(AIM: UOG ) 1H20 results for the six months ended 30th June 2020 outlined a successful period for the Company despite a period unprecedented for the industry over the past 10 years.
Maiden group Revenue for the period of $2.4m delivered Gross Profit of $0.3m with an exceptional fair Value Gain on a Derivative Instrument of $2.8m delivering Profit after Tax of $1.8m.
The Company finished the period as at 30 June, with cash on the balance sheet of $1.2m (FY19: £$1.3m) after repayment of the BP Pre-payment facility of $0.7m, which was lower than projected due to hedge impact.
The portfolio covering Egypt, Italy, Jamaica and the UK demonstrated both a collective and individual positive period:
Shares in UOG have traded relatively flat over the past three months with the shares opening at 2.875p following 1H20 results.
Brian Larkin, Chief Executive Officer commented: "2020 has been successful for United, with integration of the Egypt assets which are delivering low cost, sustained production, material reserves growth and positive operating cash flow. Post period end we were also awarded operatorship and 100% ownership of the high impact Walton Morant exploration licence in Jamaica, we have strengthened the Board and we recently welcomed new institutional shareholders onto our register, all of which marks our arrival as a full cycle oil and gas company.”
The Company continues to focus on progressing its high-quality asset base whilst maintain tight control on costs and operating cashflow.
Given the Company is no longer dependant upon the equity capital markets for growth capital, it is therefore confident it can deliver:
The Company is guiding investors to expect 2H20 production of 2,300 boepd net to United with pricing discount improvements and reductions agreed with EGPC to potentially deliver between $600,000 to $800,000 uplift in revenues at current production levels on an annualised basis.
From the above, investors can see the portfolio provides a strong platform of earnings and positive cashflow from which to approach new frontier locations and opportunities, which if successful would drive a significant re-rating on the Company.
"Looking ahead our focus remains on managing United in a responsible way as we allocate capital prudently and efficiently to grow the business. We are well placed to manage the challenges the industry is experiencing and to take advantage of an improvement in market conditions." Added Brian.
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