United Oil and Gas shares have jumped more than 5% on the back of the Irishcompany confirming a commercial gas discovery from its maiden drilling round, writes Geoff Percival.
The Dublin-based explorer said the first drill it has been involved in has returned significant gas flows. The site is located in the Selva gas field at the Podere licence in Italy.
United owns a 20% stake in the licence, which is operated by Australian explorer Po Valley Energy. United described the find as “a significant commercial discovery”.
Earlier this week the company bought into three licences in the south of England operated by privately-owned exploration company Corallian. Drilling on one of those licences is scheduled for the second quarter of this year.
Despite some of yesterday’s gains paring back in later trading, United’s share price has risen by around 17% this week on the positive newsflow.
“This result is a significant development milestone for our business. The flow test results exceeded our pre-drill expectations and we are now on the road to production,” said United’s chief executive Brian Larkin.
Po Valley reportedly intersected and identified two gas reservoirs which returned net pays of between 15.5m and 25.5m.
“Po Valley will now incorporate this well-test data into the development plan and submit it as part of the application to the Italian authorities to convert a portion of the existing ‘exploration licence’ into an ‘exploitation licence’,” he said.
United was established by former Tullow Oil executives in 2015 and floated on the London Stock Exchange last year following a reverse takeover of Senterra Energy. It has an ultimate ambition of building a presence in the UK, mainland Europe, Latin America and Africa.
It is targeting higher impact exploration projects in the latter two regions and the development of lower-risk assets in Europe and northern Africa. It has previously said it would consider offshore Irish licences in the medium term, after building elsewhere.
United recently bought into one of Tullow Oil’s prospects in Jamaica.
The company is expected to add to its European operations in the short-term.
Earlier this week, as part of its UK deal United said it and Corallian would be jointly identifying and targeting further opportunities in the same area.
The deal saw it acquire a 10% stake in three of Corallian’s onshore and offshore licences near Europe’s largest oil field the Wytch Farm field.
United Oil and Gas shares have jumped more than 5% on the back of the Irishcompany confirming a commercial gas discovery from its maiden drilling round.