United Oil & Gas tipped by Cenkos to repeat drilling success in Egypt

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United Oil & Gas PLC  (LON:UOG) shares rose 5% to 4.55p after the spudding of its latest hole in Egypt.

ASD-1X, is a vertical exploration well north-east of the producing Al Jahraa field, targeting the four-way dip-closed Prospect D structure, said house broker Cenkos.

Primary targets are the sandstone reservoirs of the Abu Roash C and E reservoirs, with a secondary target in the Abu Roash G reservoir.

The targeted reservoirs are expected to be encountered between 3,000-3,500m measured depth.

The Abu Roash C and E reservoirs are proven across the Abu Sennan licence, and the Western Desert, with the Al Jahraa-1 discovery having previously tested at a rate of 835bopd from the Abu Roash E reservoir in 2012, says Cenkos.

“Whilst the geological chance of success and the prospective resources of the Prospect D target have not been made public, we would expect that the prospect is of relatively low risk (for an exploration well) given it is a four-way dip closed structure close to existing discoveries and the historic 80% success rate on the licence.”

The broker adds that United is highly geared towards increases in the oil price, with the current forward curve increasing its 2021 year revenue and closing cash estimates to US$21.3mln and US$4.8mln, respectively.

Shares were 4.55p today and have risen over 50% since the start of February.

United owns a 22% interest in the Abu Sennan licence, which is host to a number of oil and gas fields.

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