United Oil & Gas plc said that new research set a value of £33.5 million on the company’s Maria discovery in the Outer Moray Firth Basin in the Central North Sea.
OPTIVA
The company published a research note by Optiva Securities Ltd, which valued the asset at £33.5m or 5.2p per share on a risked basis, or £109.1m or 14.0p per share on an unrisked basis.
The Maria discovery lies within licence P2519 and includes Blocks 15/18e and 15/19c, covering an area of c. 225 km2.
LICENCE
United was provisionally awarded a 100% interest in the licence in September 2020, with the award of the licence confirmed in January 2021 due to expire in December 2023.
By that point, the company said it expected the project to have moved into the next phase of development, by committing to a well, in order to renew the licence for a further two years.
FORECAST
United has produced forecasts and values for Maria, assuming a subsea well tieback to nearby infrastructure with development commencing in 2024 and first production commencing in 2025.
“We assume initial production levels of around 5.3 million barrels of oil equivalent per day (mboepd) in 2025, declining at a rate of 35% per annum to 3.4 mboepd in 2026 and mboepd in 2025.
“We assume production continues to decline at a rate of 35% until production ends in 2034.
“In our valuation we assume a flat oil price of US$100/bbl and an average opex of US$10.6/bbl.
“During the first year of production, we forecast Maria to generate revenue of US$193.5 million, declining to US$125.7 million in 2026 and US$81.7 million in 2027.
“Over the life of the field, we forecast the operation will generate US$545 million in revenue.”
WORK PROGRAMME
The company had proposed to sell the project to Quattro Energy Ltd, which failed to raise the necessary funds.
United has since started work leading towards a competent persons report (CPR) for the project.
The company said it expected to complete a technical work programme for Maria, including rock physics and reservoir modelling, by the end of July 2022.
This will feed into a CPR which is due for completion by the end of Q3 2022.
United then expects to assess the potential commercialisation options for the project.