United Oil & Gas, the full-cycle oil and gas company with a portfolio of production, development, exploration and appraisal assets today announced its audited results for the year ended 31 December 2022.

Brian Larkin, CEO, commented:
"2022 was filled with extensive corporate and operational activity across our portfolio, all completed with zero LTI's, TRIR's and environmental incidents. In Egypt it was a challenging year for United, with five wells drilled and completed in addition to a number of workovers, delivering mixed results following an exceptional 100% drilling success rate during 2020 and 2021. Abu Sennan remains integral to our portfolio and going forward activity on the licence will focus on maintaining and extending long-term production rates to generate operational cashflows for many years to come. In Jamaica, the farm-out efforts of this high impact exploration licence continued with the addition of a new advisor to support the process. In the UK post year-end, an agreement was signed for the conditional sale of the Maria discovery, which is in line with our strategy to actively manage our portfolio.

"Our work programme in Egypt in the first half has started strongly, with a focus on development drilling and workovers. We were delighted with the result of the ASH-8 well which is producing at stable rates and look forward to the results of the ASD-3 well which spud in March. For the remainder of the year, newsflow will centre around the results from our ongoing Egyptian drilling programme, the expected completion of the sale of Maria and further progress on the Jamaica farm-out. 

"We remain committed to our growth ambitions with a focus for new ventures in the Greater Mediterranean and North and West African regions, where the Board and management's experience and relationships can be leveraged.  As such, United is well placed to execute our growth strategy, with a continued focus on disciplined capital allocation to generate the best returns for shareholders."

Operational summary

• Group full-year 2022 production averaged 1,312 boepd net (1,137 bopd oil and 175 boepd gas) in line with revised 2022 guidance of 1,300-1,325 boepd
• 2022 Egypt work programme completed, consisting of three development wells, two exploration wells, and eight workovers
• Safety and the environment: Zero lost time incident frequency rate. No environmental spills, restricted work incidents or medical treatment incidents
• In Jamaica, the completion of additional technical studies that were agreed as part of the licence extension have provided additional positive support to the farm-out process
• 2023 Egypt work programme has commenced positively, with the ASH-8 development coming onstream in March ahead of schedule and above expectations (post period)
• The second well in the 2023 drilling campaign, the ASD-3 development well, spud at the beginning of April 2023 (post period)

Financial summary

• Group revenue for full year 2022 was $15.8m (1) (2021 : $19.2m)
• The average realised oil price per barrel from Egypt achieved was $96.1/bbl ( 2021 : $68.9/bbl)
• Gross Profit of $12.9m (2021 : $12.3m)
• Profit After Tax $2.3m (2021 : $3.6m)
• Cash Collections of $16.9m (2021: $17.3m)
• Group Cash balances as at 31 December 2022 were $1.4m with Net Debt of $1.5m (FY 2021: Cash balances $0.4m, Net Debt $3.9m)
• BP Acquisition facility to be fully repaid in 2023
• Capital expenditure for the year was $8.6m (FY 2021 : $6.9m)
• Egyptian receivables of $4.4m (FY 2021 : $5.1m)

(1)22% working interest net of Government Take

Corporate summary

• Appointment of Peter Dunne, as Chief Financial Officer, effective from 5 May 2022
• Amounts due from Anasuria Hibiscus UK Ltd for Crown disposal fully satisfied in the year ($2.5m)
• Completion and receipt of proceeds in relation to the sale of UOG Italia Srl to Prospex Energy for €2.2m plus €0.1m working capital adjustment
• Directors' purchases increase total directors' shareholding to 5.64% of issued share capital as at year-end
• Tom Hickey, non-executive director stepped down from the Board on 23 September 2022
• A binding Asset Purchase Agreement signed for the conditional sale of UK Central North Sea Licence P2519 containing the Maria discovery for a total consideration of up to £5.7 million (post period)
• United intends to seek the requisite shareholder approvals at this year's Annual General Meeting to approve a limited share buyback programme, which will be subject to completion of the Maria sale and market conditions (post period)
• The Company initiated a full review of its G&A expenditure in Q4 2022 and has commenced a programme to reduce these costs by up to 15% in 2023 compared to 2022 (post period)

Outlook

• Q1 2023 oil production averaged 841 bopd net, with an exit rate for the quarter of 1,275 bopd net
• The first well in the 2023 campaign, the ASH-8 development well, came onstream in March at rates above expectations and six weeks ahead of the anticipated start-up
• The ASH-8 result, coupled with the continuing development drilling in the first half of the year has the potential to have a positive impact on production levels for 2023, and actual quarterly production information will be provided in H2
• 2023 Egypt work programme consists of two firm wells, and at least eight workovers, with the potential to add additional wells and workover activity to the programme later in the year:
• ASH-8 Development well: Onstream in March 2023
• ASD-3 Development well: Commenced drilling on 1 April
• AJ14 workover: well drilled in 2022 is now onstream
• The potential for additional drilling in 2023 will be finalised with JV partners once the results of the ASD-3 well are available
• Farm-out campaign for the Walton Morant licence, Jamaica, continues to be a focus with the appointment of Energy Advisors Group ("EAG"), a Houston-based M&A advisory group, targeting US companies and investment funds. Process is ongoing with indicative offers due Q2 2023
• Group cash capital expenditure for the full year is forecasted to be approx. $5m, funded from existing operations, with circa $4.5m to be invested in Egypt and up to $0.5m across the other assets in the portfolio
• ESG focus on evaluating emissions baseline in Egypt with operator and contributions to social investment programmes
• Continued evaluation of new opportunities in the Greater Mediterranean area and North and West Africa regions to grow the business in line with the strategy