CPR for Selva Gas Field, Onshore Italy

RNS Number : 3066P

United Oil & Gas PLC

07 February 2019

 

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

7 February 2019

United Oil & Gas PLC ("United" or the "Company") 

CPR for Selva Gas Field, Onshore Italy

Highlights

·    Gross 2P reserves of 13.3BCF assigned to Selva Gas Field by CGG following reclassification of previously reported gross contingent resources ('2C')

o  Equates to 2.7BCF of net 2P reserves attributable to United

·     Represents United's first reserves and follows successful drilling and testing of Podere Maiar well ('PM-1') in January 2018

·     Selva Gas Field on course to commence production in 2020 - preliminary award of production concession received in January 2019

United Oil & Gas Plc, the London Stock Exchange listed oil and gas exploration and development company, is pleased to announce the results of an independent Competent Person's Report ('CPR') prepared by CGG Services (UK) Limited ('CGG') covering the Selva Gas Field ('the Selva Field' or 'Selva'), onshore Italy, including a reclassification of previously reported gross contingent resources ('2C') to the higher confidence and more valuable category of 2P (proven plus probable) reserves of 13.3BCF.  United holds a 20% interest in Selva which sits within the Podere Gallina Exploration Permit ('Podere Gallina' or the 'Licence'), located in the Po Valley region of Italy, a proven hydrocarbon region where over 5,000 wells have been drilled historically.

The CPR was completed by CGG following positive flow testing of the Podere Maiar-1 well ('PM-1') from two targeted reservoirs in January 2018. 

	Selva Gas Field Reserves (BCF)
	1P	2P	3P
Gross	4.1	13.3	29.6 5.9
Net to United	0.8	2.7

As well as Selva, there is additional prospectivity within the Podere Gallina Licence, including the Selva East, Selva South Flank, Fondo Pierino, Cembalina and Riccardina structures.  The partners plan to acquire 3D seismic data over these additional structures, the results of which will inform further development drilling activity at Podere Gallina. Gross prospective resources for the Selva East, Fondo Pierino and Cembalina prospects can be found in the table below:

	Gross un-risked prospective resources bcf (100% best estimates)
Prospect	Best	Chance of Success
Selva East	34.8	30%
Fondo Pierino	14.6	34%
Cembalina	3.3	51%
Selva South Flank	To be determined in Q2 2019
Riccardina	To be determined in Q2 2019

Preliminary award of the production concession was recently granted, including approval for the development plan for Podere Gallina. This plan maps out a clear roadmap for the licence which will deliver first production by 2020.  In the past few days, the Italian Ministry has also confirmed that recent government amendments to energy policy will not affect the approval processes for Selva, which continues to progress through the normal approval procedures.

United Oil & Gas PLC CEO, Brian Larkin, said: "2.7BCF of 2P reserves of gas attributable to our 20% interest in the Selva Gas Field is a key milestone for the Company.  Not only do these represent United's first reserves, they serve to demonstrate the considerable progress that has been made by the partners in de-risking the field and advancing it towards production.  With preliminary approval for the development plan received in January, we remain on course to bring Selva into production in 2020 with facilities designed to produce at a gross rate of up to 150,000 cubic metres per day.   At this rate, Selva will be generating significant cash flows for United which in turn will be reinvested into further high-impact activity across our portfolio of late stage development opportunities onshore Europe and frontier exploration offshore Jamaica.  We are encouraged by the additional prospectivity in the licence, particularly by a number of potentially larger targets immediately adjacent to the Selva Gas Field, and this was one of the key drivers behind United's original acquisition of this licence.

"Selva is the latest in a series of CPRs published by United.  The recently published UK CPR included estimates of gross unrisked 2C resources of 6.35 MMstb and 1.55 MMstb for our Crown Oil Discovery in the North Sea and our Waddock Cross Oil Field in the Wessex Basin respectively.  We will shortly publish our CPR for Jamaica, which will complete the current set of studies." 

Further Detailed Information

CGG completed the CPR for the Selva Field on the basis that the contingent resources can now be categorised as reserves, pending the provisional award of the Exploitation Licence.  The updated CPR is based on information gained from positive flow testing of the Podere Maiar-1 well ('PM-1') from two targeted reservoirs in January 2018.  The thickest level C2 (net pay 25.5m) reported a peak flow rate of 148,136 scm/day on a 3/8 inch choke and a pressure differential of 11 bar with no water production.  The higher level C1 (net pay 15.5m) also reported strong flow test results with a peak flow rate of 129,658 scm/day on a 3/8 inch choke with good pressure recovery.  There is additional prospectivity in the Licence, including the Selva East, Selva South Flank, and Riccardina structures. 

Previously gross contingent resources of 7.2BCF/18BCF/29.6BCF in the 1C/2C/3C categories have been reported for the Selva Field.  While CGG's estimate for 3P Reserves of 29.6BCF remain unchanged from the previously reported 3C Contingent Resources of 29.6BCF, in the 1P/2P estimates, CGG have considered a situation based solely on production from the PM-1 well, in which the entire structure is not drained. This has led to a difference in the numbers compared to the previously quoted 1C/2C figures. The Directors believe once PM-1 establishes a production history, a clearer picture will emerge which, given the good connectivity that was observed when the field was previously on production, could result in a higher proportion of 3P reserves being upgraded into the 1P and 2P categories.

CGG has given its consent to the reference to its CPR in this announcement. CGG confirms it has reviewed this announcement and confirms that the estimates have been correctly extracted from the CPR. The CPR has been signed by Andrew Webb who has over 30 years of relevant experience in the oil industry.

**ENDS**

For more information please visit the Company's website at www.uogplc.com or contact: 

United Oil & Gas Plc (Company)
Brian Larkin	[e-mail]
Optiva Securities Limited (Broker)
Christian Dennis	[phone]
Beaumont Cornish Limited (Financial Adviser)
Roland Cornish and Felicity Geidt	[phone]
Murray (PR Advisor)	[phone]
Joe Heron	[e-mail]
St Brides Partners (Financial PR/IR)
Frank Buhagiar and Juliet Earl	[phone]

Notes to Editors

United Oil & Gas plc (UOG) is listed on the main market of the London Stock Exchange. United was established to explore, appraise and develop low risk assets in Europe and to develop higher risk, higher impact exploration projects in the Caribbean, Latin America and Africa.

The following table outlines the Company's licence interests:

Country	Licence	Operator	United Interest	Next Stage of Development
Italy	Podere Gallina Licence	Po Valley Energy Limited	20%	CPR nearing completion Infrastructure build 2019 Production in 2020 Work continuing to high-grade other opportunities in licence
UK	Waddock Cross Field	Egdon Resources UK Limited	26.25%	Development drilling targeted in 2019
UK	PL090 Exploration	Egdon Resources UK Limited	18.95%	Technical work to de-risk exploration targets continuing
UK	P1918	Corallian Energy Limited	10%	Colter Drill Commencing January 2019
UK	PEDL 330	Corallian Energy Limited	10%	Technical work to de-risk exploration targets continuing
UK	PEDL 345	Corallian Energy Limited	10%	Technical work to de-risk exploration targets continuing
UK	P2366	United Oil & Gas Plc	95%	CPR Complete Seismic reprocessing underway ahead of likely Farm Down Process
Jamaica	Walton-Morant	Tullow Jamaica Ltd	20%	CPR nearing completion Interpretation of Seismic ongoing ahead of Farm Down Process

 

END

 

 

UPDUGUWUPUPBGRQ