The United Oil & Gas PLC (LON: UOG) share price surged 27% after revealing that its ASH-8 development well (ASH-8) in the Abu Sennan licence area in onshore Egypt had started production on 16 March 2023.
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Investors cheered the news, given that starting production is a crucial milestone for any company exploring oil reserves since it marks the point at which the company can start generating revenues from its activities and profits for its shareholders.
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United Oil noted that the ASH-8 well had reached production six weeks ahead of production and was producing oil at a higher rate than expected. The well’s production has stabilised at an initial rate of c. 2,980 bopd and 2.64 mmscf/d gross (c. 656 bopd and 0.58 mmscf/d net) of natural gas.
The company’s initial production estimate was a range of 700 – 900 bopd net, which the well has more than tripled. As detailed in the pre-drill estimates, the ASH-8 development well was determined to have encountered 22 metres of net oil pay in the primary Alam El Bueib (AEB) reservoir target.
United Oil & Gas said that the ASH-8 well had now been connected to exciting facilities and produced oil and gas at the abovementioned rate. The company is still monitoring the well’s current production to assess its long-term potential.
Brian Larkin, United Oil & Gas’s CEO, commented: “We are very happy with the results from the ASH-8 well, and it is pleasing to see the well being brought on stream at a stabilised production rate of over 2,900 bopd some six weeks ahead of schedule. This is the fifth well in the highly productive ASH field, which has so far produced in excess of 4 million barrels of oil. The successful result at ASH-8 will have a positive impact on group production levels and revenue and further highlights the long-term value of the field. We look forward to drilling the next development well at ASD-3 on a location that was high-graded by the JV Partners following the success of the ASD-2 well in March 2022.”
*This is not investment advice.
United Oil & Gas (UOG) share price.
The United Oil & Gas (UOG) share price spiked 26.96% to trade at 1.46p, from Monday’s closing price of 1.15p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.