United Oil & Gas today issued the following corporate update.

UK CNS

On 7 September 2021 United announced that it had entered into a binding sale and purchase agreement (SPA) with Quattro Energy Limited (Quattro) to sell its UK Central North Sea Licences; P2480 and P2519 for a consideration of up to £3.2m (c $4.4m). Completion of the sale was conditional on receipt of approval from the Oil and Gas Authority (OGA) and Quattro completing a fundraising process. In December 2021 United announced that the long stop date for satisfaction of the SPA conditions was extended to 28 February 2022. Although OGA approval was received, Quattro did not complete a fundraising process by this date. United has decided to terminate the SPA with Quattro.

United was awarded Licence P2480, in the OGA's 31st Licencing Round in August 2019 and Licence P2519 in the 32nd Licencing Round, in December 2020. United holds a 100% equity interest in each. Licence P2519 includes the existing Maria discovery drilled by Shell in 1976. United estimated as part of its licence application that Maria holds c. 6 MMboe mid-case recoverable resources. The P2519 Licence also contains two Jurassic discoveries, Brochel and Maol. Maol was drilled by Shell in 1987, and on test flowed at over 2,000 boepd. Licence P2480 includes the Zeta prospect. Both licences are close to existing infrastructure and are located in a highly prospective area of the Central North Sea, which includes the Marigold and Yeoman discoveries, where there is significant development activity taking place and the substantial Piper, MacCulloch and Claymore oil fields.

There are low-cost commitments on both licenses, and with rising commodity prices and renewed activity in the nearby area United believes they each contain attractive investment opportunities. United look forward to progressing the commercialisation opportunities and potential partnerships the assets offer.

Italy

United signed a conditional SPA with PXOG Marshall Limited, a subsidiary of Prospex Energy PLC (Prospex) for the sale of 100% of the share capital of UOG Italia Srl for a consideration of €2.165m (c. $2.54m) with an effective date of 1 Jan 2021. UOG Italia Srl holds a 20% non-operated interest in the Podere Gallina licence which contains the Selva gas development project in Italy.  United received a deposit of €108,235 (c.$150,000) in August 2021.   The balance of the consideration and any working capital adjustment from the effective date are payable on completion. The sale is conditional upon the receipt of approval of the Italian Authorities to the change of control of UOG Italia Srl and Prospex completing a fundraising process. On 23 February 2022, Prospex announced the completion of the fundraising with the proceeds to be used for the acquisition of United's interest in Selva and to fund the development costs of the Selva project.  The longstop date for completion is 6 April 2022. United and Prospex have been advised by their lawyers that all information required for final approvals has been submitted to the Ministry of Ecological Development on 10 February 2022.
Crown disposal milestone payment

The disposal of United's interest in the licence containing the Crown discovery to Anasuria Hibiscus UK Ltd.(Hibiscus) completed in December 2019 and United received $0.95m on completion. A further $2.85m was payable to United on completion of certain milestone events, or the licence could have been returned to United. In October 2021, Hibiscus informed United that the licence terminated on 30 September 2021. As announced in October, United sought legal advice.  Based on that advice the Company remains confident of its legal position and is continuing constructive discussions with Hibiscus. The Company looks forward to updating the market in due course.

Pre-payment facility

Further to FY 2021 Trading and Operations Update and Guidance for 2022 announcement issued on the 27 January, the Company has extended the final maturity date on its existing prepayment facility from 30 September 2022 to 31 December 2023. This extension significantly lowers the monthly repayments and provides additional flexibility for the execution of the Abu Sennan drilling programme and general working capital management.  United continues to have in place a framework for potential future offtake and financing undertaken by the Company.

United's Chief Executive Officer, Brian Larkin commented:
"Although the conditions of the SPA for the sale of our UK CNS assets were not met and United has decided to terminate the SPA with Quattro, we believe the backdrop of high oil process and increased investment in the North Sea means these licences offer a range of exciting opportunities for United for limited near term outlay.

"In respect of our other sales processes, we are pleased with the progress being made. In Italy we have submitted final paperwork to the relevant Ministry and are now waiting for final approvals. Similarly, we remain confident of a prompt outcome regarding our Crown disposal milestone payment which we hope to update shareholders on in due course.

"With our low-cost producing asset base, which is significantly leveraged to the rising oil price, we remain focused on implementation of our work programmes from a fully funded position in Egypt, in addition to progressing the farm out of our Jamaican assets.  We look forward to updating the market on further progress in our full year results at the end of April."