United Oil & Gas Plc retains UK Central North Sea projects

United Oil & Gas PLC (AIM:UOG) told investors it is to retain its UK Central North Sea projects amidst rising commodity prices and renewed activity in the nearby area.

The company, in a statement, noted that its proposed £3.2mln divestment deal with Quattro Energy reached its ‘long stop’ date of February 28 and whilst it had received regulatory approval, Quattro had not completed a necessary fundraise process at that time.

Retaining the licences, P2480 and P2519, United noted that both have low-cost commitments and presently benefit from higher oil prices, located near existing infrastructure and are located in a highly prospective area of the Central North Sea.

“We believe the backdrop of high oil process and increased investment in the North Sea means these licences offer a range of exciting opportunities for United for limited near term outlay,” said chief executive Brian Larkin.

Hibiscus Petroleum’s Marigold and Yeoman discoveries are located nearby and are seeing significant development activity, whilst the substantial Piper, MacCulloch and Claymore oil fields are also in the region.

United noted that the licences themselves host the 1976 Maria discovery, deemed to have around 6mln barrels of recoverable resources, along with the Brochel and Maol discoveries made in 1987 (and are documented to have flowed some 2,000 barrels per day in tests). They also host the Zeta exploration prospect.

The company said it now looks forward to progressing commercialisation opportunities and potential partnerships the North Sea assets offer.

Elsewhere, United noted that its planned divestment of its Italian assets is now at an advanced stage, with final paperwork submitted to the Italian authorities. And in regard to milestone payments tied to the prior disposal of the Crown discovery to Hibiscus – the licence for which terminated in September 2021 – the company said it sought legal advice in October and based on that advice it is continuing constructive discussions with Hibiscus.

Looking ahead, United boss Larkin meanwhile highlighted: “With our low-cost producing asset base, which is significantly leveraged to the rising oil price, we remain focused on implementation of our work programmes from a fully funded position in Egypt, in addition to progressing the farm out of our Jamaican assets. 

“We look forward to updating the market on further progress in our full year results at the end of April.”