United Oil drilling plans not hit by payment delay

Covid disruptions delayed approval of Hibiscus’ asset development plans and United now expects to receive the rest of its money in the second quarter of next year

Irish exploration company United Oil and Gas holds licences in the North Sea, but its main markets are Egypt, Italy and Jamaica.

Irish exploration company United Oil and Gas has said its planned drilling campaign in Egypt, due to start in the coming weeks, will not be hampered by a delay in receiving due payment from the sale of one of its UK assets.

United’s main markets are Egypt, Italy and Jamaica. It funded its entry into Egypt – the only place where it is currently actively producing oil – in 2019 through the sale of one of its North Sea assets, the Crown discovery, to Malaysian explorer Hibiscus Petroleum.

While it has received some of the $5m (€4.1m) payment, $3m was expected to be delivered by the end of this year. 

However, Covid disruptions have delayed approval of Hibiscus’ asset development plans and United now expects to receive the rest of its money in the second quarter of next year.

United CEO Brian Larkin said the delay is understandable under the current circumstances, but it will have no impact on the Irish company’s Egypt drilling plans which will be funded from operating cashflow.

United – which recently posted its maiden profit - is generally looking to downsize its exposure to the UK as it focuses on its main markets. 

It is still looking to sell its licences in the south of England, but the pandemic has also hindered that process. 

The company will also hold onto certain licences in the North Sea.

Next year, United is targeting production at its Italian assets and possible farm-out deals for its assets in Jamaica and the North Sea.