Sale of UOG Italia Srl for Eur2.165 million

RNS Number : 0763I

United Oil & Gas PLC

10 August 2021

 

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

10^th August 2021

United Oil & Gas PLC

("United" or the "Company") 

Sale of UOG Italia Srl for €2.165 million

United Oil & Gas Plc (AIM: "UOG"), through its subsidiary, UOG Holdings plc, is pleased to announce that, as part of the Company's ongoing optimisation of its portfolio and capital allocation strategy, it has signed a conditional sale and purchase agreement with PXOG Marshall Limited, a subsidiary of Prospex Energy PLC, for the sale of 100% of the share capital of UOG Italia Srl for a consideration of  2.165 million in cash. The effective date of the transaction is 1 January 2021.

Highlights:

· United agrees to conditionally sell Italian asset to Prospex Energy PLC for €2.165 million

· As per the terms of the deal, United will receive an immediate deposit payment of €108,235, with the remainder of the consideration payable on completion

· The sale consideration is at a modest premium to the total assets held by UOG Italia at 31 December 2020  and removes any further development expenditure associated with the Selva development

UOG Italia Srl holds a 20% non-operated interest in the Podere Gallina licence, in the Po Valley region of Italy, which contains the Selva gas development project. United acquired the interest in the licence via a farm in agreement with the operator Po Valley Energy Limited in July 2017.

Prospex Energy plc is an AIM listed European focused energy company focused on natural gas opportunities and already holds a 17% interest in the Podere Gallina licence.

The terms of the sale will see an immediate deposit payment of €108,235, with the remainder of the  2.165 million total consideration and any working capital adjustments payable on completion. The sale is conditional upon (1) receipt of approval of the Italian Authorities to the change of control of UOG Italia Srl  and (2) Prospex completing a fundraising process. The transaction is expected to complete in late 2021.  

The divestment of UOG Italia Srl., following a review of United's portfolio, and capital allocation policy,  will see United exit activities in Italy. Subject to completion, the transaction will remove development capital expenditure associated with the Selva development. The transaction proceeds, in addition to the proceeds from the UK Central North Sea divestments, will provide additional financial flexibility for the Company to drive the growth of its low-cost production business in Egypt and the Greater Mediterranean area, complemented with selected high impact exploration opportunities in the Caribbean and Latin America.

For the year ended 31 December 2020, UOG Italia Srl. reported a pre-tax loss of €36,934 and had total assets of €2,061,620.  

Brian Larkin CEO of United Oil and Gas PLC, commented:

" We are pleased to sign this sale and purchase agreement with our joint venture partner on the licence, Prospex Energy. We wish them, and all stakeholders of the Selva project, well during its development.

We believe that now is the optimal time to focus our portfolio on our low-cost production business in Egypt and high impact exploration opportunities in the Caribbean and Latin America. The  proceeds of this transaction and those of the previously announced North Sea asset divestments will  further strengthen our balance sheet to support this growth strategy."

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 ("MAR") as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018.

**ENDS**

United Oil & Gas Plc (Company)
Brian Larkin, CEO	[e-mail]
Beaumont Cornish Limited (Nominated Adviser)
Roland Cornish and Felicity Geidt	[phone]
Optiva Securities Limited
Christian Dennis	[phone]
Murray (PR Advisor)	[phone]
Joe Heron	[e-mail]
Camarco (Financial PR/IR)
Billy Clegg James Crothers	[phone] [e-mail]

Tessa Gough-Allen

Notes to Editors

United Oil & Gas is a high growth oil and gas company with a portfolio of low-risk, cash generative production, development, appraisal and exploration assets across Egypt and UK, 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 www.uogplc.com 

Prospex Energy PLC is an AIM quoted investment company focussed on high impact onshore and shallow offshore European gas and power opportunities. The Company acquires undervalued projects and then applies low-cost re-evaluation techniques to identify and de-risk prospects.  Prospex currently holds a portfolio of three projects: the Podere Gallina Permit in  Italy where first gas at the Selva field is targeted for early 2022; the El Romeral gas and power project in Spain, which includes three producing wells that supply gas to a 100% project-owned 8.1MW power plant; and the large scale Tesorillo gas project in southern Spain, which has the potential to hold gross un-risked Prospective Resources of 830 Bcf of gas (Best Estimate), with upside in excess of 2 Tcf. The Company's strategy is to rapidly scale up gas production in the short term to generate internal revenues that can then be deployed to develop the asset base and increase production further.

 

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