to return production. A number of these workovers which were planned for late 2022 were delayed due to operational issues and are now expected to be completed in Q1 2023.


Development drilling

The ASD-2 development well was brought onstream in March 2022 at rates above expectations and has continued to outperform projections throughout 2022.  The AJ-14 development well found good quality reservoir in the primary Abu Roash-C target, but due to near-borehole formation damage, consistent flow was not established. This well is now awaiting an imminent workover, with commercial flow-rates in line with the pre-drill expectations of approx. 300 bopd gross expected to be established once this is completed. The ASH-4 development well encountered top Alam El Bueib reservoir in an area that appears to be at least partially separated from the previously producing wells. The well was brought onstream in November 2022, and despite a steep initial decline, production from the well has now stabilised.


Exploration drilling

Two of the larger, but higher risk, prospects in the Abu Sennan exploration portfolio were drilled in 2022.  The ASV-1X well spud in April, and although there were some encouraging signs indicating the presence of hydrocarbons, the well did not flow on test. The ASW-1X well did not encounter hydrocarbons in any of the multiple pre-drill targets and was plugged and abandoned at the beginning of 2023.


2023 work programme and 1H 2023 production guidance

The proposed 2023 Egypt work programme consists of two firm wells and eight workovers. In 1H 2023 the focus will be on development drilling and in optimising production from existing wells  through low-cost workovers. The first development well will be the 60-day ASH-8 well, which spud on 22 January and the second will be ASD-3, which is aiming to build on the success achieved with ASD-2 in 2022. In parallel to the development drilling, workovers in Q1 2023 are targeting enhanced production from multiple reservoirs across a number of wells.

In line with previous years, where there has been flexibility in the drilling programmes, we expect any additional drilling in 2023 to be finalised with partners once we have seen the results of the two development wells. This contingent activity is likely to be focused on the remaining high-graded exploration targets in Abu Sennan. There remains a portfolio of additional prospects within the Abu Sennan licence and future exploration drilling and its potential to deliver a step-change in terms of production from the licence continues to be considered carefully by the JV partners. This will include the output from ongoing seismic reprocessing.

1H 2023 production guidance is 700-900 bopd net. Unlike previous years, where production has comprised circa 15% gas, the guided range is based on 100% oil production, as with the installation of pumps at the ASH Field and expected recompletions, the lower-value gas production in 1H 2023 is expected to be negligible. The upper end of the guidance includes risked contributions from the planned workovers and assumes that the ASH-8 development well will be onstream in May 2023. The development drilling planned in the first half of the year has the potential to have a positive impact on production levels in H2, and full year guidance will be provided once the results of the ASH-8 and ASD-3 wells are available.

Jamaica, Walton Morant licence (100% working interest)

The farm-out campaign for the Walton Morant licence, Jamaica, which has over 2.4 billion barrels of unrisked mean prospective oil resource and the basin-opening Colibri prospect at a drill-ready stage is accelerating as we seek to move this potentially transformational project forward within our licence term. EAG have been engaged alongside our existing advisors, Envoi Ltd, with the aim of accessing capital from US companies and investment funds. There are a number of companies currently evaluating the opportunity and a deadline for indicative offers has been set for Q2 2023.


Financial Update


Group Revenues for  2022 are expected to be circa $16 million (FY 2021 : $19.2 million), with increased commodity prices partially offsetting reduced average production. The entire revenue for the Group is generated from our 22% interest in the Abu Sennan concession in Egypt and is stated after accounting for government entitlements under the production sharing contract.  The FY 2022 average realised oil price per barrel achieved was $96/bbl (FY 2021 : $68.9/bbl) (representing a discount to Brent of circa $4/bbl).


Cash, Net Debt and Receivables

The company entered 2022 with a cash balance of circa $0.4m and Net Debt of $5.5 million. The cash balance as at 31 December 2022 was circa $1.4 million with Net Debt reduced to circa $1.5 million. The current BP facility is expected to be fully repaid in the year.


The continued effect of global macroeconomic volatility on the Egyptian economy has resulted in both a significant devaluation of the Egyptian Pound in the year and ongoing restrictions on US Dollar transfers by the Central Bank of Egypt. These restrictions have made it challenging to repatriate cash from our Egyptian operations. In order to manage the Group's exposure to the currency devaluation risk of the Egyptian pound, in Q4 2022, United opted not to accept the payment of our USD denominated receivables in Egyptian pounds (EGP), unless required for operational purposes. Whilst this policy has resulted in an increase in the receivable balances in Q4 and a corresponding reduction in the cash balances, holding USD denominated receivables mitigate the likely realised foreign exchange losses from the devaluation of cash balances held in  EGP.

2022 has been a challenging year for the Egyptian economy however recent developments in the last quarter including the agreement of a $3 billion funding facility from the International Monetary Fund (IMF) has brought increased stability to the EGP/USD exchange rate. This stability has supported fund inflows to the country and with it increased USD liquidity since the beginning of 2023. We therefore remain confident that our EGPC receivables balance will reduce during 2023 and given the flexibility around the capital expenditure programme in Egypt we are confident we can continue to manage our working capital position to support our business operations.  

Cash Expenditure

The Group continues to engage in an active work programme across our portfolio of assets with forecast cash capital expenditure for 2023 of $4.4 million, including $4 million on the drilling and workover programme in Egypt and $0.4 million on Jamaica.


Group Overheads

The Company remains focused on reducing costs and allocating capital where it delivers the best returns. Following the announcement of the reduction in our operational footprint through the conditional sale of our interest in the Maria discovery and the forecasted reduction of production in Egypt in 2023,  United initiated a full review of its G&A expenditure in Q4 2022. The Company has commenced a programme to reduce these costs by up to 15% in 2023 compared to 2022 which includes the Board agreeing to an immediate 15% reduction in their remuneration. In addition, following the stepping down of Tom Hickey from the Board in 2022, the decision has been made to defer the appointment of a replacement until the annual board effectiveness evaluation process is completed.




Share buyback programme

The Board believes that the shares are trading at a discount to the business value and in order to deliver returns to shareholders will seek approval at the AGM to give it an option to initiate a limited buy back process, subject to completion of the Maria disposal, should the Board consider this to be the best use of capital at the time, taking into account the market conditions, operational performance and M&A activity.



Events today


Management is hosting a shareholder call at 11:00 GMT today. Investors that wish to participate in the event, please click on this link to register


Confirmation email with the details of the dialling in process will be sent to your email address.



This announcement contains inside information for the purposes of Article 7 of Regulation 2014/596/EU which is part of domestic UK law pursuant to the Market Abuse (Amendment) (EU Exit) regulations (SI 2019/310).



1H: First Half

2H: Second Half

Boepd: Barrels of oil equivalent per day

EAG: Energy Advisors Group (

Q1: First Quarter

Q4: Fourth Quarter

M&A: Mergers and acquisitions

JV- Joint Venture Partners



United Oil & Gas Plc (Company)


Brian Larkin, CEO

Sharan Dhami, Head of IR & ESG

Beaumont Cornish Limited (Nominated Adviser)

Roland Cornish | Felicity Geidt

+44 (0) 20 7628 3396


Tennyson Securities (Joint Broker)

Peter Krens

+44 (0) 20 7186 9030


Optiva Securities Limited (Joint Broker)

Christian Dennis

+44 (0) 20 3137 1902

Camarco (Financial PR)

Georgia Edmonds | Emily Hall | Sam Morris



+44 (0) 20 3757 4983 |


Notes to Editors

United Oil & Gas is a full-cycle oil and gas company with a portfolio of low-risk, cash generative production, development, appraisal and exploration assets across Egypt, UK (subject to conditional sale)  and a high impact exploration licence in Jamaica.

The business is led by an experienced management team with a strong track record of growing full cycle businesses, partnered with established industry players and 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

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