The United Oil & Gas PLC (LON: UOG) share price rallied 10.4% after announcing that they had encountered at least 25.5m of net pay across multiple oil-bearing reservoirs while drilling the ASD-2 development well in the Abu Sennan licence, onshore Egypt.
Investors cheered the announcement that shows the well has significant crude oil reserves and could generate significant revenues for the oil and gas company. In addition, the company noted that the ASD-2 well was the eighth successful well it has drilled in Egypt.
UOG drilled the ASD-2 well up to a depth of 3,631 metres with the primary objective of testing the north-western culmination of the commercial discovery made last year in the ASD field.
United Oil & gas encountered at least 25.5 metres of net oil pay across the Abu Roash and Bahariya reservoirs. The firm also discovered an estimated 20 metres of net pay in the Abu Roash-E reservoir, which was way above pre-drill expectations.
UOG revealed that it would release the ECDC-6 rig after completing the drilling of the ASD-2 well and will then use the Sino Tharwa-1 rig for the rest of its 2022 drilling campaign.
The company is currently completing the technical work to finalise the drilling locations at the Al Jahraa and ASH fields, resulting in shortening the drilling timeline for the ASV-1X exploration.
Investors cheered the company’s assertion that it expects the ASV-1X structure to hold over 2.5 million barrels gross mean recoverable resources.
Brian Larkin, United Oil’s CEO, commented: “We are really pleased with the result from the ASD-2 well, which provides a very positive start to the 2022 drilling campaign. 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. There remains significant potential within the Abu Sennan licence, and we are looking forward to drilling 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.”
The UOG share price has risen by 10.87% in the past month but is still down 8.93% in 2022. Nevertheless, the company has positive prospects and looks pretty attractive at current prices.
*This is not investment advice. Always do your due diligence before making investment decisions.
United Oil & Gas share price.
United Oil & Gas shares rallied 10.4% to trade at 2.76p, rising from Monday’s closing price of 2.50p.
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