United Oil rises on latest Abu Sennan drilling

United Oil updated the market on the drilling of the ASD-2 development well in the Abu Sennan licence, onshore Egypt on Tuesday, where it holds a 22% working interest in the licence operated by Kuwait Energy Egypt.

The AIM-traded firm said the well, which was drilled to test the north-western culmination of the commercial discovery in the ASD field last year, had safely reached a total depth of 3,631 metres.

It said the well had now been logged, and was interpreted to have encountered at least 25.5 metres of net oil pay across the Abu Roash and Bahariya reservoirs.

An estimated 20 metres of net pay was encountered in the Abu Roash-E reservoir, “significantly above” pre-drill expectations.

The well would be tested and completed in the coming days, and brought “immediately” onstream through the existing ASD facilities, adding additional production and revenue for United.

United said it would issue a further update once the well was brought onstream, and flow rates were established.

It explained that ASD-2 was the first well in the 2022 Abu Sennan drilling campaign, and after completion, the ECDC-6 rig would be released and the campaign would continue with the Sinotharwa-1 rig.

Technical work to finalise the drilling locations at the Al Jahraa and ASH fields was ongoing, and as a result, the ASV-1X exploration well had now been brought forward in the drilling programme as the next well to be drilled.

United estimated that the ASV-1X structure had the potential to hold more than 2.5 million barrels of gross mean recoverable resources.

The well was expected to spud in the coming weeks.

“We are really pleased with the result from the ASD-2 well, which provides a very positive start to the 2022 drilling campaign,” said chief executive officer Brian Larkin.

“Our production is highly leveraged to the current higher oil prices and oil/gas discoveries can be quickly brought on stream through existing facilities, generating immediate revenue for the company.”

Larkin said “significant potential” remained within the Abu Sennan licence, with the company looking now to the upcoming ASV-1X exploration well.

“This well is targeting a United estimate of over 2.5 million barrels gross mean recoverable resources.

“The rig has been mobilised and we look forward to the well spudding in the coming weeks.”

United said it would release its results for the full year ended 31 December on 26 April, and in advance of that, it would provide its usual quarterly production update for the first three months of 2022.

At 1305 GMT, shares in United Oil & Gas were up 4% at 2.6p.