United Oil & Gas plc’s revenue fell and capital expenditure rose from mixed results in a “challenging year” at its Abu Sennan interests, onshore Egypt.
FINANCES
The company holds a 22% working interest in the licence which is operated by Kuwait Energy Egypt.
Audited results for the year ended 31 December 2022 show revenue of $15.8 million (2021: $19.2m), with the average realised oil price per barrel from Egypt of $96.1 /bbl (2021: $68.9 /bbl).
Gross profit rose slightly to $12.9m (2021: $12.3m), while profit after tax fell to $2.3m (2021: $3.6m).
Cash collections were $16.9m (2021: $17.3m) and group cash balances were $1.4m (2021: $400,000).
The group more than halved net debt to $1.5m (2021: $3.9m).
Capital expenditure for 2022 increased to $8.6m (2021: $6.9m).
Egyptian receivables fell to $4.4m (2021: $5.1m).
Directors’ purchases increased total directors’ shareholding to 5.64% of issued share capital as at year-end.
United intends to seek shareholder approval at this year’s general meeting for a limited share buyback programme, subject to conditions (post period).
OPERATIONS
Group 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.
The joint venture completed the Egypt work programme comprising three development wells, two exploration wells and eight workovers.
The company reported zero lost time incident frequency rate, no environmental spills, restricted work incidents or medical treatment incidents.
For its Walton Morant in Jamaica, United completed additional technical studies for the farm-out process.
LONG TERM
Chief executive Brian Larkin added that 2022 had been filled with extensive corporate and operational activity across the company’s portfolio.
“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.
“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.”
2023 OUTLOOK
Work at Abu Sennan comprises two firm wells, and at least eight workovers, with the potential to add additional wells and workover activity later in the year.
Indicative offers are due Q2 2023 for the farm-out of the Walton Morant licence, Jamaica.
Full-year group cash capital expenditure is forecast at approximately $5m, funded from existing operations, with $4.5m for Egypt and up to $500,000 across United’s other assets.
Environment, social and governance will focus on evaluating emissions baseline in Egypt with the operator and contributions to social investment programmes.