Amid financial constraints, United Oil & Gas Plc has made the decision to temporarily put a hold on discussions with potential drilling partners offshore Jamaica until the new year. CEO Brian Larkin expressed in an investor update that ongoing talks with selected parties have been suspended, with no expectations for further progress until next year. The company, listed on the AIM market of the London Stock Exchange, has been actively exploring offshore Jamaica, but operations have been scaled back this year following challenges in Egypt, which led to an exit from the country.
- Financial Situation:
- United Oil & Gas reported a net loss of US$1.6 million for the first six months of 2024, following a US$20.3 million loss in the previous financial year.
- The company is awaiting a US$620,000 receivable from the Egyptian General Petroleum Corporation to improve its liquidity.
- With US$750,000 in cash on hand from a recent public offer, the company plans to reduce its cost base to essential expenses only to maximize its chances of securing a farmout agreement within its limited funds and timeframe.
- Exploration Plans:
- United Oil & Gas holds a license to explore 22,400 square kilometers offshore along Jamaica’s southern coast.
- The company has conducted 2D and 3D tests that showed substances resembling oil, but further investigation is required to confirm.
- The most promising reservoir has been independently estimated at US$23 billion, with extraction potential over 25 years.
- A test drill is needed to determine whether the substances found are crude oil or underground water.
- Future Prospects:
- In hopes of increasing the odds of an oil discovery offshore Jamaica, the company is collecting samples for data analysis.
- The company aims to raise the estimated commercial find probability from 25% to 33% based on previous statements.
- United Oil & Gas remains optimistic about its long-term prospects, backed by its experienced management team and strategic partnerships.
While facing near-term challenges, United Oil & Gas is focusing on portfolio optimization, targeted acquisitions, and growth prospects in the United Kingdom in addition to its activities in Jamaica. The company assures investors of its confidence in the future despite the current obstacles.
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